What is a life insurance policy with a long-term care rider?

A life insurance policy with a long-term care rider lets one policy do two jobs. It is permanent life insurance, but the rider lets you accelerate the death benefit — drawing on it to pay for care while you are still living.

Whatever you use for care reduces the death benefit your family eventually receives; whatever you do not use is paid out to them. That built-in return of value is why these appeal to people who dislike the "use it or lose it" nature of traditional coverage.

You will see two rider types: a true long-term care rider (which reimburses qualified long-term care) and a chronic-illness rider (often cheaper, with somewhat different rules). Compared with a purpose-built hybrid policy, a life policy with a rider may provide a smaller pool of long-term care dollars, so it is worth comparing the actual care benefit, not just the premium.

General information only. This is educational and not insurance, legal, tax, or financial advice. Rules and products vary and change — confirm the specifics with a licensed professional.