What is asset-based long-term care insurance?

Asset-based long-term care is a combination of life insurance and long-term care insurance. It gives you the flexibility to use the benefit for long-term care if you need it or as a death benefit for your beneficiaries if you don’t.

What is long-term care, and why would I need it?

Long-term care covers the daily assistance many of us require as we age, like help getting around the house or apartment, cooking meals, and getting dressed. These are collectively known as activities of daily living (ADLs). When people reach the point at which they need help with these tasks, they often look to three types of care: home care, assisted living, or nursing homes. Unfortunately, Medicare and most health insurance plans do not help with these sorts of costs, and they can be high. That leaves many families struggling to figure out how to take care of a loved one.

Asset-based long-term care insurance can be the answer. It’s a life insurance policy that allows you to use some of your benefits for long-term care should you need it. If you don’t, the benefits will go to your family (or any beneficiary you choose) when you pass away. These policies are sometimes also called combination life policies, linked-benefit policies, or hybrid life policies.

Long-term care needs are common

Eventually, most people will need a little help with daily activities, but that doesn’t mean you will need to be placed in a nursing home. There are many kinds of long-term care. You may only need a home health aide for a few hours a week to help with laundry and other chores. As we age further and mobility decreases, assisted-living facilities can meet both your medical and social needs while allowing you to maintain much of your independence. 

Long-term care can have a significant financial effect

The national average cost for a nonmedical professional home health aide is $29.12 an hour. That means if you need 20 hours of care a week, it will cost more than $30,000 a year. If medical assistance or more hours from an aide are required, costs can escalate quickly. The average cost of a private room in a nursing home is more than $116,000 a year.² For many, these costs can be prohibitive.

Related: Calculate your long-term care costs

How does asset-based long-term care insurance work?

While different policies will have different benefits and terms, asset-based long-term care insurance works for a variety of outcomes. It provides long-term care insurance if you need it or a life insurance benefit for your family if you don’t. Your cash value grows tax deferred, and policy benefits are tax free.

• You pay a premium (either up-front or over time).
• Should you need help with long-term care, you’re covered for a set amount of time.
• Whatever is left over becomes a death benefit paid to your beneficiary. If the long-term care benefits are fully utilized, the beneficiary still gets 10 percent of the original face amount.*

Is asset-based long-term care insurance right for me?

Most of us save for a comfortable retirement all our working lives. Long-term care needs can quickly cut into the funds you’ve set aside for your retirement. If you have enough saved and have a rainy-day fund, you may not need long-term care insurance at all. But it’s important to be prepared. Asset-based long-term care strategies can give you the flexibility to help cover multiple scenarios, and they guarantee a level of benefit,** which makes them more attractive to a lot of customers.

Asset-based long-term care insurance cost

Usually, the premiums of asset-based long-term care policies are a little more expensive than those for traditional long-term care policies. This is because of the flexibility they provide, with benefits that are guaranteed to help where you need help most. At New York Life, Asset Flex from New York Life Insurance and Annuity Corporation premiums start at $10,000, and you can pay in a variety of ways, including installments of five, 10, or 15 years.

Learn more about asset-based long-term care insurance

Below, you’ll find important related articles and resources to help you make an informed decision. When you’re ready, speak with one of our trusted agents to go over all your options. An agent can answer any questions you have and work with you to find the solution that’s best for you and your family. 

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¹“How Much Care Will You Need?,” LongTermCare.gov, 2020.

²“Long-Term Care Costs by State and Region,” New York Life Insurance Company, 2023.

*Residual death benefit is capped at $25,000 in New York.

**Guarantees are based upon the claims-paying ability of the issuer.

The purpose of this material is solicitation of individual insurance. An insurance agent may contact you. Policy forms ICC14-LTC6, LTC6, LTC6-U, ICC18-LTCD PLCY (0218), LTCD PLCY (0218), LTCD-U PLCY (0218), LTC6 (NY), LTCD PLCY (NY) (0218), and any state-specifics, are issued by New York Life Insurance Company, New York, NY. Policy forms ICC20-AF-MP, ICC20-AF-SP, AF-MP, AF-SP, AF-SP-NY, and AF-MP-NY, and any state-specifics, are issued by New York Life Insurance and Annuity Corporation, Newark, DE, a wholly owned subsidiary of New York Life Insurance Company, New York, NY. These policies have exclusions and limitations. The amount of benefits and premium depend on the product options selected. Underwriting approval is required to purchase coverage and a medical exam may be required. Premiums vary by issue age. The company reserves the right to increase premiums in the future on policy forms ICC14-LTC6, LTC6, LTC6-U, ICC18-LTCD PLCY (0218), LTCD PLCY (0218), and LTCD-U PLCY (0218), LTC6 (NY), and LTCD PLCY (NY) (0218). For costs and complete details of the coverage, contact your agent, or the company. New York Life Insurance Company and New York Life Insurance and Annuity Corporation each have sole financial responsibility for their own products.

This material may not provide complete details regarding all features and benefits offered by an NYL Secure Care, NYL My Care, or Asset Flex policy. In all cases, actual policy language will govern the administration of the contract. Benefits may vary by state. Check with your agent for specifics.

ICC22-5058965 and 5058965