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Life Insurance With Long-Term Care

David Chang, ChFC®, CLU®
By: David Chang, ChFC®, CLU®

Our Insurance Expert

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Life insurance with long-term care can be an essential tool for those looking for comprehensive financial coverage to protect their assets. It covers long-term care (LTC) needs as well as life insurance death benefit coverage.

What long-term care options are available under life insurance policies?

There are a variety of long-term care options available under life insurance policies. The type of long-term care option offered by your life insurance policy will depend on your preferences. Life insurance policies that include long-term care options are permanent life insurance policies. They are not typically added to term life policies.

Long-term care rider

A LTC rider helps you pay for your long-term care expenses. You can access your life insurance death benefit to pay for care if you are incapable of performing Activities of Daily Living (ADL), such as bathing or dressing. It can also pay for costs associated with an assisted living facility or nursing home.

Linked benefit

A linked benefit life insurance policy provides two distinct benefits in one policy. Also known as a hybrid or asset-based policy, this type of policy combines life insurance and a long-term care policy. It provides a pool of money to pay for long-term care but if you don't use any or all of it, your heirs receive the rest as a life insurance death benefit.

The advantage is the leverage that a linked benefit policy provides. These policies are funded with a single lump sum or premiums paid over a set period of time. The premium you paid offers long-term care coverage that is four to five times the premium amount. For example, a $100,000 premium could result in a $500,000 policy that can be used for long-term care.

Chronic illness or critical illness rider

A chronic or critical illness rider is a feature of a life insurance policy that provides additional coverage in the event of a serious medical condition. This rider offers accelerated death benefits, which allow policyholders to access a portion of their death benefit early if they are diagnosed with a chronic illness. A critical illness is typically a specified illness, such as a heart attack or stroke. A chronic illness is defined as coming with the inability to perform a certain number of daily living activities.

What is a combination life insurance policy?

A combination life insurance policy, also known as a hybrid life insurance policy, provides coverage for both life insurance and long-term care needs. These policies include features such as accelerated death benefits, critical illness coverage, and living benefits that can be used to help pay for long-term care expenses.

Benefits of combo or hybrid life insurance policies

Hybrid life insurance policies come with a variety of perks, including:

Benefit flexibility

One of the biggest advantages of hybrid life insurance policies is the flexibility they offer. For a traditional long-term care policy, the premiums are "use it or lose it." You may be paying for care that you never use and unfortunately, you don't get that money back. Hybrid life insurance policies offer flexibility in how the death benefit can be used.

You have peace of mind knowing that your policy will cover costs associated with long-term care, provide the death benefit coverage of traditional life insurance policies, or a combination of both. In addition, some policies offer cash indemnity benefits. This means you can use the policy to pay non-licensed informal caregivers, such as family members.


Hybrid policies leverage your cash, providing more LTC benefits than the money you put in. The premium you paid typically offers long-term care coverage that is four to five times the amount you paid in. For example, a $100,000 premium could result in a $500,000 policy that can be used for long-term care. This type of policy is ideal for people who have cash sitting in a conservative emergency fund account earmarked for LTC care needs.

Underwriting requirements

Hybrid types of policies typically have less strict medical underwriting requirements. It may be easier to qualify for this type of LTC policy than a traditional long-term care policy.

Drawbacks of combo or hybrid life insurance policies

Perks aside, hybrid life insurance policies may not be for everyone. Some notable drawbacks include:


Hybrid life insurance policies are more expensive than standalone long-term care policies. They typically require a large upfront sum or limited annual payments. This could make it difficult for many people to purchase a hybrid policy.

No inflation protection

A hybrid policy offers leverage for benefits, but the LTC benefit amount does not adjust with inflation. Over time as care costs increase, this could reduce the benefit significantly. $100,000 in LTC coverage for seniors that won't need care until 20 years from now may only end up covering several months of care. Some traditional LTC policies offer an inflation rider that increases your benefit every year.

Benefit reduction

Because using LTC benefits reduce your death benefit amount, beneficiaries may not get any life insurance benefits. If you want your heirs to get a guaranteed amount of life insurance, then a hybrid policy may not be for you.

Should you buy a combination life insurance policy?

If you're looking for the best life insurance options for seniors, a hybrid life insurance policy may be worth considering. These policies provide coverage for both life and long-term care expenses, so you can get all of your bases covered in one convenient package. These types of policies offer several advantages, such as protection against the high cost of long-term care, a long-term care policy that offers the most flexibility, and has less strict underwriting requirements. If this sounds good, then a hybrid policy may be right for you. A hybrid policy is also good for people who don't want to lose their premiums,

However, there are also some potential disadvantages to consider, such as the high premium cost and possible reduction in benefits. If you want a guaranteed death benefit amount, then a hybrid policy may not be for you. If you have limited financial resources or prefer a simpler approach, then it may be better to stick with separate policies for life and long-term care needs. Ultimately, it comes down to choosing the best fit for your individual situation. So whether you decide to go with a combo or hybrid policy or stick with separate ones, just make sure that you carefully assess your options and choose the best plan and the best life insurance company for you.


  • Long-term care riders typically provide a set daily or monthly benefit for a specified period of time, while built-in hybrid benefits often cover a percentage of the policy's death benefit. A hybrid life insurance policy is a type of policy that combines features of both life insurance and long-term care insurance.

  • A life insurance policy provides a death benefit payout to your beneficiaries after you die. A long-term care insurance policy provides money to help pay for long-term care services such as in-home care, assisted living, or nursing home facilities.

  • Most life insurance policies offer some form of long-term care coverage, either as an add-on rider or as a built-in hybrid benefit.

  • Adding a LTC rider to your life insurance policy will increase your insurance premium. If you use your long-term care benefits, then your life insurance death benefit may be reduced.

  • A long-term care rider is an add-on to a life insurance policy that provides coverage for a range of long-term care expenses. In addition to providing a death benefit in the event of someone's death, the rider will help cover expenses that may arise as a result of long-term care needs.

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