When Hybrid LTC Makes Sense

Who should buy or at least consider "hybrid" LTC insurance?
  • ​CASH BENEFITS:  If you need/want the ultimate flexibility and simplicity of "cash benefit" LTC insurance claim payments.​
  • ​​INSURABILITY ISSUES:  If you have complicated medical/health conditions or history, especially if you have been told you would not qualify for "traditional" LTC insurance.  Many hybrid policies have reduced or "simplified" underwriting that may make it easier to qualify for vs. a traditional policy.
    • ​Always work with a LTC specialist who represents multiple companies and types of LTC policies, and who will complete a robust pre-underwriting screening before you apply for ANY coverage.  Once you apply and get declined your odds of getting any coverage drop dramatically.  Work with a LTC specialist who can help you get it right from start.
  • "PAID-UP" COVERAGE:  To create a "one-and-done", "pay-it-and-forget-it", single-premium funding strategy.  There are also options from 5-pay to 20-pay premium payment periods depending on age of purchase.
    • (Note that there is a Traditional LTC insurance plan available with a guaranteed single-premium, and two T-LTCI options with premiums guaranteed to be paid-up after 10 years.)​
  • GUARANTEED PREMIUMS:  This could be with a single-premium, 10-pay, or life-pay premiums.
    • ​(A hybrid's premium guarantee comes with significantly higher premiums than equal-benefit "Traditional" LTCI.)
  • CASH VALUE TO EXCHANGE:  If you have cash value in older life insurance policies to re-position - with a "tax-free exchange" - into a new life plus LTC insurance hybrid plan.
  • ANNUITY RE-PURPOSE:  Thanks to the Pension Protection Act, older annuities with large, taxable gains can be re-purposed into tax-free LTC benefits!
    • Re-position your annuity's cash value - with a "1035 tax-free exchange" - into a new LTC annuity hybrid that can pay out all of the annuity proceeds - including any interest/investment "gain" - tax-free when used for qualified long-term care expenses.​
    • Annuity-based LTC hybrid policies are the easiest to qualify for medically.
  • PARTIALLY SELF-INSURE:  When a longer self-insured "waiting period" (e.g., 3-years) and an unlimited/lifetime benefit as a financial "stop-loss" is desired.
    • ​(Note that there IS an unlimited/lifetime benefit period available on a Traditional LTCI plan too.)​

If you think hybrid LTC insurance may be right for you, or you want to discuss all your options with a truly independent LTC specialist we're here ready to help you plan!

Bonus Article:

Updated 3/6/2024