Long-term care insurance vs. combination life insurance

What is long-term care insurance?

Long-term care insurance provides funding for long-term care, including nursing home or at-home care. It can be purchased for either a single person or a couple, with a shared benefit pool.

How much does long-term care insurance cost?

According to the American Association for Long-Term Care Insurance (AALTCI), these are the average costs of long-term care in 2026 for an initial benefit pool of $165,000 to $180,000:

Single male, age 55: $950 to $1,050 annually
Single female, age 55: $1,500 annually
Couple, age 55: $2,080 annually

What is combination life insurance?

Combination life insurance is available in two forms: a linked-benefit policy or a permanent life insurance policy with a long-term care insurance rider.

These policies allow access to a long-term care benefit pool if you need it. Benefits from qualified long-term care policies are generally received income-tax-free, up to IRS per-diem limits. Consult a tax advisor for your specific situation.. If you don’t use it, the money will go toward the death benefit.

You can add other riders to the policy, such as:

Accelerated death benefits
Disability income
Critical illness

Once a doctor signs off, you get a percentage of the overall death benefit for the insurance rider. For example, if you have a $500,000 life insurance policy and a rider that caps long-term care payments at 2% per month, you would have access to $10,000 a month for long-term care. However, taking that amount would deplete the death benefit after four years and two months.

How much does combination life insurance cost?

The AALTCI estimates the average cost of a combination life insurance policy in 2026 at $2,200 annually for a 55-year-old man and $3,265 to $3,750 a year for a 55-year-old woman. Rates vary by age and health status.

Differences between long-term care insurance and combination life insurance

The main difference between combination life insurance and long-term care insurance is that one covers only long-term care, while the other includes a death benefit.

Here are some things to know about the differences:

Combination life insurance provides permanent life insurance as well as long-term care coverage.
Long-term care insurance is only for long-term care.
Combination life insurance is more expensive than long-term care insurance.
Long-term care insurance premiums increase as you age. Combination life insurance premiums are usually consistent.
With a standalone long-term care insurance policy, if you never need care, you generally do not recoup the premiums you paid — unlike a combination policy, where unused long-term care funds remain as a death benefit for your beneficiaries.

What long-term care plan is right for you?

If you're only concerned about paying for long-term care, look into a standalone policy. If you want a policy that provides a death benefit but can also be used if you need long-term care, consider a combination life insurance policy.

Here are questions to ask yourself:

What do you want out of a policy? Do you just want long-term care coverage or the ability to transform that money into a death benefit?
How much money do you have to spend on a policy?
Do you already have life insurance or do you need a policy?
Do you have beneficiaries who need a death benefit?
Are you OK with spending higher rates for long-term care insurance as you age?

The answers to those questions will help you figure out what’s a better choice.

Then, your next step is to talk to a financial planner. Create budgeting and financial modeling to figure out whether you need long-term care protection.

If you feel you need it, shop around and get quotes from multiple companies. You may want to price both long-term insurance and combination life insurance to see which avenue makes sense for you.

How do people pay for long-term care?

Medicare usually doesn’t cover long-term care. Medicare covers your medical expenses, but when it comes to long-term care, you’re generally on your own.

One exception is people who qualify for Medicaid. Medicaid will pick up a portion of the costs of long-term care.

However, if you don’t qualify for Medicaid, you’ll need to figure out a way to pay for long-term care. That could result in your family selling your home to help pay for nursing home care.

Long-term care can cost thousands a month, so having a plan to pay for it is important.

When can you use long-term care protection?

A doctor must diagnose you with cognitive impairment or deem you incapable of performing at least two of six daily living activities:

Bathing
Continence
Getting dressed
Eating
Toileting
Transferring (moving to and from a bed or a chair)

Once a doctor signs off, you’re able to submit claims for your long-term care. Once you get the OK for long-term care insurance, you, your family or your representative can file claims.