If you’ve decided to plan for every eventuality, you’d be smart to include a plan to cover long-term care. Someone turning 65 this year has an almost 70% chance of needing some type of long-term care, and about 13% of those will need it for five years or more. Long-term care is expensive and can drain your entire nest egg. But stand-alone long-term care insurance has the distinct disadvantage that if you are one of the lucky ones who doesn’t need long-term care, all that money you paid in premiums is wasted. That’s why someone came up with hybrid long-term care/life insurance policies. There’s a handful of companies offering such policies. The question is, which company is right for you?
Methodology
We got quotes from five hybrid long-term care insurance companies. Our client is a 50-year old woman in good health, non-smoking, living in Houston, Texas. We want to get $6,000 monthly long-term care benefit for 4 years period, or a total of $288,000 long-term care benefit.
These are the five companies we recommend if you’re interested in a hybrid long-term care life insurance policy. None of the quotes we got had an inflation option built in, but it’s something you might want to consider. Health care costs rise every year, and what $288,000 dollars buys you today won’t go nearly as far tomorrow, or in five or ten years. Policies with 3.0% inflation options are available, although they are more expensive. Below is the summary of these 5 quotes.
| Nationwide Care Matters | Lincoln Financial MoneyGuard III | OneAmerica Asset Care | Securian Secure Care Universal Life | Pacific Life’s PremierCare Choice | |
| Best for | Best for Cash Indemnity | Best for no elimination period | Best for Couples | Best Value | Best for flexibility |
| Premium years | 10 years | 10 years | 10 years | 10 years | 10 years |
| Annual premiums | $9,048 | $11,623 | $13,213 | $7,952 | $11,965 |
| Total premiums | $90,480 | $116,230 | $132,130 | $79,520 | $119,650 |
| Long term care benefits | $288,000 | $288,000 | $288,000 | $288,000 | $288,000 |
| Benefit period (years) | 4 | 4 | 4 | 4 | 4 |
| Maximum monthly benefit | $6,000 | $6,000 | $6,000 | $6,000 | $6,000 |
| Reimbursement or Cash indemnity | Cash indemnity | Reimbursement | Reimbursement | Cash indemnity | Either, your choice |
| Death Benefit | $144,000 | $156,000 | $200,000 | $144,000 | $144,000 and increase to $220,000 by Y10 |
| Full review | Full review | Full review | Full review | Full review |
Each policy has its own unique features, so you should evaluate these policies in all aspects to select the best one for you. However, we have set up the quotes for these policies to provide similar coverages so that we can compare the premiums. In that aspect, Secure Care Universal Life policy from Securian Financial (or formerly Minnesota Life) provides the best value with the lowest premiums at $7,952 a year.
>>MORE: Hybrid Long-Term Care Insurance: Explained
>>MORE: How Much does Long-Term Care Insurance Cost?
Below are the full analysis of each policy for your further consideration:
Nationwide Care Matters II – Hybrid Long-Term Care Insurance: Best for Cash indemnity
This policy assumes a 10-year payment of premiums. Nationwide recently updated this policy, making it much more competitive in today’s marketplace.
- Premiums 1-10 years: $9,048
- Total premium: 90,478
- Long-term care benefit: $288,000
- Benefit period: 4 years
- Maximum monthly benefit: $6,000
- Death benefit: $144,000
This policy provides $288,000 in long-term care benefits, should you need long-term care, and a $144,000 death benefit if you don’t. In addition, you also have the Return of Premium feature, which will return 70% of your premium to you in years 1-10 should you decide to cancel.
One thing that’s great about Nationwide’s Care Matters policy is that it’s a cash indemnity policy. That means they pay your benefit to you as soon as you qualify for care. You can spend it however you see fit, and Nationwide doesn’t even require receipts. It’s your money – $6,000 a month.
There is a 90-day elimination period. That means you will pay for your first 90 days of care out-of-pocket before benefits kick it. However, Nationwide will retroactively refund you those costs.
Also, read our full review of Nationwide’s YourLife CareMatters hybrid long-term care insurance policy.
>>MORE: Long-Term Care Insurance: Everything You Need to Know
Lincoln Moneyguard – Hybrid Long-Term Care Insurance: Best for no elimination period
This is a new product, Lincoln Moneyguard III, which replaces Lincoln MoneyGuard II, at a higher price.
