If you conduct a Google search on this topic, you might see some of the following opinions:

“According to financial expert Suze Orman, it is okay to have a life insurance policy in place until you are 65, but after that, you should be earning income from pensions and savings.”

“Term life insurance is the best option for most people, including seniors, because it provides the most coverage at the lowest price.”

Unfortunately, the people that made the comments above have no idea what they are talking about. Most term insurance policies expire without ever paying a benefit because most people outlive the level term periods (e.g. 10, 15, 20 years). If you qualify for a term insurance policy your odds of dying within the term period are often less than 3%. Below are common reasons why you should have permanent life insurance over age 60:

1. Income replacement. Many people are still working over the age of 60, and the average retirement age has been increasing over the years.
2. You have children or grandchildren who are dependent on you.
3. You want to leave a family legacy (leave wealth to your heirs).
4. You have a complicated relationship with your significant other. In some cases, a person is not eligible to receive their partner’s social security and or pension benefits upon death.
5. Pension maximization. Many people have defined benefit pension plans (state and federal government employees typically do). When they retire, they usually have two options: a high monthly pension benefit that terminates upon the death of the retiring employee OR choose a lower monthly pension benefit that will continue for the life of both the retiring employee and their spouse. If you already own a permanent life insurance policy, it’s an easy decision to take the higher monthly benefit.
6. Estate equalization. Example 1: Dad owns a business that his daughter is running. When Dad dies, the son, who is not in the business, wants to sell the business and split the proceeds with his sister. Life insurance would allow the daughter to own and continue the business while paying off her brother with the death benefit proceeds.
   Example 2: Upon the mother’s death, the son wants to move into the family home. The daughter wants to sell the house and split the proceeds with her brother. In California, if a child moves into the home of a deceased parent, the child can continue to pay the same low property taxes the deceased parent was paying (son gets nice home with a huge discount on property taxes). The solution: life insurance.

Owning permanent life insurance over the age of 60 is the right choice, and the smart move is buying a permanent life insurance policy when you’re still young and healthy. Life insurance requires underwriting, and if you wait until age 60, it’s going to be more expensive. Plus, you are always healthy until one day you are not. If you wait too long you might not qualify for a life insurance policy in the future.

But do you know the most important reason you should have a permanent life insurance policy over age 60?

The ever-increasing cost of long term care.

According to the U.S. Department of Health & Human Services, the odds of an individual needing long term care are 630 in 900. That means 70% of people in the United States will need long-term care at some point in their life.

What does life insurance have to do with long-term care?

Virtually every major life insurance company offers a permanent life insurance product with a long term care (LTC) or chronic illness rider. These products are often referred to as “Hybrid Long Term Care Policies” or Hybrid LTC.

Why wouldn’t you just buy a traditional long term care policy?

As of today, there are only a couple of insurance companies that still offer a traditional long term care policy, and you don’t want to buy one of these policies. Here’s why:

• The premiums are not guaranteed and continue for life.
• The premiums will likely increase over the years, and if you don’t have a long term care event, you wasted your money, so you and your family receive nothing in return.
• The cost of a traditional LTC policy is often about the same as a Hybrid LTC policy that includes a death benefit.

With a permanent Hybrid Long Term Care Policy, you get both long term care protection AND death benefit protection. One way or another, these policies will pay off.

Life insurance has been around for hundreds of years and combining it with a long term care rider makes a lot of financial sense. An LTC claim on a hybrid policy is typically a pre-payment of the death benefit. The death benefit is typically reduced, dollar for dollar, for the insured’s long term care expenses. 

When should you buy a hybrid LTC policy?

Today! Because it will never be cheaper than it is right now. Hybrid LTC policies require underwriting. Next year, the same policy will be more expensive, simply because you’re one year older. And if you get sick or hurt in the future, it’s possible you will never qualify for a hybrid LTC policy.

Many people qualify for a standard life insurance policy, but they don’t qualify for the long term care rider, because both mortality and morbidity underwriting are typically required for hybrid LTC policies. Common issues that prevent people adding an LTC rider to their life insurance policy include: back, knee, hip, or joint pain; use of narcotic pain medication; history of anxiety or depression; uncontrolled diabetes; or persistent forgetfulness or memory loss. Additionally, many insurance carriers require seniors (ages 70+) to pass what’s called a “Senior Assessment” before they can qualify for a hybrid LTC policy, which many seniors can fail. But if you apply for a policy while you’re still young, the costs are much lower, and you won’t have to deal with a cognitive test (senior assessment).

Keep in mind there are lots of people in their 70’s that are qualifying for competitively priced hybrid LTC policies.

How much long term care protection do you need?

Today a typical long term care event will cost about $370,000. This would be the barebones minimum costs for a 3-to-4-year LTC event (not a high level of care).

How much will long term care cost in the future?

In 20 years, a typical long term care event is projected to cost at least $670,000. Again, this would be the barebones minimum costs over 3 to 4 years.

Even very wealthy people, who can easily afford a long term care event, are buying hybrid LTC policies. It just makes financial sense. Instead of paying dollar for dollar for a LTC event, for pennies on the dollar you can get some level of protection without depleting your estate assets and the best part, LTC benefits are paid out TAX-FREE.

If your long term care expenses are $10,000 per month, what assets are you likely to sell first? Often, people are pulling money out of their IRA, their 401(k) plans, or selling a rental property at the wrong time. You will pay taxes first and use what’s left to pay for your long-term care expenses. This can decimate your estate, destroy your lifestyle or your spouse’s lifestyle, and eliminate any legacy going to your kids. Thankfully, you can avoid all these terrible outcomes with a hybrid LTC policy.

How much does a Hybrid Long Term Care policy cost?

(female age 50, preferred underwriting examples 11/12/25)

Hybrid Long Term Care Policy 1

• $2,224 annual premium to age 100 (policy continues to age 125)
• $250,000 death benefit / LTC benefit pool
• $5,000 monthly tax free LTC benefit (2% LTC rider)
• 10.21% Pre-tax IRR on LTC benefit pool at age 81 (average age of an LTC event) (1)
• Probability policy will pay claim: 100%

Hybrid Long Term Care Policy 2

• $4,154 annual premium to age 100 (policy continues to age 125)
• $500,000 death benefit / LTC benefit pool
• $20,000 monthly tax free LTC benefit (4% LTC rider)
• 10.70% Pre-tax IRR on LTC benefit pool at age 81 (average age of an LTC event) (1)
• Probability policy will pay claim: 100%

Traditional Long Term Care Policy

• $4,221 annual premium for life
• Zero death benefit
• $240,000 initial LTC benefit pool
• $582,848 LTC benefit pool at age 81 (3% inflation rider)
• $5,000 initial monthly tax free LTC benefit increasing to $12,139 a month by age 81.
• 11.69% Pre-tax IRR on LTC benefit pool at age 81 (average age of an LTC event) (1)
• Probability policy will pay claim: 70%

Bear in mind insurance quotes are linear, half the premium provides approximately half the benefits.

If you decide to “self-fund” for a long term care event, you will likely need average returns north of 10% a year to provide the same benefits provided by a hybrid LTC policy (that’s a pretty good asset class).

1. Pre-tax equivalent internal rate of return (IRR) on the long term care benefit pool at age 81 assuming a 30% tax bracket (average age of an LTC event is age 81). In other words, the annual return required on premiums paid in a hypothetical taxable account for it to be worth $250,000, $500,000 or $582,848 in 31 years (age 81).

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