Asset-Based LTC Plans
Reposition existing assets like CDs, savings, or low-performing investments into a plan that provides long-term care coverage with built-in guarantees.
What Are Asset-Based LTC Plans?
Asset-based plans — also called hybrid LTC — let you use a single premium or limited payments to fund combined life insurance and long-term care coverage. Instead of paying ongoing premiums that you may never get back, you reposition assets you already have into a plan that works for you no matter what happens.
Think of it as “killing two birds with one stone.” If you need care, the policy pays for it. If you don't, your beneficiaries receive a tax-free death benefit. And if you change your mind, you can get most or all of your premium back. There is no “use it or lose it” scenario.
How It Works: Three Outcomes, One Plan
Pay a lump sum or spread payments over 5–10 years, then enjoy triple protection.
If You Need Care
The policy pays for home health care, assisted living, or nursing home care — often providing 2–3x your initial deposit in total LTC benefits.
If You Never Need Care
Your beneficiaries receive a tax-free death benefit — often equal to or greater than your original deposit. Your money is never wasted.
If You Change Your Mind
Get 80–100% of your premium back through the cash value surrender option. Your money remains accessible at any time.
Smart Funding Strategies
You don't have to give up your savings to fund an asset-based LTC plan. Many clients use the “interest on savings” method to fund premiums while keeping their principal intact.
Interest on Savings Method
Example: A $100,000 CD earning 4% generates $4,000 per year. Use a portion of that interest to fund limited-pay premiums while keeping your $100,000 principal completely intact.
Your savings continue to earn interest — a portion simply redirects into LTC coverage.
Reposition Underperforming Assets
Move low-performing CDs, savings accounts, or bonds into a single-premium asset-based plan. Your money goes from earning minimal interest to providing leveraged LTC coverage, a death benefit, and accessible cash value.
Turn idle money into triple-duty protection for your family.
Key Advantages Over Traditional LTC
Asset-based plans solve the biggest complaints about traditional long-term care insurance.
Guaranteed Premiums
Your premiums are locked in and will never increase. Unlike traditional LTC policies, there are no class-wide rate hikes to worry about.
Return of Premium
If you decide the policy isn't right for you, surrender it and receive 80–100% of your premium back. Your money is never trapped.
Death Benefit
If you never use the LTC benefits, a tax-free death benefit passes to your beneficiaries. No more “use it or lose it.”
Cash Value Access
Your policy builds cash value that you can access at any time. This provides liquidity and flexibility that traditional LTC policies simply cannot offer.
The Cost of Care You're Protecting Against
Without a plan, these costs come directly out of your savings, investments, and home equity.
Annual national median costs. Your area may be higher. View detailed cost data →
Who Is an Ideal Candidate?
Asset-based LTC plans are best suited for individuals and couples who want guaranteed coverage and value from their premiums no matter what happens.
Tax Advantages
Asset-based LTC plans offer multiple tax benefits that enhance the value of your coverage.
Tax-Free Death Benefit
The death benefit paid to your beneficiaries is federal income tax free, just like a standard life insurance policy.
Tax-Free LTC Benefits
LTC benefits received are income tax free up to certain per diem limits set by the IRS, maximizing the value of every dollar you receive in care.
Tax-Deferred Growth
Cash value inside the policy grows tax deferred, similar to an annuity or retirement account, letting your money compound more efficiently.
Potential LTC Premium Tax Deduction
Some carriers — including OneAmerica, Securian, Nationwide, and MassMutual — structure their policies to break out the LTC premium component separately. This may allow you to claim a separate tax deduction for the LTC portion of your premium, subject to IRS age-based limits. Consult your tax advisor for eligibility.
Popular Riders & Add-Ons
Customize your asset-based plan with optional riders to expand your coverage.
Shared Care Rider
8–20% additional premium
Spouses or partners can share a combined benefit pool. If one spouse exhausts their benefits, they can draw from the other’s pool.
Survivorship Benefit Rider
~10% additional premium
If one spouse passes away while the policy is in force, the surviving spouse’s premiums are waived for the remainder of the policy.
Return of Premium Rider
25–75% additional premium
Guarantees that if you surrender the policy or pass away without using LTC benefits, you or your beneficiaries receive a full return of premiums paid.
Restoration of Benefits Rider
4–6% additional premium
If you use LTC benefits and then recover, your benefit pool is restored to its original amount — giving you a full reset if care is needed again later.
Asset-Based LTC vs. Relying on Medicaid
Asset-Based LTC Plan
- Protect your assets and leave a legacy for your family
- Choose your care setting — home, assisted living, or nursing facility
- Guaranteed premiums that never increase
- Tax-free death benefit if you never need care
- Cash value accessible at any time
- No complex trust arrangements or asset-hiding strategies required
Relying on Medicaid
- Must deplete nearly all assets to qualify (typically under $2,000 for an individual)
- 5-year lookback period penalizes asset transfers
- Limited choice of care facilities — many top-rated facilities don’t accept Medicaid
- No home care coverage in most states until assets are gone
- Surviving spouse may face severe financial hardship
- Complex and expensive legal strategies (trusts, spend-downs) often required
See How Asset-Based LTC Can Work for You
As independent brokers, we compare asset-based plans from every major carrier to find the right fit for your assets, goals, and budget. Get a personalized illustration with no obligation.