This policy also assumes ten years of premiums and doesn’t allow for inflation.
- Premium years 1-10: $11,623
- Total premiums: $116,23
- Long-term care benefit: $288,000
- Benefit period: 4 years
- Maximum monthly benefit: $6,000
- Death benefit: $156,000
This policy has a 0 day elimination period—no having to pay out-of-pocket for up to three months before your long-term care benefits kick in. As soon as you qualify (certified as being chronically ill, with an illness expected to last at least 90 days) they will start reimbursing you for care. Notice we said “reimburse.” You have to pay for care out of your own pocket and provide receipts to Lincoln, who will then reimburse you.
You actually have two options for the Return of Premium (which is what you get back if you decide to cancel):
- Option one: 70% return of paid premium
- Option two: Vested—100% of your premiums are available after year 10. This option is about 20% more expensive.
Historically, not that many people cancel their long-term care insurance, so you have to decide whether it’s worth the extra 20% to possibly get 100% of your premium back if you cancel.
Also read our full review of Lincoln Financial’s MoneyGuard II hybrid long-term care insurance policy
OneAmerica Asset Care Hybrid Long-Term Care Insurance: Best for Couples
- Premiums years 1-10: $13,212
- Total premium: $140,460
- Long-term care benefit: $6,000 a month
- Yearly: $72,000 (A total of $288,000)
- Benefit period: 4 years
- Death benefit: $300,000
If you choose to, OneAmerica Asset Care can provide long-term care benefits to both you and your spouse. No other LTC policy offers that, making OneAmerica Asset Care unique in the hybrid insurance world.
Another unique feature is that OneAmerica offers a lifetime of long-term care benefits. The policy quote we were quoted was for 48-months, but you can get a policy that will provide you or your spouse life a lifetime of long-term care benefits. If you are diagnosed with Alzheimer’s and spend eleven years in a nursing home, OneAmerica will cover all of that.
The only drawback is the 90 day elimination period.
See more details in our full review of OneAmerica’s Asset-Care hybrid long-term care insurance policy
>>MORE: Life Insurance with Long-Term Care Benefits
Securian Secure Care Universal Life Hybrid Long-Term Care Insurance: Best Value
- Premiums years 1-10: $7,952
- Total premium: $79,520
- Long Term care benefit: $288,000 total
- Monthly benefit: $6,000 a month
- Benefit period: 4 years
- Death benefit: $144,000
Even if you use all of your long-term care benefits, Securian still guarantees a $10,000 death benefit, so you can cover final expenses.
Another great feature of Securian is that it’s a cash indemnity policy, meaning you get $6,000 a month to pay for long-term care services as you see fit. No need to clear it with Securian, spend the money how you like.
One drawback to Securian is the 90-day elimination period, although there is no waiting period to access funds for home modifications or caregiver training. Also, you may have noticed that Securian is a good value for the money, being much less expensive than the other policies.
Securian also has a 100% vesting return of premium after five years.
Also read our review of Securian’s SecureCare hybrid long-term care insurance policy
Pacific Life Premier Care Choice Max—Best for Flexibility
- Premium: $11,965/year for 10 years
- Long-term care benefit: $6,000/month for 4 years
- Total long-term care benefit: $288,000
- Death benefit: $144,000. Increase up to $220,000 by year 10
- 70% Return of premium
If you use all of your long-term care benefits, Pacific Life will still give you 5% of the base value of the policy, up to $5,000.
A great feature of this policy is that you can choose whether you want cash indemnity or a reimbursement plan. If you choose the cash indemnity plan, you get about 80% of your long-term care benefits, but you won’t have to submit receipts and you can do whatever you like with the money. You have to decide when you purchase the policy, though, and you can’t change it later.
You also get 70% of your premium returned if you change your mind.
Read our full review of Pacific Life’s PremierCare Choice policies, covering both Choice Max and Choice 100
There have been a lot of bad reputation in the long-term care insurance market in general. Companies increased premiums so significantly that led to several class action law suits. Several companies stopped offering long-term care insurance or exited the market altogether. You need to be careful when considering a long-term care insurance policy. Here are the list of companies we consider the worst long-term care insurance providers and strongly recommend avoiding.
