Hybrid Long-Term Coverage

What You Need to Know about Hybrid Long-Term Care Insurance

Nurse assisting her senior patient while walking. Find hybrid long term care insurance.

In 1946 the first baby boomers were born. Life expectancy was 65 and 70 for boys and girls born that year. Today life expectancy is 80 with lots of folks living well past that age. Retirement plans have to last longer. And one of the big questions is how to pay for long-term care. A hybrid long-term care policy is one way to do it.

Contact an independent insurance agent. Learn how to protect yourself and your retirement plan from the cost of long-term care. 

What Is Hybrid Long-Term Care Insurance?

Hybrid long-term care (LTC) insurance pays for help with basic activities like eating, bathing and dressing. This insurance covers expenses that health insurance, Medicare and Medicaid don’t pay for.

Hybrid long-term care policies are life insurance policies with long-term care benefits. They have death benefits and cash values.

Daily Benefit Cash benefit per day. Usually paid monthly.
Benefit Period How long benefits are paid. Usually 2 yrs., 5 yrs. or lifetime.
Waiting Period When benefits begin after eligibility. Usually 30, 60, 90 or 180 days.
Activities of Daily Living Used to determine eligibility for claims. Eating, dressing, bathing, toileting, transferring, and continence.
Cognitive Disorders Diseases that affect memory, learning, perception and problem-solving. Dementia and Alzheimer's are cognitive disorders.
Indemnity Long-Term Care Policy Benefit is not limited to the actual cost of care.
Reimbursement Long-Term Care Policy Benefit is limited to the actual cost of care.
Non-Forfeiture Option Value of policy if cancelled.
Guaranteed Renewable Insurance company cannot cancel the coverage if the premium is paid. They can raise the premium under certain conditions.
Skilled Care Skilled care is nursing and therapy care provided by medical professionals.
Custodial Care Non-medical care assisting with activities of daily living.

What Does Hybrid Long-Term Care Insurance Cover?

Hybrid long-term care insurance covers services provided by:

  • Licensed home makers
  • Licensed home health care aides
  • Adult day care centers
  • Assisted living facilities
  • Nursing nomes

Hybrid long-term care insurance may also cover:

  • Care given by family members
long-term care

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How Does Hybrid Long-Term Care Insurance Work?

Hybrid long-term care insurance is life insurance that has long-term care benefits.

The long-term care benefit is linked to the death benefit. Whatever you use for long-term care is subtracted from the death benefit when you die. You can pay for the insurance each year or in a lump sum.

Hybrid long-term care insurance is usually purchased through an insurance agent or broker. You select the amount of life insurance and long-term care benefits. 

The insurance company will ask you for some medical and lifestyle information. You may have to get a medical exam. If you have certain health conditions, hybrid long-term care insurance may be more expensive or unavailable.

The insurance company will pay a benefit if you can’t do two of the six activities of daily living by yourself, or are diagnosed with a cognitive disorder.

You will need to provide a doctor’s report and a plan of care. 

Hybrid Long-Term Care Pros And Cons

The big advantage of hybrid policies is that you are buying a group of benefits that you or your heirs can use. In addition to long-term care, there are:

  • Death benefits 
  • Cash values

Some hybrid policies offer indemnity-style benefits. There is no need to submit bills to the insurance company.

The disadvantages are that hybrid policies aren’t tax deductible. They don’t qualify for Medicaid partnership programs. Hybrid policies are more expensive because of the extra benefits they provide.

Traditional Hybrid
Benefits Long-term care only Long-term care, death benefit for heirs, cash values
Premiums Tax Deductible Yes No
Tax-Free Benefits Yes Yes
Partnership Plans Available Yes No
Refund for unused benefits May be available at an extra cost Yes
Can premiums increase? Yes On some policies

All long-term care benefits are tax-free up to $370 per day or the actual cost of care.

How Much Does Hybrid Long-Term Care Insurance Cost?

Hybrid long-term care insurance may make sense if you need the other benefits. The cost depends on your age, sex, the state where you live, your health conditions, and benefits. Here a couple of examples.

Sample Hybrid Long-Term Care Cost 

$3,000 Per Month  |  2-Year Benefit  |  90-Day Wait

Male Female
Premium $2,735 $2,586
Years Paid 15 15
Death Benefit $72,000 $72,000
Policy Value - Age 65          $32,820          $31,032          
long-term care

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Why Go It Alone?

Long-term care insurance is an important part of smart retirement planning. There is a lot to know about the coverage. Contact your local independent insurance agent. They can simplify the process for you. 

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