Long-Term-Care Income Doubler

Long-term care is one of the largest uncontrolled expenses in retirement. According to industry data, the average cost of a memory-care or skilled-nursing facility exceeds $100,000 per year in most major metro areas, and a meaningful share of Americans over 65 will need some form of care for one or more years.

Traditional long-term-care insurance policies have become expensive, complicated, and — in some cases — financially troubled at the carrier level. Premiums have been raised substantially on in-force policies over the past two decades, and many prospective buyers find the cost-benefit analysis no longer works.

A long-term-care income doubler (sometimes called a 'LTC rider,' 'enhanced income rider,' or 'wellness benefit') is an alternative approach. The rider is attached to an annuity with an existing income stream — and in the event the annuitant qualifies for long-term-care benefits (usually by being unable to perform 2 of 6 activities of daily living, or having a qualifying cognitive impairment), the contractual income stream doubles (or increases by a defined multiplier) for a defined period, often up to 60 months.

The advantage over a stand-alone LTC policy is that the benefit is embedded in the annuity itself. If LTC is never needed, the income stream still functions normally and the benefit hasn't been 'wasted.' If LTC is needed, the higher income stream is often enough to bridge a 2–3 year care event without needing a separate policy.

Not every annuity offers an LTC doubler, and the terms vary meaningfully between carriers. For households concerned about long-term-care exposure but unwilling to buy a stand-alone LTC policy, a well-structured annuity with a doubler rider can often provide a more efficient solution.