Does Long-Term Care Insurance Have Cash Value?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Understanding Long-Term Care Insurance

Long-term care insurance is designed to cover the costs associated with long-term care services, including in-home care, assisted living, and nursing home care. These policies help protect your savings and provide financial support when you need it most. However, the concept of “cash value” in long-term care insurance is not as straightforward as it is in other types of insurance policies, such as whole life insurance.

Traditional Long-Term Care Insurance

Traditional long-term care insurance policies generally do not accumulate cash value. These are pure insurance products, meaning they are designed solely to cover long-term care expenses. You pay premiums, and in return, the policy provides benefits when you need long-term care. If you never need long-term care, the premiums paid do not get returned, and there is no cash value component to these policies.

Hybrid Long-Term Care Policies

However, there is a type of long-term care insurance that does offer a form of cash value: hybrid long-term care policies. These policies combine long-term care insurance with a life insurance policy or an annuity. Here’s how they work:

  1. Life Insurance with Long-Term Care Rider: This type of policy provides both a death benefit and long-term care benefits. If you need long-term care, you can use the death benefit to pay for care expenses. If you don’t use the long-term care benefits, your beneficiaries receive the death benefit upon your passing. These policies often have a cash value component that can grow over time, similar to whole life insurance.
  2. Annuities with Long-Term Care Rider: These are annuities that include a rider for long-term care. The annuity grows over time, and if you need long-term care, you can use the annuity’s value to cover those costs. If long-term care is not needed, the annuity continues to grow and can be used for other retirement needs.

Pros and Cons of Hybrid Policies


  • Cash Value Accumulation: Unlike traditional LTC policies, hybrid policies can build cash value over time.
  • Flexibility: They offer flexibility in how benefits are used, providing either long-term care benefits or a death benefit.
  • Guarantees: These policies often come with guarantees that traditional policies do not, such as a guaranteed return of premium if long-term care is not needed.


  • Cost: Hybrid policies can be more expensive than traditional LTC insurance due to the additional benefits and guarantees.
  • Complexity: These policies can be more complex, making it important to understand all aspects before purchasing.

Making the Right Choice

When deciding between traditional and hybrid long-term care insurance, consider your financial goals, health status, and family needs. Hybrid policies can provide added security and flexibility but at a higher cost. Traditional policies are straightforward and may be more suitable if you are primarily concerned with covering potential long-term care expenses without the need for additional benefits.

Does Long-Term Care Insurance Have Cash Value

What We Recommend

In summary, traditional long-term care insurance does not have a cash value component, while hybrid policies that combine long-term care insurance with life insurance or annuities do offer a form of cash value. Understanding the differences and evaluating your personal needs will help you make an informed decision about which type of policy is best for you.

Evaluate your financial situation and goals carefully when choosing a long-term care insurance policy. Consider whether the added benefits and cash value potential of hybrid policies align with your needs and if the higher cost is justified.

Contact us for a free consultation to receive personalized advice and explore your long-term care insurance options. Let us help you find the best policy to secure your future.

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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