Life insurance with long-term care coverage

Traditional long-term care insurance (LTCI) can be a good option to help cover the expenses associated with long-term care (LTC), should you need it. However, if it falls outside of your budget, you are unable to qualify or it's not a good fit for another reason, an option to consider is hybrid life insurance with long-term care coverage. Discover more about how it works and consider if it may be a good solution for you.

How does life insurance with long-term care coverage work?

A "hybrid" life insurance policy is designed to provide coverage for long-term care expenses, should the need arise, alongside traditional life coverage. It's possible to purchase a long-term care rider on certain permanent life insurance policies. This rider converts the policy into a "hybrid" policy, which pays for qualifying long-term care expenses if an event occurs that qualifies you for long-term care. This amount is deducted from the death benefit, the remainder of which is distributed to your beneficiaries upon your death. If you never need long-term care, then the death benefit in its entirety will go to your life insurance beneficiaries.

The benefit from a hybrid policy can help pay for long-term care support such as in-home nursing care, assisted living or nursing home fees and other expenses specified in your policy. To access the long-term care benefit, a doctor must certify that you need assistance with daily care activities. With that information, you can submit a claim to your insurance company and then you will begin receiving a monthly benefit to help pay for these expenses.

Types of life insurance with long-term care coverage

There are a few different types of life insurance that can assist with long-term care expenses. Here are a few of the most common:

Life insurance with a long-term care rider — You may purchase a long-term care rider with a new permanent life insurance policy or add it to an existing policy. This rider will increase the premium on the policy but will essentially allow you to access the death benefit to pay for qualifying long-term care expenses. This can help cover the cost of long-term care should you need it, but it also reduces the amount of the death benefit your beneficiaries will receive upon your death. This type of policy may also provide a limited benefit for LTC, as it is designed primarily as a life insurance policy with some protection for long-term care.

Linked benefit life insurance — Also commonly known as a "hybrid life insurance policy," a linked benefit life insurance policy combines the value of a life policy and a long-term care policy in a single plan. While this type of policy generally costs more than a long-term care rider on a traditional policy, it often offers more extensive LTC benefits and other features like return of premium if care is not needed.

Variable universal life with long-term care rider — Variable universal life is a type of permanent life insurance policy that allows the cash value in your account to grow based on the performance of the underlying investments selected by the policyholder. Similar to other permanent life insurance policies, variable universal life with an LTC rider is designed to provide protection by allowing you to access a portion of the cash in your account for qualifying long-term care expenses. However, the potential for growth is typically greater with a variable universal life policy than with whole or indexed life policies. This leaves the potential to deliver a more robust death benefit to your beneficiaries upon your death.

What is hybrid life insurance?

Hybrid life insurance policies deliver the benefits of life insurance with long-term care coverage in a single policy. They differ from owning two stand-alone policies – a life insurance and a traditional long-term care policy – in that the cash value in the account serves the dual purpose of paying funds for long-term care if needed and/or providing a death benefit to your beneficiaries in case of your death.

A stand-alone life insurance policy without an LTC rider does not offer such a benefit. Traditional long-term policies are designed to provide coverage in case long-term care assistance is needed. If the policyholder never requires care, then the premiums paid for the policy are forfeited.

For example, consider Tom, who has a variable universal life policy with a long-term care rider. He purchased the policy when he was 40 years old and at 66, he falls from a ladder while cleaning the windows at his home and breaks his leg. Tom lives alone and now needs assistance with bathing and dressing. His doctor certifies his condition, and he files a claim against his life insurance policy, which issues $175 per diem to help him pay for an in-home aide to come to his house and assist him. This gives his children peace of mind and allows Tom to receive the care he needs until he recovers. Tom rests easy knowing his children will receive a death benefit upon his death.

Hybrid life insurance vs. long-term care insurance

While traditional long-term care insurance provides coverage exclusively for LTC needs, hybrid life insurance is designed to protect you by giving you access to funds collected in the death benefit in case you require long-term care. With traditional policies, you pay premiums to maintain the policy. If you experience a medical event that triggers the need for long-term care, the LTCI pays you a benefit to help pay for those long-term care expenses. Generally, LTCI pays the most extensive benefits for the broadest array of LTC services. However, if you never require long-term care, then your premiums are forfeited. Hybrid life insurance policies provide a death benefit to your beneficiaries.

How much does hybrid life insurance cost?

The different structures and features of hybrid policies make it difficult to provide an "average" cost. However, the American Association for Long-Term Care Insurance offers a benchmark in their annual Price Index Survey. According to the 2025 survey, the average annual premium for a LTCI policy with $165,000 benefit with benefits growing at 3% a year, is $2,200 for a single male, age 55 and $3,750 for a single female, age 55.¹ In comparison, a hybrid life insurance policy with a pool of LTC benefits of $180,00 and a minimum death benefit of $120,000 is $3,540 annually for a man age 55.²

While this data provides a ballpark metric to consider as you think about LTC coverage, it is not a definitive number to plug into your budget. There are a number of factors that contribute to the pricing of a hybrid life insurance policy, including your age, gender, health history, lifestyle, smoking status and type of policy.

Pros and cons of hybrid life insurance

There's a lot to think about when considering if a hybrid life insurance policy is right for you. Here are some of the pros and cons of this type of long-term care coverage.

Pros of hybrid life insurance

• Dual coverage — With the simple addition of an LTC rider to your permanent life insurance policy, you simultaneously gain protection in case of your death and unanticipated care needs. A hybrid policy simplifies management with a single premium payment and one policy.
• Predictable premiums — Unlike LTCI policies, hybrid policies set a premium based on evaluation of your application and health information and that premium remains the same, making the cost predictable from year to year.
• Premium recovery — Traditional LTCI policies are "use it or lose it," meaning that if no qualifying event occurs triggering the need for long-term care, then the benefits aren't paid and at the end of the policy term, premiums are lost. With a hybrid policy, if you never require long-term care, your beneficiaries still receive a death benefit, resulting in some return on the premiums you paid over time.

Cons of hybrid life insurance

• Higher premiums — Adding the LTC rider to your life insurance policy will raise the premiums, making your access to life insurance more costly.
• Limited benefits — Typically, hybrid life insurance policies provide less LTC benefit coverage than traditional long-term care policies. Traditional LTC policies typically provide the most extensive coverage, with higher daily limits and inclusion of a greater array of services.
• Reduced death benefit after LTC use — If a qualifying event does occur and you receive long-term care benefits from your hybrid policy, then your death benefit will be reduced. As a result, if you require care for an extensive period of time or need premium care such as a 24x7x365 memory loss facility, the funds from your life policy could be completely depleted by the end of your life, leaving your beneficiaries with little or no death benefit.
• Elimination period — Many policies come with an elimination period. Once you are certified as needing long-term care, the elimination period is the amount of time you are responsible for paying long-term care expenses before the policy benefit kicks in. The elimination period can range from 30 to 365 days, depending on the policy. This means that you'll be responsible for paying for care out of pocket for some period of time.

Who might consider life insurance with LTC coverage?

An estimated 70% of senior adults who survive after age 65 will develop disabilities that require them to have long-term services and support.³ These statistics suggest that if you live long enough, you will need long-term care at some point in your life, so considering how you would access this kind of care should be a consideration as you think about your future. Yet choosing which type of coverage is best for you can be a challenge.

A traditional LTCI policy may be a good idea if:

• You have a family medical history of degenerative physical or mental disease such as Alzheimer's, dementia, Parkinsons or Multiple Sclerosis that would require extensive long-term care and/or a move to a facility with 24x7 nursing support.
• You're single and/or live far from family members, which would necessitate the engagement of a professional for your care.
• You're a single parent who would need care assistance if something were to happen while raising your young child/ren.
• You're concerned with leaving a defined death benefit to your children for estate management purposes and don't want to risk having that amount reduced.

A hybrid life insurance policy may be a good idea if:

• You don't have the budget available to fund a separate LTCI policy but would like some level of coverage.
• You're reaching retirement age and are beginning to experience some health concerns. It may be easier to secure a long-term care rider on a life insurance policy than a traditional LTCI policy due to riders typically involving less rigorous underwriting requirements.
• You want steady premiums that won't fluctuate over time.
• You have plans to live in an independent senior living facility that offers graduated care as needed. Your housing budget for this facility is in place, but you would like some financial support in case additional assistance is required.

As you evaluate the alternatives, speak with a qualified financial professional to help you assess which option may be best for your particular situation.

Frequently asked questions about hybrid life insurance

Here are some frequently asked questions about hybrid life insurance to help you understand more about this offering.

How does hybrid life insurance differ from traditional life insurance?

Hybrid life insurance is available for an additional premium and provides the flexibility to access a portion of the cash value of your life insurance for the purposes of long-term care should you need it. The amount used for care is deducted from the death benefit paid to your beneficiaries upon your death.

Can I use my hybrid life insurance policy benefits while I'm alive?

Yes, if you are certified by a doctor as requiring assistance with daily tasks, your hybrid life insurance policy, after the elimination period specified in the contract, will begin to pay you a benefit to help cover long-term care expenses. The cash value amount that is unused will be paid to your beneficiaries upon your death.

What happens if I never need long-term care?

With a hybrid policy, if you never require LTC, the full death benefit specified in your life insurance policy will be paid to your beneficiaries.

Is hybrid life insurance worth it for retirees?

There is no simple answer to this question, as there are many variables that go into determining which type of coverage might be right for you. However, adding an LTC rider to an existing life insurance policy when you are a retiree may provide you with the flexibility to access funding for long-term care without placing a burden on your loved ones. Because the medical underwriting process is less rigorous to obtain an LTC rider, and the cost of adding a rider is less than the premiums on a traditional LTCI policy, it may be a good option to consider. Consult with a qualified financial professional to discuss your options.

Are hybrid life insurance long-term care policies regulated?

Hybrid life insurance policies are subject to regulation by state insurance departments, which are tasked with ensuring fair pricing, fair access to LTC benefits, proper policy disclosures and protection for the consumer.

Can HSA payments be made into hybrid life insurance?

While you can't use health savings account (HSA) payments for standard life insurance premiums, you may be able to use HSA funds to pay for the LTC rider portion of the premium. Check with your provider for details, as the policy must be structured as a "tax-qualified" contract with identifiable LTC costs.

Sources:

1. American Association for Long-Term Care Insurance, Annual Price Index Survey, January 2025.
2. American Association for Long-Term Care Insurance, Annual Price Index Survey, January 2025.
3. U.S. Department of Health and Human Services, "What Is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports?" April 3, 2019.

WEB.7235813.12.25