Traditional vs. Hybrid Long Term Care Insurance

Last updated on May 24, 2023

What is the difference between traditional and hybrid long term care insurance?

Traditional long-term care insurance (LTCi) is a type of insurance that helps cover the costs of long-term care services, such as nursing home care, home health care, and adult day care. These policies typically have a set daily or monthly benefit amount, a benefit period (the length of time the policy will pay out benefits), and an elimination period (the length of time the policyholder must pay for care before the policy begins to pay out benefits). The policies may also pay out for non-professional care provided by a spouse or loved one, depending on the policy model.

Hybrid long-term care insurance, also known as “combination” policies, combines traditional long-term care insurance with another financial product, such as a life insurance policy or an annuity. These policies provide long-term care benefits, but they also have a savings or investment component. This means that if the policyholder doesn’t use the long-term care benefits, the savings or investment component can be passed on to beneficiaries tax-free as a death benefit.

The main difference between traditional and hybrid long-term care insurance is that traditional LTCi policies only pay out benefits for long-term care, while hybrid policies have a savings or investment component in addition to long-term care benefits. Hybrid policies may also offer more lenient underwriting than traditional policies.

Some of the top insurance companies with hybrid LTCi products are:
BrightHouse Financial, Lincoln Financial, and OneAmerica

And the top insurance companies for traditional LTCi products are: Mutual of Omaha and National Guardian Life

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