By Marc Gilman
(800) 927-9326 |
“Hybrid LTC” isn’t one product — it’s a category, and two of the more commonly discussed options in it, OneAmerica Asset Care and EquiTrust Bridge, are built on genuinely different foundations. One is a life insurance policy with long-term care benefits attached. The other is a fixed index annuity with an LTC rider. That difference in chassis shapes almost everything else about how each one behaves.
Key Takeaways:
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Asset Care is a life insurance policy with an LTC rider (though OneAmerica also offers an annuity-based version); Bridge is exclusively an annuity with an LTC rider — that structural difference, not just the numbers, drives most of the meaningful distinctions between them.
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If long-term care is never needed, the two pay out differently at death. Asset Care’s death benefit passes as life insurance proceeds, generally income-tax-free. Bridge’s remaining annuity value passes with the gain portion taxable as ordinary income to beneficiaries. On the front end, standalone LTC premiums are often tax-deductible up to IRS limits, while hybrid premiums typically aren’t — a real trade-off against the “nothing is wasted” advantage.
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The two carriers carry meaningfully different financial strength ratings. OneAmerica (issuing through American United Life) holds an A+ (Superior) rating from A.M. Best. EquiTrust holds a B++ (Good) rating, and its long-term issuer credit rating was actually downgraded by A.M. Best earlier in 2026.
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Both use simplified underwriting relative to standalone LTC insurance, though the specifics — required health questions, guaranteed acceptance thresholds, video assessments — vary by product.
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Couples should specifically ask about shared or joint benefit structures — Asset Care offers a shared care rider that pools spouses’ benefits, and this kind of feature varies significantly by product rather than being standard across all hybrid LTC options.
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Specific numbers (benefit multipliers, growth rates, payout caps) require an actual carrier illustration — generic comparison tables circulating online often use hypothetical figures that don’t reflect current, individualized rates.
What Makes These Two Products Structurally Different?
Asset Care is most commonly written on a life insurance chassis — technically a whole life or universal life policy — with long-term care benefits available as an acceleration of the death benefit while you’re alive. It’s worth knowing that OneAmerica actually offers Asset Care on both a life insurance and an annuity-based chassis, so the comparison isn’t always as clean as “one is life insurance, the other is an annuity” — confirm which version you’re looking at. Bridge, by contrast, is built exclusively on an annuity chassis — a fixed index annuity — with an LTC rider that provides a benefit funded partly by your accumulation value and partly by the insurance company once that value is drawn down. Both are commonly grouped together under “hybrid LTC” or “asset-based LTC” in industry discussion, but they’re not interchangeable products, and the underlying chassis matters for tax treatment, how premiums are typically structured, and what happens to unused value.
How Does Each Handle the Money If Long-Term Care Is Never Needed?
This is one of the more meaningful differences between the two, and it comes directly from the chassis each is built on. Life insurance death benefits are generally received income-tax-free by beneficiaries under federal tax law — that’s true of Asset Care’s death benefit if long-term care is never used, the same way it would be true of any life insurance policy. An annuity works differently: when a non-qualified annuity passes to a beneficiary, the original principal isn’t taxed, but the gain above that principal is taxable as ordinary income to whoever receives it. Since Bridge is annuity-based, any growth in the accumulation value that passes to heirs would generally be subject to that same treatment. Neither approach is inherently better — it depends on whether the tax-free nature of a death benefit or the flexibility of an annuity structure matters more for your specific plan.
There’s a separate tax distinction worth knowing on the front end, too: premiums on standalone long-term care insurance are often deductible as a medical expense up to IRS age-based limits, while premiums on hybrid products like Asset Care and Bridge typically aren’t deductible at all. That’s a real cost difference to weigh alongside the “premiums aren’t wasted if care is never needed” advantage hybrids offer — the trade-off isn’t entirely one-directional in the hybrid’s favor.
