How Hybrid Long-Term Care Insurance Can Protect Your Savings and Home

If you’ve ever looked into the cost of nursing home care, you know how overwhelming it can be. The average cost of long-term care in Maine and across the U.S. continues to rise each year — and Medicare covers only a small portion of those expenses.

Private long-term care (LTC) insurance can be difficult to qualify for and increasingly expensive. Many people are left wondering how to plan for future care without draining their life savings.

The good news is that a hybrid long-term care insurance policy may offer a better solution.

What Is a Hybrid Long-Term Care Insurance Policy?

A hybrid policy combines life insurance or an annuity with long-term care coverage. These policies may also be called:

• Life/LTC or life and long-term care policies
• Linked-benefit plans
• Combination or “combo” life insurance policies
• Policies with “accelerated death benefits” or “living benefits”

In short, this type of plan provides benefits if you need long-term care — and if you don’t, your loved ones still receive the life insurance payout. It’s a flexible, two-in-one financial protection plan.

How Hybrid Long-Term Care Insurance Works

Here’s an example:

You purchase a hybrid policy with a $100,000 death benefit. Later, you need $50,000 in long-term care. The policy pays those costs directly. When you pass away, your beneficiary still receives the remaining $50,000 from the death benefit.

If you never require long-term care, your heirs receive the full $100,000 tax-free, just like a traditional life insurance policy.

Some policies even offer refunds of premiums if you change your mind or cancel coverage, and many allow you to lock in rates at the time of purchase — meaning your premiums will never increase.

Tax Benefits and Financial Advantages

Hybrid policies may offer several financial advantages:

• Tax-free death benefits for your beneficiaries if you don’t use your LTC coverage.
• Guaranteed premiums that never rise over time.
• Tax-free rollover options from an existing whole-life or annuity policy with a large cash value.
• Enhanced coverage for those who can make a one-time lump-sum premium payment — often doubling the face value in LTC protection.

When compared with simply saving money at a modest interest rate, a hybrid policy can offer immediate long-term care value that might otherwise take decades to accumulate.

What Hybrid Policies Can Cover

Coverage varies by insurer and policy design, but most plans may include:

• At-home care or in-facility care options
• Daily or monthly benefit limits
• Inflation protection riders
• Elimination period options (some policies pay immediately, others after a short delay)
• Adjustable benefit ratios between long-term care coverage and death benefit

When evaluating a plan, always confirm that the insurance company is financially stable and capable of paying long-term claims for decades to come.

Additional Resources

For more information, the National Association of Insurance Commissioners (NAIC) offers a free, comprehensive resource:
👉 Shopper’s Guide to Long-Term Care Insurance (PDF)
It includes detailed shopping tips, questions to ask, and comparisons of coverage options.

Protecting Your Home and Assets with a Comprehensive Plan

At Aging in Maine, we can help you design a long-term care plan that fits your needs and budget.

Our approach often includes:

• A hybrid insurance policy to fund care costs; and
• An irrevocable trust to protect your home, savings, and property from future nursing home or Medicaid (MaineCare) claims.

Together, these tools create a powerful safeguard for your financial security and peace of mind.

Plan Today for Tomorrow’s Care

Don’t wait until a medical crisis forces difficult financial decisions.
Let our team help you protect what matters most — your home, your savings, and your independence.

📞 Contact Aging in Maine today to schedule a consultation and discover how a hybrid long-term care plan can work for you.