Pros and Cons of Hybrid Long Term Care Insurance


If you're considering purchasing a hybrid long term care insurance policy, you may want to understand exactly how hybrids differ from traditional LTC policies.

Here are some of the main advantages and disadvantages of choosing hybrid long term care insurance:




Premiums can be guaranteed not to increase.

  • This is perhaps the most significant advantage hybrid LTC insurance has over traditional LTC insurance.
  • Many people have been forced to cancel their coverage on traditional LTC policies due to catastrophic premium increases, and this is something you won’t have to worry about with a hybrid LTC insurance policy. 


You will receive a benefit from the policy no matter what.

  • This is another critical difference between hybrids and traditional LTC products. Many people are hesitant to purchase traditional LTC insurance because they know they will not receive anything from the policy if they never need long term care benefits. 
  • If you have hybrid life insurance with a long term care rider, you will be entitled to one of the following:
    • (If LTC benefits are used): Accelerated LTC benefits + partial death benefit to beneficiary
    • (If LTC benefits are not used): Full death benefit to beneficiary 
  • In addition to a death benefit, some hybrid policies offer a 'return of premium' option, specified cash surrender values, or a potential tax-favored income stream. These features are not available on traditional long term care policies.


There is a wider range of products to choose from.

  • Many companies have pulled out of the traditional LTC market due to the unprofitability of the policies and the financial burdens associated with policies that were sold too cheaply decades ago.
  • The hybrid LTC market, however, does not have this problem. The market is more diverse because hybrid policies are life insurance products and, as such, are not priced or structured like traditional LTC plans.
  • Different hybrid products can emphasize different features. For example, one company may offer higher death benefit amounts, another may offer longer LTC benefit periods, and another may feature a 100% return of premium option. This diversity allows consumers to find products that match their priorities and financial goals.


Indemnity payout

  • Some hybrid products offer an indemnity payout for LTC benefits, which gives the policyholder more freedom over how the benefits are spent. If your policy offers an indemnity payout, the insurance company will pay the benefit amount to you directly, and there is no need to submit receipts or applications for reimbursement.
  • For example, the indemnity payout gives you the flexibility to receive care at home from a close friend or family member rather than hiring a home health care agency that must be approved by the insurance company.




Less total coverage (in some cases)

  • For some people, hybrid long term care insurance may not provide as much total LTC coverage as a traditional policy. However, this depends on the individual, and the difference in the amount of coverage is often negligible. And any difference in total benefit amount must be weighed against the risk of receiving premium increases in the future.
  • At Hybrid Policy Advisor, we provide quotes for both traditional and hybrid long term care insurance products. This allows you to see the difference for yourself and make an informed decision.


LTC benefit payout reduces death benefit
  • When you become eligible to receive LTC benefits, money is taken from the death benefit.
  • Although hybrids are life insurance products, you may need a separate life insurance policy to fully cover your death benefit needs in case you exhaust the death benefit by taking money for LTC expenses.

In conclusion, the most fundamental differences between hybrid and traditional LTC products are the premium guarantee and the existence of a death benefit.

When weighing the pros and cons of hybrid long term care insurance, the premium guarantee and death benefit tend to make hybrid long term care insurance a safer and more attractive option compared to traditional LTC insurance. By purchasing life insurance with a long term care rider, you are able to secure LTC coverage without having to worry about future premium increases.

At Hybrid Policy Advisor, we compare quotes from a wide range of companies and make recommendations based on your specific needs and circumstances. We make it our mission to find the best long term care solutions for each and every client we serve.

Give us a call at 1-866-365-6558 if you would like to learn more.


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