How Do the Carriers’ Financial Strength Ratings Compare?
This is worth stating plainly rather than glossing over, since a long-term care benefit is exactly the kind of long-duration promise where carrier strength matters. OneAmerica’s life insurance entities (American United Life Insurance Company and The State Life Insurance Company) currently hold an A+ (Superior) rating from A.M. Best — the second-highest of the agency’s 15 rating categories — along with an AA- rating from S&P Global, and have maintained an A rating or better for over 70 consecutive years. EquiTrust currently holds a B++ (Good) rating from A.M. Best, the fifth-highest category on that same scale. It’s also worth knowing that A.M. Best downgraded EquiTrust’s long-term issuer credit rating earlier in 2026 (from bbb+ to bbb), citing a weaker capital adequacy measure and high asset concentration, while affirming the B++ Financial Strength Rating itself held steady with a stable outlook.
Neither rating makes a product automatically right or wrong for you, but a lower or recently-downgraded rating is a real factor to weigh consciously on a benefit you may be counting on decades from now — not something to overlook because the product’s other features are appealing.
What About Coverage for Couples?
If you’re evaluating this as a couple rather than an individual, it’s worth asking specifically about shared or joint benefit structures, since they aren’t automatic and vary by product. Asset Care offers a shared care rider that lets couples pool their benefits — if one spouse exhausts their own individual benefit, they can continue drawing on the other spouse’s unused pool, subject to the contract’s specific rules. That matters most when health histories differ significantly between spouses, since it means a lower-risk spouse’s unused coverage doesn’t just sit idle if the higher-risk spouse needs more care than their own policy alone would cover. Whether Bridge or a similar annuity-based hybrid offers an equivalent shared structure varies by product and isn’t something to assume — confirm directly with the carrier or your agent rather than assuming every hybrid product handles couples the same way.
How Does Underwriting Differ Between the Two?
Both products generally use simplified underwriting compared to standalone LTC insurance, which typically involves a full medical exam and extensive health history review. The specifics differ by product and can change over time — some hybrid products offer truly guaranteed acceptance for anyone who passes basic suitability requirements (placing higher-risk applicants in a more conservative benefit class rather than declining them outright), while others use a shorter health questionnaire with the possibility of decline for certain conditions. If simplified or guaranteed underwriting is the deciding factor in your decision, it’s worth confirming the exact current underwriting requirements directly from the carrier or your agent rather than assuming all “simplified issue” hybrid products work identically.
What Should You Actually Compare Before Choosing?
Be cautious of generic comparison tables that show specific dollar figures — an “if you pay $150,000 you get $X monthly benefit” illustration — without being tied to your actual age, gender, health class, and state. Benefit multipliers, monthly payout caps, growth rates, and premium requirements all vary by these individual factors, sometimes significantly, and a hypothetical example built for a generic 65-year-old isn’t a reliable stand-in for your own numbers. The only comparison worth acting on is a real, current illustration from each carrier for your specific situation, run side by side.
A few features worth asking about specifically when you do get real illustrations: whether a continuation-of-benefits or lifetime extension rider is available once the base contract’s LTC benefit is exhausted, whether an inflation protection option is offered and what it costs, what happens to your premium if you surrender in the early years, and exactly what triggers eligibility for benefits under each specific contract. It’s also worth asking whether the product guarantees a residual death benefit even if you draw down your entire LTC benefit — some hybrid products preserve a small guaranteed payout (commonly cited around 10% of the original death benefit) for beneficiaries even after LTC coverage is fully exhausted, which is a different question than what happens if LTC is never used at all.
One more distinction worth confirming for each product: whether the LTC benefit pays as indemnity or reimbursement. Bridge pays on an indemnity basis, meaning you receive the full monthly benefit regardless of your actual care costs that month, with no receipts required — and critically, indemnity benefits can generally be used to pay a family member providing informal care, not just a licensed provider. Reimbursement-style benefits, more common on traditional LTC policies but sometimes used in hybrid products too, only pay out what you can document in actual qualified expenses from a licensed caregiver, with receipts required. If keeping the option open to compensate a family caregiver matters to your plan, this distinction is worth confirming directly rather than assuming.
