Should We Buy Hybrid Long-Term Care Insurance In Our 60S?

TL;DR

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A Kiplinger report examined a retired couple, ages 65 and 66, considering two hybrid life and long-term-care policies costing about $15,000 annually. Financial experts said the quoted premium alone is not enough to judge the offer: the couple should review how long premiums last, the actual care benefit, underwriting, and the after-tax cost of funding the policies.

A Kiplinger report has examined whether a retired couple, ages 65 and 66, should buy two hybrid life and long-term-care policies at a combined cost of about $15,000 a year. Advisers quoted in the report said the premium could fall within a reasonable range for their ages, but they could not judge the offer without details on payment duration, care coverage, the couple’s finances and the tax cost of withdrawals.

The couple’s adviser proposed a $250,000 life insurance policy for each spouse, with coverage that could also pay for nursing-home or other long-term care. The couple said the premiums would total roughly $15,000 annually, or about $7,500 per person, taken from retirement savings. They asked whether that price was reasonable and how the choice might fit with their goal of leaving assets to two adult children.

Sonja Breeding, a certified financial planner and senior vice president of wealth management at Rebalance, told Kiplinger that $7,500 per person was within a reasonable range at their ages. But she said the couple needs to find out whether premiums continue for life or are due only for a fixed period, such as 10 years. A fixed payment period and lifelong premiums create very different total costs.

Nicholle Overkamp, founder and CEO of Wilcox Financial Group, said the first question should be what financial risk the couple wants to address, rather than whether the quoted rate looks attractive. She said the decision depends on their assets, goals and ability to pay for care themselves. Both experts also cautioned that withdrawals from pre-tax retirement accounts may add taxable income and affect the money left invested.

The Cost Goes Beyond Premiums

The decision could affect both the couple’s retirement income and what remains for their heirs. At the costs cited in the report, long-term care can create a substantial expense: CareScout’s 2026 figures put average annual assisted living at $82,482 and a shared nursing-home room at $118,424. Those figures provide context, not a forecast of what this couple will pay; care needs and local prices vary.

Buying coverage may shift some care costs to an insurer, but the policy is not automatically a better choice than keeping and investing the premium money. Overkamp said that if the couple has enough wealth to pay for care without threatening financial security, preserving control of their assets could be more suitable. If they cannot comfortably absorb those costs, insurance may have a different role.

The funding source matters too. Overkamp said retirement-account withdrawals could raise taxable income and potentially increase Medicare premiums, while also reducing invested assets. Breeding illustrated the tax effect with a 22% tax-bracket example: to have $15,000 available for premiums, the couple might need to withdraw more than $19,000 from a pre-tax account. That is an example, not a calculation of this couple’s actual tax bill.

What the Proposed Policy Covers

The proposal is described as hybrid life and long-term-care insurance: it combines a life insurance benefit with a potential pool of money for qualifying care. The report does not provide the actual policy documents, so its benefit figures are illustrative rather than confirmed terms of the couple’s offer.

Breeding said a standard policy with a $250,000 death benefit might provide a monthly care benefit equal to about 2% of that amount—roughly $5,000 a month for about four years. Some policies also offer an extension rider that can continue payments after the death benefit is used, potentially bringing total care benefits to $500,000 or more per person. The couple would need to verify whether their specific policies include such a rider, its cost and the conditions for using it.

Coverage also depends on qualifying for the policy. The report’s experts said applicants at 65 and 66 would face medical underwriting; health conditions could lead to rejection or higher premiums. The couple’s health status and eligibility were not provided.

“The proposed premiums would be funded through retirement account withdrawals, potentially creating additional taxable income, increasing Medicare premiums, and reducing invested retirement assets.”

— Nicholle Overkamp, quoted by Kiplinger

Policy Terms and Tax Effects Remain Unknown

The report does not establish whether the couple has decided to buy, whether the quoted $15,000 annual cost is guaranteed, or how many years premiums would be due. It also does not include the policy illustrations, care eligibility rules, inflation protection, waiting periods, benefit caps or any rider costs. Without those details, the actual value and amount of available coverage cannot be determined.

The couple’s assets, income, health and tax situation are also not disclosed. Those facts affect whether self-funding is realistic, whether either spouse can qualify, and how a retirement-account withdrawal would affect taxes or Medicare premiums. The report’s examples should not be treated as personalized estimates. It also does not provide enough detail to quantify how the policies would affect the couple’s inheritance or their children’s taxes.

Review the Offer Before Committing

The next step is to obtain the full policy illustrations and compare them with the couple’s retirement plan. They should confirm how long premiums are payable, whether the amount can change, the care benefit available each month, how long benefits last, what triggers eligibility, and what happens to any unused benefit at death.

They can then compare the coverage with estimated care costs and the assets they could use to pay those expenses. The analysis should include the after-tax cost of each possible funding source and the effect of withdrawals on retirement balances and Medicare premiums. The report does not describe a final decision or a future event; the couple’s next development will depend on the policy terms and their own financial and health information.

Key Questions

Is $7,500 a year per person a reasonable premium at ages 65 and 66?

Breeding told Kiplinger that the amount was within a reasonable range for their ages, but said the couple needs to know whether payments last for life or a set term. The premium alone does not establish whether the policy is a good fit.

How much long-term-care coverage might a $250,000 policy provide?

Breeding offered an example of about $5,000 per month for roughly four years, with some policies adding an extension rider. Those figures are not confirmed terms for the couple’s proposed policies; they should check the actual contract and benefit illustration.

Could the couple pay for care without buying insurance?

That depends on their assets, income, care needs and willingness to use savings for care. Overkamp said self-funding may be an option if they can absorb the cost without jeopardizing financial security, but the report does not disclose enough about the couple to determine that.

What are the risks of paying premiums from retirement savings?

Withdrawals from pre-tax accounts may create taxable income, could affect Medicare premiums and leave less money invested. Breeding’s example in a 22% tax bracket showed that more than $19,000 might need to be withdrawn to net $15,000, but the couple’s own tax impact is unknown.

Source: rss