Not All International Benefits Are the Same on Hybrid Life and Long Term Care Insurance Policies – Long Term Care University
Long Term Care University – Question of the Month – 08/15/26
By Aaron Skloff, AIF, CFA, MBA
Q: Do all Hybrid Life and Long Term Care Insurance policies off the same international benefits?
Overview. Hybrid Long Term Care (LTC) Insurance with international benefits is a critical safety net for retirees who plan to live, travel, or expatriate abroad. Without explicit global coverage, a sudden medical crisis or the natural cognitive decline of aging in a foreign country can instantly trigger large out-of-pocket costs or force the accelerated and/or premature liquidation of retirement assets.
International benefits, particularly those structured on a cash indemnity model, provide financial flexibility by delivering direct cash payouts that bypass rigid U.S. licensing definitions, allowing you to easily fund local nursing facilities, assisted living facilities, or informal caregivers anywhere in the world. International benefits give you the freedom to choose your ideal global lifestyle without sacrificing your long-term financial security or the quality of your future care.
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The Problem – Not All International Benefits Are the Same
While many Hybrid LTC policies include international benefits, their actual coverage parameters vary drastically from one carrier to another. Waiting until you need care to decipher your policy’s global limitations can be a costly mistake that can lead to denied claims and sudden out-of-pocket expenses. Reviewing these rules early, especially regarding cash payouts versus complex foreign receipt reimbursement, ensures your coverage works seamlessly when and where you need it most.
The Solution – Understand Your Policy’s International Benefits
Monthly Benefit Cap. Most Hybrid LTC policies have a monthly benefit limit (cap). For example: if you need $10,000 of care per month and your policy has a $6,000 monthly limit, the policy will pay $6,000. A policy with a 50% monthly cap on international care would pay 50% of your $6,000 monthly benefit, or $3,000. That could leave you with a $7,000 monthly out-of-pocket expense.
Total Number of Months Cap. Most Hybrid LTC policies have a benefit period. If your policy has a six-year benefit period and you use your maximum monthly benefit each month for six years, you will deplete your total LTC benefit. If your policy caps your international benefits at three years, only three of those six years can be used abroad. Once you receive three years of care abroad, you will no longer have access to your international benefits. If you return to the U.S., you can use the remainder of your benefits.
Reimbursement Versus Cash Indemnity Monthly Cap. Some Hybrid LTC policies are based on reimbursement, where they refund your care costs up to your monthly limit after you submit your receipts. Some Hybrid LTC policies are based on cash indemnity, where they pay your full monthly benefit directly to you in cash regardless of actual expenses, requiring no receipts. Some Hybrid LTC policies offer both reimbursement and cash indemnity, but place limits on cash indemnity benefits for care abroad.
Types of Care Limits for International Benefits. Most Hybrid LTC policies pay for care in your home, an assisted living facility and a nursing facility. Some Hybrid LTC policies prohibit informal care providers in your home, particularly if the care is provided by a family member. Some Hybrid LTC policies allow you to use formal care providers, including assisted living facilities and nursing facilities, and informal care providers, including family and friends. Since informal care providers can be much less costly than formal care providers, you can obtain significantly more care with a lower monthly benefit or stretch your benefits over more years.
The same policies that allow you to use informal home care providers in the U.S. may require you to use formal home care providers abroad. The same policies that allow you to use home care in the U.S. may require you to receive care in a facility when you are abroad.
Action Step – Compare International Benefits Before Purchasing Your Policy
International benefits can differ significantly between each insurance company’s policy. Work closely with an independent insurance expert to compare policies that meet your needs. Since premiums vary greatly based on age, health and marital status, request individualized quotes.
Aaron Skloff, Accredited Investment Fiduciary (AIF), Chartered Financial Analyst (CFA) charter holder, Master of Business Administration (MBA), is the Chief Executive Officer of Skloff Financial Group, a Registered Investment Advisory firm. The firm specializes in financial planning and investment management services for high net worth individuals and benefits for small to middle sized companies. He can be contacted at www.skloff.com or 908-464-3060.
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Frequently Asked Questions
Q: Do all Hybrid Life and LTC policies offer the same international benefits? No. There is no industry standard for international coverage. Some policies may provide full, worldwide coverage, others may offer limited or partial benefits for a specific duration, and some may exclude international care entirely. It is critical to review the specific contract language to understand the geographic limitations and the types of facilities that qualify for coverage.
Q: How does the cash indemnity benefit structure work in Nationwide CareMatters II? Unlike standard reimbursement policies that require you to submit monthly receipts and wait for approval up to your benefit cap, Nationwide CareMatters II is a cash indemnity policy. Once you qualify for a claim, Nationwide pays out your full monthly LTC benefit directly to you, regardless of your actual long-term care expenses. This removes the administrative hassle of tracking receipts and gives you complete autonomy over how you allocate your funds.
Q: Why is international coverage important for retirees? Retirees often choose to live or spend extended time abroad to take advantage of lower costs of living, favorable tax policies, or personal lifestyle preferences. Without an explicit provision for international care, a medical crisis or the need for chronic care while overseas could force you to pay for expensive services out-of-pocket, potentially depleting your retirement assets.
Q: What should I look for in a policy if I plan to live abroad? If you are planning to expatriate, seek out policies that offer full portability. You should specifically ask:
Does the policy cover care in the country where I plan to reside?
Are the benefits paid in U.S. dollars, or is there a risk of currency fluctuation?
What criteria must a foreign facility meet to be considered a “qualified provider” under the policy?
Q: If my domestic policy doesn’t cover international care, are there other options? Yes. If your current or prospective hybrid policy has limited international coverage, you may need to look at specialized international LTC policies designed specifically for expatriates. These are built for a global clientele and operate with different risk pools to ensure coverage follows you across borders, providing portability that most domestic-focused hybrid products lack.
Q: Can I rely on Medicare if I leave the U.S.? Generally, no. Medicare provides very limited, if any, coverage for long-term care, and its coverage effectively ends once you leave the United States. Relying on government health programs is not a viable strategy for financing long-term care needs abroad, making a private policy with confirmed international benefits a crucial safety net for your financial plan.