Inflation protection is worth taking seriously rather than skipping to keep the premium lower — a $200,000 LTC benefit today is worth meaningfully less in future dollars once actual care costs rise, and care costs have historically outpaced general inflation. To put a real number on it: AALTCI data cited by Morningstar shows a 55-year-old woman buying a linked-benefit hybrid policy with $180,000 in LTC benefits and a $120,000 death benefit would pay a single premium of about $54,000 without inflation protection, versus $76,740 with a 3% annual inflation adjustment — roughly 42% more for the inflation rider alone. That’s a real, sourced illustration of the trade-off, even though your own numbers will differ based on age, benefit amount, and the specific product.
How Much Does the Care You’re Insuring Against Actually Cost?
It’s worth grounding this comparison in real numbers before getting into product features. According to the Genworth Cost of Care Survey, monthly costs have ranged from about $2,058 for adult day care services up to nearly $9,733 for around-the-clock care in a nursing facility, and the average long-term care event lasts two to four years, according to the federal government’s LongTermCare.gov. Multiply even a mid-range monthly cost by a multi-year care event, and it’s easy to see why a benefit pool in the low hundreds of thousands can be exhausted faster than people expect — which is exactly why benefit period length, monthly caps, and any continuation-of-benefits option matter as much as the headline premium when comparing products.
Where Does Insurance Planning Fit In?
Choosing between a life-insurance-based hybrid and an annuity-based hybrid — or standalone LTC insurance, or a GLWB-equipped annuity, or recovery care insurance — depends on which structural trade-offs actually matter to your situation: tax treatment of unused value, carrier financial strength, underwriting requirements, and how much premium you’re able to commit upfront. These aren’t decisions to make from a generic comparison chart. Reviewing real, current illustrations from multiple carriers against your specific goals is the only way to know which structure actually fits.
What To Do Next
If you want to see how OneAmerica Asset Care, EquiTrust Bridge, or another hybrid LTC approach would actually work for your situation, we’re glad to run real illustrations and walk through them with you. Call us at (800) 927-9326 or email — no pressure, just straight answers.
By Marc Gilman, Gilman Agency
This information is general in nature and not intended as tax or legal advice. Product features, underwriting requirements, benefit multipliers, and rates vary by carrier, product, and individual circumstances, and are subject to change. A.M. Best and S&P ratings reflect financial strength assessments as of the dates cited and can change at any time. Confirm current ratings and product details directly with the carrier before making any decision. Consult your tax advisor regarding your specific situation.
Sources: A.M. Best, OneAmerica Financial (American United Life Insurance Company and The State Life Insurance Company) financial strength rating affirmations; A.M. Best, EquiTrust Life Insurance Company financial strength and issuer credit rating actions (2026); S&P Global Ratings, OneAmerica Financial rating affirmations; EquiTrust Life Insurance Company, company ratings disclosure; Internal Revenue Code Section 101(a) life insurance proceeds tax treatment; IRC Section 72 non-qualified annuity taxation guidance; Morningstar, “Is a Long-Term Care ‘Hybrid’ Policy Right for You?” citing American Association for Long-Term Care Insurance (AALTCI) and Society of Actuaries research; CBS News, “Long-Term Care vs. Hybrid Long-Term Care: Which Is Better, According to Experts?”; Brighthouse Financial, “This Long-Term Care Isn’t a ‘Use-It-or-Lose-It’ Policy,” citing the Genworth Cost of Care Survey (December 2023) and U.S. Administration for Community Living, LongTermCare.gov; Ash Brokerage, “What Your Clients Are REALLY Wondering About Hybrid LTC.”
