Plan for Care.
Protect Your Legacy.
70% of people over 65 will need long-term care. Without a plan, the cost comes directly from your savings — and can deplete a lifetime of work in just a few years.
A private nursing home room averages $108,000/year nationally — and costs are rising 4–5% annually.
Three Approaches to Long-Term Care Funding
Traditional, hybrid, and short-term care options — each addresses a different profile and set of concerns.
Traditional LTC Insurance
Dedicated LTC policy that pays a daily or monthly benefit when you need qualifying care. Premiums are fixed (though they may increase over time), and policies offer the most customization in benefit amount, elimination period, and inflation protection.
- Highest benefit pool for the premium dollar
- Inflation protection riders (3% compound, 5% compound)
- Shared benefit and joint/spousal riders available
- State partnership programs protect assets from Medicaid spend-down
Hybrid / Asset-Based LTC
Combines a life insurance or annuity chassis with a long-term care benefit rider. Premium is typically paid as a lump sum or over a short period. If LTC is never used, a death benefit passes to heirs — eliminating the "use it or lose it" concern of traditional LTC.
- Guaranteed premium — no rate increases
- Death benefit if LTC benefits are never used
- Return-of-premium option on many products
- Can be funded with a 1035 exchange from a life policy or annuity
Short-Term Care Insurance
Provides coverage for 12 months or less — fills the gap between health insurance and a traditional LTC policy for shorter recovery periods or as a complement to limited LTC coverage. Lower cost and easier underwriting.
- Shorter underwriting process — easier to qualify
- Covers nursing home, assisted living, home care
- Complements gaps in existing coverage
- Useful for older applicants who can't qualify for traditional LTC
The Risk You Can't Ignore
Unlike life insurance, LTC is a high-probability event. Most people will need care — the question is who pays for it.
Cost of Care Reality
A private nursing home room averages over $100,000 per year nationally. Assisted living: $60,000+. Home health aide: $60,000+. Medicare covers only short-term skilled nursing care — not long-term custodial care.
Asset Protection
Without LTC insurance, the cost of care must come from your savings, investments, and home equity — a Medicaid spend-down that can devastate an estate in months. LTC insurance preserves what you've built.
Family Caregiver Relief
Without professional care funding, the burden often falls on adult children — particularly daughters — who leave work, sacrifice careers, and experience burnout. LTC insurance gives your family choices.
Choice of Care Setting
Adequately funded LTC coverage means you choose where you receive care: at home, in an assisted living facility, or in a skilled nursing facility. Without it, Medicaid dictates your options.
2025 Cost of Care — National vs. Virginia
Care costs vary by location and setting. These are current market rates — not projections.
| Care Setting | National Average | Virginia Avg. | Notes |
|---|---|---|---|
| Home Health Aide (Full-Time) | $61,776/yr | $57,200/yr | 44 hrs/week |
| Adult Day Care | $20,280/yr | $18,200/yr | 5 days/week |
| Assisted Living (Private Room) | $60,000/yr | $48,000/yr | Per bed, per year |
| Nursing Home (Semi-Private) | $94,900/yr | $89,000/yr | Medicaid rate area |
| Nursing Home (Private Room) | $108,405/yr | $99,000/yr | Private pay rate |
Inflation matters: LTC costs have been rising 4–5% annually. A $100,000/year nursing home today may cost $200,000–$265,000 per year in 20 years. Coverage with compound inflation protection is essential if you're purchasing before age 65.
Traditional vs. Hybrid: Side-by-Side
| Feature | Traditional LTC | Hybrid LTC |
|---|---|---|
| Premium Stability | May increase — historically common | Guaranteed — no rate increases |
| LTC Benefit | Higher benefit per dollar of premium | Lower benefit per dollar of premium |
| If LTC Is Never Used | Premiums "lost" — no residual value | Death benefit passes to heirs |
| Inflation Protection | Compound riders available | Often limited or absent |
| 1035 Exchange Eligible | No (new premium only) | Yes — fund with existing policy gain |
| Return of Premium | Available on some products | Available on many products |
| Underwriting | Full underwriting required | Full underwriting required |
| Best For | Maximizing LTC benefit; pure protection | Clients who resist "use it or lose it" |
Tax Advantages of LTC Insurance
The tax code provides significant incentives for LTC coverage — especially for business owners.
Tax-Qualified LTC Premiums Are Partially Deductible
Premiums for a tax-qualified LTC policy under IRC §7702B are treated as medical expenses. The deductible amount is capped by age: $480 (age 40 and under) → $890 (41–50) → $1,790 (51–60) → $4,770 (61–70) → $5,960 (over 70) for 2025. These are per-person amounts, and excess premiums aggregate with other medical expenses above the 7.5% AGI floor.
Benefits Received Are Generally Tax-Free
Benefits paid from a tax-qualified LTC policy are generally excluded from gross income, up to the greater of $420/day (2025 IRS per diem limit) or your actual qualified LTC expenses. If your daily benefit is below $420, the entire benefit is tax-free.
1035 Exchange: Fund a Hybrid with an Existing Policy
You can exchange an existing life insurance policy or annuity into a hybrid LTC policy under IRC §1035 without triggering income tax on the accumulated gain. This is a powerful strategy for clients who have policies with significant gain that they no longer need for their original purpose.
Business Deductibility for Owners
Self-employed individuals and S-Corp shareholders can deduct 100% of LTC premiums (up to the age-based limit) as a self-employed health insurance deduction. C-Corp owners can deduct the full premium as a business expense and receive benefits tax-free — making employer-paid LTC insurance one of the most tax-efficient executive benefits available.
Client Case Studies
Illustrative scenarios showing how the right LTC strategy protects assets and preserves choices.
Married Couple: Hybrid Strategy for Certainty
Married couple, ages 62 & 60, $800,000 in CDs and cash savings
Situation
Concerned about LTC costs but didn't want to pay traditional LTC premiums and "lose" them if care was never needed. Also had a matured life insurance policy with $180,000 of gain they no longer needed for income replacement.
Solution
1035 exchange of the old life policy into a hybrid life/LTC product. Single premium of $220,000 created: $440,000 combined LTC benefit pool (2× leverage), $3,000/month benefit for each spouse with a 3-year benefit period, and a $220,000 death benefit if LTC is never needed.
Key Results
Frequently Asked Questions
Not sure whether traditional or hybrid LTC is right for you? Let's walk through your situation together.
Your Future Self Deserves a Plan
The best time to plan for long-term care is before you need it. A single conversation can help you understand your options, estimate your risk, and take decisive action while you can still qualify.