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New Paths to LTC Coverage: Life and Care in One Plan

Author

Karen R. Terry, FLMI
Corporate Vice President, Director of LIMRA Insurance Research
LIMRA and LOMA
kterry@limra.com

December 2025

As America’s population ages and healthcare costs continue to rise, the need for long-term care (LTC) solutions has never been more pressing. More than half of individuals turning 65 will require some form of LTC support, yet many lack the financial resources or insurance coverage to meet these needs. Traditional stand-alone LTC insurance has faced challenges in the past, with carriers exiting the market and older products facing steep rate hikes. In response, insurers have pivoted toward offering LTC combinations with other insurance products, primarily life insurance products with LTC benefits.

Understanding Combination LTC Products

Combination LTC products integrate LTC benefits into life insurance policies, offering flexibility and financial security. The market primarily features three types:

  • Chronic Illness Riders (CI): allow acceleration of the death benefit for chronic illness care needs, governed by Section 101(g) of the Internal Revenue Code.
  • LTC Riders: provide advance payment of the death benefit for LTC needs, governed by Section 7702(b).
  • LTC Linked Benefits: provide life products with both LTC acceleration riders and extension of benefit riders, enabling payouts that exceed the death benefit, also governed by section 7702(b).

These products cater to consumers seeking comprehensive solutions that address both life insurance and LTC needs, reducing the financial and emotional burden associated with aging and caregiving. This year, LIMRA and EY partnered in a study to develop a holistic overview of the state of the combination product market.

Robust Consumer Demand

Consumer demand for LTC solutions is strong. Our research shows that 63 percent of individuals express a need for LTC-focused insurance. As the number of carriers and products in the stand-alone LTC market has declined, this demand has driven the shift from stand-alone LTC products to hybrid solutions. Younger generations — particularly Gen Z and Millennials — show the strongest interest, motivated by both financial protection and the flexibility of hybrid vehicles. Caregivers of aging relatives also exhibit heightened demand, underscoring the emotional and practical dimensions of LTC planning.

Market Segmentation

The mass affluent segment — ages 45–64, household income above $100,000 — remains carriers’ primary target. However, younger consumers and middle-income households represent untapped potential. The challenge is finding a way to make the premiums for these products affordable to less affluent consumers. In recent years, the introduction of longer premium structures and workplace-distributed products has helped to improve accessibility. While carriers have been slow to introduce workplace products, we are seeing interest and the introduction of new solutions. Indexed universal life (IUL) continues to dominate as the preferred chassis, while variable universal life (VUL) gains traction among high-net-worth individuals.

Business Strategy

Insurers are deploying targeted strategies to capture this growing market. Chronic illness riders are integrated into broader life portfolios, while LTC riders and linked-benefit products require specialized sales approaches. Key strategic levers include:

  • Competitive product design
  • Expanded distribution channels
  • Pricing optimization
  • Brand differentiation

Distribution

Distribution remains centered on independent agents, affiliated agents and broker-dealers. Carrier distribution priorities, however, vary depending on both product type and carrier experience in this market.

Figure 1. Distribution Strategy — Company Priorities

Filter the data in this chart by clicking on a color bar in the chart legend.

Carriers newer to the market rely on distribution partners with experience in this space. More experienced companies are focusing on expanding their reach by deepening existing relationships with their partners and entering new networks and channels.

Underwriting and Technology

Underwriting protocols have matured, with over 60 percent of carriers using six or more data inputs, including pharmacy checks, cognitive assessments and analytics. However, many carriers lack in-house morbidity underwriting expertise, which causes them to rely on vendors or simplified underwriting. Emerging technologies such as AI, biomarker testing, and digital cognitive tools promise further enhancements. On the technology front, carriers face challenges with legacy systems, prompting investments in scalable infrastructure and automation to support underwriting, claims, and policy administration.

The Road Ahead

The LTC combination market is poised to grow. Growing interest in workplace and annuity solutions suggests product innovation will be a key contributor to this space over the next few years. The continued coverage gap is also catching the interest of state and federal regulators. Insurance carriers should focus on key areas in the coming years.

  • Product Innovation as a Differentiator: Longer premium structures, workplace-distributed products, annuity products and ancillary benefits like wellness services will expand consumer choice.
  • Legislative Developments: State-level initiatives following the Washington Cares Act and federal proposals like the WISH Act could reshape the LTC landscape, creating opportunities for insurers to influence policy through advocacy.
  • Technology Investments: Scalable infrastructure will be essential for underwriting, claims automation and customer engagement.
  • Distribution Partnerships: Strengthening ties with current distribution partners through technology improvements, training, and support, as well as exploring potential partnerships with distributors connected to the middle market, will be key to unlocking growth.
  • Consumer Education: Raising awareness and knowledge among caregivers and younger generations through consumer education initiatives will be critical for future engagement.

Challenges such as affordability, underwriting expertise, and infrastructure limitations persist in the LTC combination market. By aligning strategic investments with evolving consumer needs and enhancements of key internal functions, carriers are poised to benefit from this growing market need.

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