Long-term care insurance is an insurance policy that provides financial benefits in the event you need extended care in the future. This care usually becomes required when you need assistance with activities of daily living, such as bathing, dressing, eating, and more. This care can be received at home, in assisted living facilities, nursing homes, or adult day care centers. Because long-term care insurance is medically underwritten, it’s important to purchase a policy while you’re in good health and within an acceptable age range.

Did you know over 50% of Americans will require long-term care at some point in their lives?

The amount of coverage you purchase is dependent on your wishes and budget tolerance. In general, your policy will have a set monthly benefit and a set benefit period. The higher the monthly benefit and benefit period, the higher the cost of the policy.

There are two main categories of long-term care insurance: Traditional and hybrid.

Traditional Long-Term Care Insurance

Traditional long-term care insurance works much like auto or homeowners’ insurance. You pay recurring premiums for as long as the policy is in effect. Then, should you require extended care, you can claim your benefits. These policies are usually more affordable for most buyers and also offer tax incentives on the premiums.

With most traditional policies, if you end up not needing care, you won’t get the money back that you put into the policy. That said, given how likely it is that you’ll need care, these policies offer valuable peace of mind. In many cases, they can even be used to cover expenses like home modifications that make it easier to age in place.

Learn More About Traditional LTCI >

Hybrid Long-Term Care Insurance

Hybrid policies, often referred to as asset-based or linked benefit policies, combine long-term care coverage with life insurance or an annuity. This type of policy provides a dual benefit: financial coverage in the event extended care is needed, and a death benefit to your intended heirs should you never experience a long-term care event.

Hybrid policies are often funded with a single premium, making them the perfect solution for those with existing life insurance or annuity contracts that could be repurposed toward a policy with long-term care benefits. Plus, hybrid policies do not involve any rate increase. This, combined with the death benefit for your loved ones, make them a reliable and predictable solution for those seeking long-term care coverage.

Learn More About Hybrid LTCI >

Deciding between traditional and hybrid long-term care insurance depends on your personal goals, financial situation, and comfort with risk. Speak with an LTC Advocate to learn more about whether long-term care insurance is right for you.