Many clients have money sitting in savings accounts, money market funds or CDs that they think of as a safety net but never plan to spend. Repositioning part of those dollars into a linked-benefit life and long-term care policy can put that money to work against one of retirement’s biggest risks.
Key takeaways
- Idle savings earmarked for ‘just in case’ can be repositioned to address a future long-term care need.
- Linked-benefit policies can multiply a single premium into a larger death benefit and a larger pool of LTC benefits.
- If care is never needed, heirs receive an income tax-free death benefit, and many policies offer a return-of-premium option.
Close to 70% of people turning 65 will need some form of long-term care, yet many are self-funding that risk with money sitting in savings.
Finding idle money
Ask clients about funds they hold for emergencies or “someday” that they don’t expect to use for living expenses. These dollars are often in low-yield accounts, and a portion may be earmarked, consciously or not, for health care costs later in life. With care costs rising (see our post on long-term care costs), that is exactly the risk a linked-benefit policy is designed to address.
How linked-benefit coverage works
A linked-benefit (asset-based) policy combines life insurance with long-term care benefits, often funded with a single premium or a short payment schedule. The premium buys:
- A death benefit that is typically larger than the premium paid
- A pool of long-term care benefits that can be a multiple of the premium, depending on age, gender, health and product design
- Liquidity features, such as a return-of-premium provision on many products, so clients can get some or all of their premium back if they change their mind (terms vary by carrier)
For a deeper look at product designs, see our overview of asset-based long-term care.
Why clients like it
- If they need care, qualified long-term care benefits are generally received income tax-free.
- If they never need care, beneficiaries receive a generally income tax-free death benefit.
- If they change their mind, return-of-premium options can provide an exit.
This “use it or pass it on” structure often resonates with clients who have been reluctant to buy traditional long-term care insurance.
Getting started
The leverage a client receives varies considerably by age, health, gender and carrier, so comparing products matters. Contact our long-term care specialists, and we’ll help you identify good candidates in your book and compare linked-benefit options across our carrier partners.
Frequently asked questions
What is a linked-benefit long-term care policy?
It is a life insurance or annuity policy with built-in long-term care benefits. The policy pays for qualified care if needed, and pays a death benefit to heirs if care isn’t needed or isn’t fully used.
Can I get my money back from a linked-benefit policy?
Many linked-benefit policies include a return-of-premium provision that lets the owner recover some or all of the premium. Terms vary by carrier and product, so check the specific policy.
Are linked-benefit LTC benefits taxable?
Qualified long-term care benefits are generally received income tax-free, and the death benefit is generally income tax-free to beneficiaries. Clients should confirm details with their tax advisor.
Reviewed by Tim Fuller on 2026-09-26
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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