Asset-Based Long-Term Care (LTC) Planning

Asset-Based Long-Term Care (LTC) Planning is a modern financial strategy that combines long-term care coverage with life insurance or annuities. It’s designed to help individuals prepare for future care needs without “wasting” premiums if care is never needed.

What Is It?
• A hybrid insurance product that merges:
• Long-term care benefits (for nursing homes, assisted living, or in-home care)
• Life insurance or annuity features (providing cash value or death benefit)
• Also called “linked-benefit” or “combination” plans

How It Works
• You invest a lump sum or pay premiums into a policy.
• If you need long-term care, the policy pays out benefits to cover those expenses.
• If you don’t need care, the policy still provides:
• A death benefit to your heirs
• Or cash value you can access

Key Benefits
• Tax-free payouts for qualified care expenses under the Pension Protection Act
• No “use-it-or-lose-it” risk like traditional LTC insurance
• Legacy protection: unused funds go to beneficiaries
• Flexible funding options: single premium, annual payments, or using existing assets
• No medical underwriting in some cases

Things to Consider
• Typically requires a larger upfront investment
• May not be ideal for those with limited liquidity
• Policy structure and benefits vary by provider

What It Covers
• Home health care
• Assisted living
• Nursing home care
• Hospice and caregiver training

If you're thinking about long-term care planning, this strategy can be a powerful way to protect your retirement savings while ensuring care needs are met. Want help comparing asset-based LTC to traditional insurance or Medicaid planning?