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.
    • ​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 15-pay 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.​
  • 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 6/9/2020