Life Insurance With Long Term Care Benefits

Thang Truong
Thang Truong
Updated on:

With better health care these days people are expecting to live much longer, but that doesn’t mean they will be able to remain independent in their final years. More and more seniors require assistance with the activities of daily living (ADL) as they age which can be expensive. If you want to protect your assets and pay for the assistance you need for a good quality of life, you might need to look into a life insurance policy with long-term care rider.

What is a Long-Term Care Rider on a Life Insurance Policy?

A long-term care rider is usually attached to a life insurance policy. It kicks in when the policyholder is unable to care for themselves and needs to pay for long-term care. Before the insurance company pays out, the policyholder must be found unable to perform two of the six basic ADLs. These include:

  • Bathing
  • Getting Dressed
  • Using the Toilet
  • Controlling the Bowels or Bladder
  • Walking or Moving From One Place to Another
  • Eating

The rider is optional or you may look for an insurance plan that advertises it. The monies to pay for long-term care are usually drawn from the death benefit. This does reduce your death benefit, but it can be extremely helpful in times of need.

What Does a Long-Term Care Rider Cover?

The long-term care rider can be used towards hiring a home health aide, private nurse, a nursing home, assisted living, and other care assistance. It is purely meant for assistance with daily living. You can’t use it on medical care, doctors visits, prescriptions, or surgeries.

Pros and Cons of Adding a Long-Term Care Rider to Your Life Insurance Policy

A long-term care rider can give a little extra peace of mind that you’ll have extra financial assistance in case of temporary or permanent disability. As with any insurance, there are pros and cons to consider before adding this rider onto your policy.


  • The additional rider is usually more affordable than purchasing separate long-term care insurance. A long-term care rider will add about $80 to the annual premium versus a couple hundreds of dollars a year premium for long-term care insurance.
  • Long-term care riders can help you avoid financial challenges from having to take out loans or second mortgages to pay for in-home care.
  • The rider can also ease stress on yourself, potentially improving your health, and reduce stress on your family who would serve as your primary caregivers.
  • You don’t pay taxes on the life insurance you draw to use for qualifying long-term care expenses.
  • A life insurance plan with long-term care also provides a death benefit for your beneficiaries.


  • Limited to paying for long-term care assistance; can’t use it for medical care or prescriptions.
  • Long-term care expenses are deducted from your death benefit. This can reduce the payout a great deal if you live a long time in care.
  • The policy is limited in how much it can pay by your death benefit. A stand-alone policy may provide greater coverage.
  • You can usually add long-term care rider to permanent life insurance policies only such as whole life, indexed universal, variable universal, or guaranteed universal life insurance. If you are only interested in having term life insurance policy, you should consider buying long-term care insurance separately.

What to Know About Buying a Life Insurance Policy with a Long-Term Care Rider?

Long-term care policy riders are a good option for anyone who is concerned about needing assistance as they grow older, or in case of chronic illness. However, these policies are not the only option for those who are looking for long-term care or end-of-life assistance. A few other options you may want to look into include:

Accelerated Death Benefit Riders

An accelerated death benefit rider is designed to pay out part of the death benefit, usually 50%, to the policyholder if they are diagnosed with a terminal illness to pay for daily and home care.

Standalone Long-Term Care Insurance

Standalone long-term care insurance provides coverage for policyholders in case they need long-term care as they near the end of life or are injured. These policies are expensive and can cost about two thousand dollars per year for an older married couple. Similar to life insurance policies, the younger you are when you buy long term care insurance, the cheaper it is.

A Long-Term Care Annuity

Similar to life insurance, the long-term care annuity is a deferred annuity with a long-term care rider attached. The annuity may be a good option for those who are living with pre-existing medical conditions as annuities may be easier to obtain.

Insurance Companies Offering a Long-Term Care Rider with Life Insurance Policy

Long-term care riders are usually available with permanent life insurance, such as whole life or universal life. If you are searching for life insurance with a long-term care rider, here are a few insurance providers to check out:

OneAmerica – Best for Both Annuities and Insurance

If you are interested in exploring both a life insurance plan with long-term care or an annuity option, consider OneAmerica. They offer both options. Their life insurance is available for a single person or a couple.

Mutual of Omaha – Best for Options

You can get a long-term care rider with the indexed universal life insurance policies available through Mutual of Omaha. Applicants will have the option to select monthly payouts of 1%, 2%,  or 4% of their maximum benefit when they add-on the policy rider. If you don’t get a long-term care rider, you are automatically provided with their chronic illness rider at no extra charge.

Guardian Life – Best for Convenience

Should you want to streamline the payout process for your long-term care, Guardian Life offers an indemnity style rider which makes cash payments directly to the policyholder. They also offer long-term care riders on both their whole life insurance and universal life insurance plans.

Final Thoughts:

  • Long-term care riders can provide payments to policyholders who become unable to care for themselves.
  • These riders cover daily and long-term care assistance, such as home health care, assisted living, and nursing home care.
  • A few life insurance companies offer long-term care riders, like Guardian Life, Mutual of Omaha, and OneAmerica. 
  • There are a few other similar options available, including stand-alone long-term care insurance and long-term care annuities.
Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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