Hybrid Long-Term Care Insurance Calculator: Calculate How Much Hybrid Long-Term Care Insurance Costs
The cost of a hybrid long-term care insurance policy depends on several factors: your age, your health condition, daily LTC benefit ($150 to $300), LTC duration (2-6 years), with or without inflation rider, etc. On top of that different insurance companies charge different amount for a similar policy. The best way to know how much a hybrid long-term care insurance policy will cost you is to get quotes from several companies and compare them.
To give you an idea of the cost of a hybrid long-term care insurance policy, we obtain several quotes for different profiles from a leading hybrid long-term care insurance company, Securian with its SecureCare product.
Below are annual premiums for an individual hybrid policy from Securian, if you pay for 10 years. The quotes assume that you are in good health condition. And if you don’t end up not needing long-term care, you can ask for full premium reimbursement or leave a tax-free death benefit of $216,000 to your beneficiaries when you pass away.
| Age | Sex | Daily benefit | Duration (years) | Total LTC benefits | Annual premiums (Securian) |
| 50 | M | $200 | 3 | $216,000 | $12,895 |
| 50 | F | $200 | 3 | $216,000 | $11,568 |
| 55 | M | $200 | 3 | $216,000 | $14,912 |
| 55 | F | $200 | 3 | $216,000 | $13,290 |
| 60 | M | $200 | 3 | $216,000 | $17,124 |
| 60 | F | $200 | 3 | $216,000 | $15,029 |
| 65 | M | $200 | 3 | $216,000 | $19,399 |
| 65 | F | $200 | 3 | $216,000 | $17,015 |
| 50 | M | $200 | 4 | $288,000 | $9,464 |
| 50 | F | $200 | 4 | $288,000 | $9,088 |
| 55 | M | $200 | 4 | $288,000 | $10,978 |
| 55 | F | $200 | 4 | $288,000 | $10,607 |
| 60 | M | $200 | 4 | $288,000 | $12,463 |
| 60 | F | $200 | 4 | $288,000 | $12,068 |
| 65 | M | $200 | 4 | $288,000 | $14,328 |
| 65 | F | $200 | 4 | $288,000 | $13,810 |
>>MORE: How Much does Long-Term Care Insurance Cost?
The Pros and Cons of Hybrid Long-Term Care Insurance
Hybrid long-term care insurance, also called linked policy with life insurance, is a policy that offers you both long-term care benefits, if you need them, and life insurance benefit, if you don’t need long-term care. If you have paid for a hybrid long-term care insurance policy, and you end up not need it, you can either ask for full premiums returned or leave a death benefit to your heirs similar to a permanent life insurance policy.
The biggest advantages of hybrid long-term care insurance include:
- you never waste the premiums that you paid
- it offers greater flexibilities in using long-term care benefits such as indemnity, ie, you don’t need to provide invoices, and international coverage, ie. the policy will still pay benefits if you need long-term care abroad.
- premiums are guaranteed to not increase
On the other hand, the biggest disadvantage of hybrid long-term care insurance is that it is much more expensive than a traditional long-term care policy. In our experience, a hybrid long-term care policy can cost 2-6 times more expensive than a traditional policy with similar coverage.
Is Hybrid Long-Term Care Insurance Worth It?
The short answer is that it depends. If you can afford it and want to leave some money to your family, yes, it is worth it. 70% of Americans older than 65 years old will need some form of long-term care. It is expensive and continues to get even more expensive. So, having long-term care insurance is a good decision. Hybrid long-term care insurance is a great product to protect you from the downsides of traditional long-term care insurance.
However, if you can’t afford it, you should at least consider a traditional long-term care insurance policy. And make sure you choose the right company. Here are the top 3 traditional long-term care insurance providers that we strongly recommend.
Either way, you always need to compare quotes from 3-5 great companies to make sure you have the best quote.
Last Thoughts
Hybrid long-term care policies eliminate the uncertainty that you’ll never use the benefts, because if you don’t need long-term care, your heirs will get a guaranteed, tax-free death benefit. Different companies offer different features at different prices, so it’s up to you to decide what you need and what you’re willing to compromise on. These five companies have good products, and it’s just a matter of finding the right one for you.
>>MORE: Accelerated Death Benefits (ADB) in Life Insurance for Long-Term Care
