How to Choose the Right Long-Term Care Strategy: A Smart Decision Guide for Clients

Smart Money
Nov 6, 2025
3 min read

As health care costs continue to rise, long-term care (LTC) planning has become one of the most important financial decisions clients face. Whether it’s home care, assisted living, or skilled nursing, the expenses can quickly erode retirement assets if not properly planned for.

Yet with so many LTC solutions now available, clients and advisors alike often struggle to determine the best fit.

At Smart Money Financial, we believe LTC funding should be viewed as risk management, not “just another product”. To help simplify the conversation, we’ve built a decision framework that filters solutions by age, health profile, liquidity preferences, and financial goals.

Let’s walk through the key options.

Step 1: Start With Age and Risk Profile

Different LTC products work better at different stages of life:

Ages 40–65 → Traditional Long-Term Care Insurance
Ideal for younger, healthier individuals who want the highest benefit leverage for the lowest premium.
Ages 30–70 → Linked-Benefit Universal Life (UL)
Offers both life insurance and LTC access — a dual-purpose approach.
Ages 40–65 → Hybrid Asset-Based LTC
Attractive for clients with idle assets who want to reposition money for leverage.
Ages 65–80+ → LTC Annuity
Often available with simplified underwriting — a strong option for clients with health challenges or entering retirement late.

Step 2: Understand Liquidity Needs and Client Goals

Client’s approach LTC planning differently. Some want maximum leverage; others want flexibility or guarantees.

Choose based on the priority:

Traditional LTC
- Lowest cost per dollar of LTC coverage
- Strong inflation protection
- No residual value if unused
Linked-Benefit UL
- Provides a death benefit even if LTC is never used
- Flexible funding (annual or single pay)
Hybrid Asset-Based LTC
- Repositions existing assets for enhanced LTC benefit
- Potential return of premium
LTC Annuity
- Higher liquidity and account value
- Simplified underwriting

Feature Comparison at a Glance

Feature	Traditional LTC	Linked-Benefit UL	Hybrid LTC	LTC Annuity
Funding Style	Annual premium	Annual or single pay	Single pay	Single or flexible
If No Claim	No value	Death benefit	Death benefit / Return of premium	Account value
Underwriting	Strict	Moderate	Strict	Simplified
Inflation Options	Strong	Limited	Strong	Limited
Best Age Window	40–65	30–70	40–65	65–80+
Liquidity	Low	Moderate-High	Moderate	High
Typical Leverage	5–8× premium	3–5×	3–6×	2–3×

Advisor Takeaways

Different profiles call for different solutions:

✅ Younger, healthy clients (under 60):→ Traditional LTC provides the most efficient leverage.

✅ Mid-career clients (ages 40–65):→ Linked-Benefit UL offers dual purpose — life insurance + LTC.

✅ Retirees sitting on idle cash:→ Hybrid Asset-Based LTC or LTC Annuity creates leverage without losing control of assets.

✅ Late-retirement or uninsurable clients:→ LTC Annuities with simplified underwriting can still provide meaningful coverage.

Your Role as an Advisor

Long-term care decisions are deeply personal. Advisors help clients:

Protect retirement portfolios
Preserve family wealth
Reduce caregiver burden
Maintain independence and dignity

Position these solutions as risk-management tools, not product sales. When structured correctly, LTC funding becomes a strategic shield — not a cost.

Final Thoughts

The best LTC plan is not one-size-fits-all. It’s tailored to: