Asset-based LTC is a long-term care planning approach that uses life insurance or annuity products with built'in or attached long-term care benefits, instead of stand'alone traditional LTC insurance. In an asset'based LTC policy, a single premium or series of premiums funds a chassis that can provide LTC benefits, a death benefit, or a combination of both. If LTC is never needed, beneficiaries typically receive a tax'advantaged death benefit; if care is needed, the policy can accelerate and sometimes extend benefits to cover qualified LTC expenses. Asset'based designs help address consumer concerns about use it or lose it premiums and carrier rate increases that have affected legacy LTC blocks.

Advisors recommend asset-based LTC solutions to clients who have existing assets earmarked for future care, are wary of traditional LTC pricing, or like the idea of combining protection and legacy in one chassis. They compare benefit structures, inflation options, and 7702B tax treatment across life/LTC and annuity/LTC products, and coordinate designs with estate and income plans. Underwriting may focus more on morbidity than mortality, with attention to ADL limitations, cognitive status, and medical history. Advisors also explain that liquidity can be limited and that early surrender may involve charges. Understanding asset'based LTC enables advisors to offer flexible, hybrid solutions that meet care needs while preserving value for heirs if long'term care is never used.