Hybrid Long Term Care Insurance Defined

For people who are concerned about their future long-term care needs but not convinced that traditional policies are the solution for them, there’s a newer kind of insurance option that is growing in popularity. They’re alternatively called “hybrid products” and they typically incorporate long-term care benefits with a life insurance policy or an annuity.

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Hybrid Long-Term Care Insurance Policy Have Following Benefits:

    • Eating – Feeding Oneself
    • Bathing – Bathing Oneself
    • Getting dressed – Dressing Oneself
    • Toileting – Using a toilet and perform associated personal hygiene
    • Transferring 
    • Continence – Control of one’s bladder and/or bowel
  • Traditional Long-term care policies are typically designed on a “per day” or “per month” benefit with lifetime maximums. Any money not used during a claim period is typically rolled over to another benefit period until the lifetime maximum of the policy is used. 

How can We Purchase Hybrid Long-Term care Insurance?

Hybrid long-term care insurance can be purchased using the cash values of existing life insurance or annuity contracts without incurring a taxable event.

Life insurance may be a very high priority for your family right now. But over time, your need for life insurance will likely diminish and the need to pay for long-term care may become a higher priority. These policies allow you to serve both needs with one policy.

In short, you’d buy a life insurance policy or an annuity, but the policy would include long-term care coverage as a secondary benefit. If a need arises, you can access the policy’s long-term care benefits to pay for long-term care services. If you never need long-term care, there is a death benefit for your heirs and/or an annuity from which you could take regular payments.

Advantages of Hybrid Long-Term Care Policies

    • Can be issued to “uninsurable” individuals (annuities)
    • They have death benefits if the insured never requires long-term care services
    • Can be purchased using other appreciated life insurance and annuity contracts without incurring taxable events

Disadvantages of Hybrid Long-Term Care Policies

    • Premiums are not tax deductible
    • Lower initial benefit when compared to traditional long-term care
    • More expensive per-dollar of benefit that traditional long-term care
    • Not eligible for State “Partnership” Plans

Learn More About Hybrid LTC Plan