What Is Hybrid Long-Term Care Insurance?

• By: Olivia Overman
• September 29, 2025

While the traditional long-term care (LTC) insurance market has declined in premium volume and become more concentrated, the same does not hold true for the newer hybrid LTC policies being sold, according to the American Association for Long-Term Care Insurance (AALTCI).

Hybrid LTC insurance policies—which combine long-term care coverage with life insurance or annuity products—have gone from just over 300,000 policies in force in 2015 to over 900,000 policies in 2022, according to the American Association of Retired Persons (AARP).

“Hybrid policies became more popular around 2010 and have continued to gain traction in the market,” says Kelly Augspurger, long-term care insurance specialist and certified senior advisor, Steadfast Insurance. “Hybrid policies can either allow you to accelerate the death benefit for care or they can allow you to accelerate the death benefit for care and have an extension of benefits—an additional bucket of money for care beyond the death benefit. The latter will also typically allow you to add inflation protection, which is typically desired.”

The financial strain of LTC can be significant, but the option of a hybrid LTC and life policy combination opens up another avenue for agents to present to their clients. November is National Long-Term Care Awareness Month, and agents can use the upcoming opportunity to not only raise the sensitive issue of LTC but also identify the pros and cons of a hybrid LTC insurance policy.

Here are four benefits of a hybrid LTC policy:

1) Consistent premium rate. “For the hybrid policy, there’s a life insurance product that’s underneath it that is guaranteed from a price perspective,” Snyder says. “So, when you buy it, that’s the rate for as long as you have it.”

2) Reimbursement or indemnity options. Approximately 80% of people want to stay in their own homes if they are in need of LTC and their preference is that a family member takes care of them. An indemnity-based product will allow people to stay in their homes and actually pay a family caregiver for care given, even if they are not certified. “This would not be allowed under the reimbursement chassis, and they wouldn’t qualify at all under a traditional LTC policy.”

Forty-three percent of consumers value the choice of receiving care at home or in a facility, according to data from LIMRA, and three in 10 consumers said they liked the ability to use benefits for home modifications or equipment that will allow them to remain in their homes longer.

3) Payment options. “There is a lot of flexibility in a client’s payment options, including lump sums, monthly payments, payments to age 65 or to age 100,” Snyder says. “You can use a portion of your LTC, you can get all of it, you can bank it—there’s lots of flexibility in how you draw down the benefits.”

Additionally, “you can take less than what you’re actually due and bank the remaining for the future,” she explains. 

“If you don’t exhaust your entire death benefit for LTC, then the remaining death benefit is payable upon death,” Augspurger says. “For example, if your death benefit is $100k, but you only used $75k for LTC, the remaining $25k is payable upon death. If you exhaust your death benefit for LTC and pass away after, then there’s no remaining death benefit.”

4) Cost-effective. Hybrid LTC products are considered more cost-effective than standalone LTC policies in many cases, according to LIRMA data, with 26% of Americans likely to consider hybrid products in 2021, which was a 7-point increase since 2019.

Thirty-five percent of consumers also believe that a life combination product would be a more economical use of their assets, and 33% say their benefits will still be paid even if they don’t incur long-term expenses, according to LIMRA.

However, agents should also highlight for clients some drawbacks to LTC policies. Firstly, the combination of LTC and life insurance benefits into a hybrid policy can be more expensive than traditional LTC policies. Second, for clients focused on legacy planning, using LTC benefits in a hybrid policy can reduce the death benefit.

Olivia Overman is IA content editor.