Long-Term Care Riders
Two riders let a life insurance policy pay for care. On a brochure they look almost identical. At claim they behave very differently, and only one of them is long-term care insurance. This page exists to make that visible before you buy, not after.
Read this first
Long-term care insurance is medically underwritten. Acceptance is not guaranteed and health history matters, which is why waiting until care is close usually removes the option entirely.
Medicare does not pay for custodial long-term care — help with bathing, dressing, eating and moving about. It pays only limited skilled care under narrow conditions. Check this for yourself at Medicare.gov or with your State Health Insurance Assistance Program before relying on anything an agent tells you.
A rider filed under Internal Revenue Code section 7702B IS long-term care insurance and is regulated as such.
A chronic illness rider filed under Internal Revenue Code section 101(g) is NOT long-term care insurance. It is an accelerated death benefit, and it may not be described or marketed as long-term care insurance.
The two behave differently at claim. A section 101(g) chronic illness rider generally requires the condition to be expected to be permanent, and the amount paid is commonly discounted at the time of claim, so the benefit is not known in advance. A section 7702B rider allows for recovery and normally pays a stated monthly percentage.
The problem it solves
A life insurance policy that also pays for care is an attractive idea, and the industry sells it two different ways. One rider is filed as long-term care insurance under Internal Revenue Code section 7702B. The other is filed as an accelerated death benefit for chronic illness under section 101(g).
The second one is often included at no additional premium, which makes it look like the better deal on a comparison sheet. It is not necessarily worse — but it is not long-term care insurance, it may not lawfully be described as such, and the way it pays is materially different in ways nobody discovers until they claim.
Three things happen, in this order
A section 7702B rider is long-term care insurance
Filed and regulated as long-term care coverage. It allows for recovery — the condition need not be permanent — and it normally pays a stated monthly percentage of the death benefit, so you know in advance what it will pay.
A section 101(g) chronic illness rider is an accelerated death benefit
It is not long-term care insurance and may not be described or marketed as such. It generally requires the condition to be expected to be permanent, and the amount paid is commonly discounted at the time of claim, so the benefit is not knowable in advance.
Both reduce the death benefit
Whichever rider you have, care money comes out of what your beneficiaries would otherwise receive.
Who this suits, and who it does not
The second list matters more than the first. An agent who only writes the first one is selling, not advising.
Worth considering if…
- You are comparing two life policies and one of them advertises a care feature, and you want to know what you are actually comparing.
- You want care protection attached to life insurance you were buying anyway, and you want to choose the rider deliberately rather than accept whatever the policy includes.
- Somebody has told you a policy 'includes long-term care' and you want to check whether that is accurate.
Probably not for you if…
- You need comprehensive long-term care coverage. A rider on a life policy is usually smaller than a dedicated policy and is limited by the death benefit. Look at traditional or hybrid coverage first and treat a rider as a supplement.
- You are choosing on the basis that one rider is free. A rider at no additional premium is normally paid for at claim through a discounted benefit. The cost is real; it is just charged later, when you have least ability to shop.
- You will not ask which section it is filed under. Without that answer you cannot compare two policies meaningfully, and no other detail on the illustration will tell you.
Who we would place this with
We are independent and place long-term care coverage with more than one company. The specific companies are not listed on this page yet, because we will not publish a name or a benefit we cannot cite to that company's own current material — the same rule the rest of this site follows. Premiums here depend on your age, your health and the benefit you choose, so they are quoted for you directly rather than published. Call and we will tell you exactly who we would approach for you and why.
Questions people actually ask
What is the actual difference between a 7702B rider and a 101(g) rider?
A section 7702B rider is long-term care insurance: it is filed and regulated as such, it allows for recovery rather than requiring a permanent condition, and it normally pays a stated monthly percentage of the death benefit so you know the amount in advance. A section 101(g) chronic illness rider is an accelerated death benefit, not long-term care insurance, generally requires the condition to be expected to be permanent, and is commonly discounted at claim so the amount is not known until then.
Why can a chronic illness rider not be called long-term care?
Because it is not long-term care insurance and calling it that would be misleading. The NAIC's Accelerated Benefits model regulation bars accelerated death benefit provisions from being described or marketed as long-term care insurance, and state law follows. If you have been shown a policy described as including long-term care, ask which code section the rider is filed under and get the answer in writing.
Is the rider that costs nothing the better deal?
Not necessarily, and the framing is the problem. A rider offered at no additional premium is typically paid for at claim, through a benefit that is discounted when you draw on it. A rider with an explicit charge more often pays a defined amount. Neither is automatically better — but comparing them on premium alone compares the wrong thing.
Does a rider replace a proper long-term care policy?
Usually not. A rider is limited by the size of the death benefit it accelerates, and a long care episode can exhaust it while leaving your family without the life insurance as well. Riders work best as a supplement to dedicated coverage, or as something rather than nothing for someone who cannot obtain a standalone policy.
Ask for a quote on Long-Term Care and Chronic Illness Riders
Tell us how to reach you and which state you are in. A licensed agent calls back, usually the same business day, and will tell you plainly if a fully underwritten policy would serve you better.
The other three
Same family, different jobs. Match the product to how long the need lasts.
Traditional Long-Term Care Insurance
A standalone policy paying a monthly maximum toward care, after an elimination period, up to a pool of benefit. You pay a premium for life, and if you never need care you get nothing back.
Worth a look if you are insurable, in your fifties or early sixties, and want the most benefit per dollar.
Hybrid (Asset-Based) Long-Term Care Insurance
A life insurance policy whose death benefit can be accelerated to pay for care, usually with a second pool that keeps paying after the death benefit is used up. If you never need care, your heirs get the death benefit.
Worth a look if use-it-or-lose-it is what has stopped you buying anything.
Annuity-Based Long-Term Care
An annuity whose value can be drawn on for qualified long-term care, often with easier underwriting than a standalone policy. Frequently confused with an annuity income doubler, which is a different thing entirely.
Worth a look if you have been declined elsewhere, or have an annuity doing no defined job.