Part of our guide: Long-Term Care Insurance: Costs, Options and Planning →
Many clients have heard about long-term care rate increases, and it makes them wary. Asset-based long-term care built on whole life insurance offers an answer: premiums and benefits that are guaranteed.
Key takeaways
- Traditional LTC premiums aren’t guaranteed and can rise if the carrier raises rates for a class of policies.
- Asset-based LTC built on whole life can guarantee premiums, death benefit, and LTC benefits.
- Many designs offer a return of premium option, and can be funded from CDs, savings, cash value, annuities, or qualified money.
Premiums that never increase, benefits that are guaranteed, and an option to get the premium back. That’s what clients worried about rate hikes want to hear.
Why guarantees matter
Traditional LTC policies have seen rate increases over the years, and clients who have heard those stories may hesitate. Asset-based products use the guarantees of whole life insurance to remove that uncertainty.
What can be guaranteed
- Premiums that never increase
- A guaranteed death benefit that can be used for long-term care
- A minimum guaranteed interest rate on cash value
- Optional lifetime benefits, so clients can’t outlive their coverage
- On some designs, a return of the single premium if the client changes their mind
Taxes and flexibility
- Qualified LTC benefits are generally received income-tax-free, and the death benefit is generally income-tax-free if unused.
- Cash value growth is tax-deferred.
- One policy can cover an individual or two people, such as spouses, partners, siblings, or a parent and child.
- Funding can come from CDs, money market, cash, life insurance cash value (via 1035 exchange), annuities, or qualified assets.
- Premiums can be single-pay, 1–20 years, or level for life.
Who it fits
Clients who want certainty and have assets to reposition. See no “use it or lose it” and four client profiles for asset-based LTC.
Frequently asked questions
Can long-term care insurance premiums go up?
Traditional LTC premiums can increase for a whole class of policyholders. Many asset-based policies guarantee premiums won’t increase.
What funds can pay for asset-based long-term care?
CDs, savings, cash, life insurance cash value, annuities, and qualified assets, depending on the product.
Are asset-based LTC benefits taxable?
Qualified LTC benefits are generally income-tax-free, and the death benefit is generally tax-free if unused.
Reviewed by Tim Fuller on 2026-09-25
Tim Fuller
President, SRS Inc.
Tim leads SRS Inc., a full-service IMO (Independent Marketing Organization) and BGA (Brokerage General Agency), connecting independent financial professionals with life, annuity, disability income, and long-term care solutions from 60+ carrier partners.
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