Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Content Writer & Entrepreneur Shuman Roy

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jun 29, 2022

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The Truth in a Nutshell

  • You can add long-term care to your life insurance policy
  • Hybrid coverage is cheaper than traditional long-term care insurance
  • Hybrid coverage rates are guaranteed

Life insurance can be an inexpensive way to cover long-term care, but only with the right policy. There are life insurance companies that allow long-term care withdrawals out there, and there are a number of different options for coverage.

How much does life insurance cost with a long-term care rider or withdrawal option? Is it the right choice for you? We’ll explain this and more right here.

Before learning about life insurance companies that allow long-term care withdrawals, enter your ZIP code to get free life insurance quotes in your area.

Why should you consider life insurance with a long-term care option?

Traditional long-term care insurance has become less popular over the years. That’s because it’s expensive, difficult to understand, and rates increase unexpectedly. As a result, those that need help paying for long-term care are looking elsewhere.

Medicare and Medicaid are two possible ways to get help with medical needs. However, Medicare only pays for short stays in nursing facilities for rehabilitation or therapy after a hospital stay. That’s not enough for someone with physical or mental decline, who might need help with daily tasks like:

  • Bathing
  • Dressing
  • Eating
  • Using the toilet
  • Transferring to or from a bed or chair
  • Caring for incontinence

Medicaid will help with long-term care at home or in a nursing facility. However, participants must have a limited income and assets to qualify. The qualifications differ by state, but your income can’t exceed $2,000 for an individual and $3,000 for a married couple in most areas.

Those who don’t qualify for Medicaid support will need some kind of long-term care insurance. However, since you pay into long-term care insurance before needing it and won’t receive a refund of your payments if you never use it, some people want another option.

Affordable life insurance companies that allow long-term care withdrawals alleviate this concern. You can take money out of your policy to pay for long-term care, and that money goes into your cash value or death benefit if you don’t need assisted living.

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What options are there for life insurance long-term care coverage?

Life insurance companies provide multiple options for covering your long-term care needs. In most cases, customers can add a rider to a life insurance policy that will help cover long-term care expenses. However, these options are only available for permanent life policies.

The best hybrid long-term care life insurance policies include:

  • Linked benefit
  • Long-term care rider
  • Accelerated death benefit rider

Let’s take a deeper look at these options for life insurance with long-term care.

Linked Benefit

A linked benefit is a hybrid option that connects your life insurance policy with a long-term care policy. The long-term care benefit amount is usually equal to about five times your premium. If it turns out that you don’t need long-term care, the money foes to your loved ones as part of the death benefit.

Long-Term Care Rider

You can add a long-term care rider to your life insurance policy for an additional fee. However, you must add it at the time of purchase. You can’t attach these riders to a policy at a later date. What is an insurance rider? It’s an add-on option you can choose for extra benefits.

The benefits of this rider are not as extensive as traditional long-term care coverage or linked-benefit policies. However, this is a good option for someone more concerned with life insurance than long-term care.

Accelerated Death Benefit Rider

Many life insurance companies automatically include accelerated death benefit riders that allow policyholders to access a portion of their death benefit before death if they suffer from a chronic, critical, or terminal illness. If your policy doesn’t include this rider, you can usually add it for an additional fee.

Customers with chronic, critical, or terminal conditions are likely to require long-term care. They can use the money from this rider to pay for care in a facility or at home.

Each of these options allows you to bundle your life insurance with your long-term care. The ability to bundle is a significant advantage over life insurance companies that don’t allow long-term care withdrawals.

What are the pros and cons of life insurance with a long-term care withdrawal option?

There are advantages and disadvantages of using a hybrid life insurance policy instead of traditional long-term care insurance. Knowing these pros and cons will help you decide if this type of policy is right for you.

Some of the positives of combined life insurance and long-care policy include:

  • Guaranteed rates: Life insurance rates won’t increase over time.
  • Flexible payment options: Customers can pay in one lump sum or pay in multiple payments over time.
  • Easy qualification: It’s easier to qualify for a hybrid policy than traditional long-term care insurance because the underwriting is less stringent.
  • Can pay a family caregiver: If the hybrid policy uses an indemnity model, which pays cash rather than reimbursement for care, you can use it to reward a family caregiver.

Some of the negatives of a hybrid policy include:

  • Limited customization: Long-term care is an add-on to a life insurance plan, so fewer customization options exist.
  • Reduction of cash value or death benefit: Money is taken out of the death benefit to pay for long-term care.

Weighing these pros and cons when considering quotes for life insurance with long-term care coverage will help you decide if this type of policy is the best option.

How can you buy life insurance with long-term care coverage?

Many of the top life insurance companies allow customers to withdraw money for long-term care. For example, some of the companies that provide this benefit include:

  • Lincoln Financial
  • OneAmerica
  • Nationwide
  • Pacific Life
  • Securian Financial

In addition to allowing long-term care withdrawals, the Insurance Information Institute provides some tips on choosing the right life insurance company.

When purchasing a hybrid life insurance policy, you’ll have to fill out a questionnaire about your health and have a phone or face-to-face interview. In addition, the insurance company might check your medical records and prescription history.

Many permanent life policies require medical exams for acceptance. However, if you prefer to avoid a medical exam, you can purchase a guaranteed-issue policy. This option features automatic approval but higher life insurance rates.

To determine how much care will cost, you can find a long-term care insurance cost calculator online. This calculator will allow you to estimate the amount of your coverage and determine what it will take for you to save up for it.

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Life Insurance Companies That Allow Long-Term Care Withdrawals: The Bottom Line

Long-term care insurance can be expensive and difficult to understand. However, many life insurance companies alleviate these problems by providing long-term care riders. Knowing about life insurance companies that allow long-term care withdrawals will help you find the most affordable coverage.

Now that you know about life insurance companies that allow long-term care withdrawals enter your ZIP code to find free life insurance rates from top companies in your area.