A properly structured hybrid LTC policy produces a favorable outcome in every scenario — whether care is needed or not. Here is the math, scenario by scenario.
Figures below are based on a policy illustration for a couple aged 50. Individual results will vary based on age, health, and policy design.
To illustrate the win-win structure, consider this policy for a couple both aged 50:
The $234,048 one-time premium is less than one year of Bay Area joint LTC care — which costs approximately $288,000 annually ($24,000/month × 12). One premium deposit funds a lifetime of coverage.
No matter what happens, this policy produces a positive outcome. Here are four possible futures:
"There is no losing outcome."
— Withbert W. Payne, CPA, CA, CGMA
| Scenario | Self-Insuring ($234K reserve) | Hybrid LTC Policy |
|---|---|---|
| Cancel immediately | $234,048 (unchanged) | $158,288 surrender value |
| 35 years of care needed | Reserve depleted in <1 year; then out-of-pocket | $10,080,000 paid — lifetime |
| Care never needed | $234,048 stays in estate (taxable) | $400,000 to heirs — tax-free |
| Surrender at age 85 | $234,048 (no growth assumed) | $301,992 (+$67,944) |
In every scenario, the hybrid policy matches or outperforms the self-insurance reserve — and in the care-needed scenario, it is not even close.
See these four scenarios calculated for your specific age, premium level, and health profile — on a single page. Complimentary, no obligation.
Request an Illustration →Disclaimer: All figures shown on this page are drawn from a policy illustration for a couple both aged 50 at time of application. Policy figures including premium, cash surrender values, monthly LTC benefits, death benefit, and scenario outcomes are illustrative and are not guarantees of future performance. Actual results will vary based on age, health, carrier underwriting, premium amount, and policy design at time of application. LTC benefits are generally received income-tax-free under current IRC provisions; tax laws are subject to change. Death benefit tax treatment depends on policy ownership structure and individual circumstances. The self-insurance comparison assumes no investment return on the reserve; actual returns will vary. This page is for informational purposes only and does not constitute an offer or solicitation to sell insurance. This is a solicitation for insurance.