In 2026, long-term care (LTC) riders have become a primary solution for the "use-it-or-lose-it" drawback of traditional insurance. By attaching these riders to Fixed Index Annuities (FIAs) or Multi-Year Guaranteed Annuities (MYGAs), you can protect your principal while gaining leveraged access to funds for healthcare.

Here is how these strategies break down for the current market.

1. LTC Riders in Fixed Index Annuities (FIAs)

In the FIA category, these are often marketed as "Income Doublers" or Enhanced Benefit Riders. They are designed for retirees who want a guaranteed stream of income that can "flex" upward if health fails.

  • How it Works: You typically pay an annual fee (averaging 0.90% to 1.15%) to maintain the rider. If you are certified by a doctor as unable to perform 2 of 6 Activities of Daily Living (ADLs), your monthly income check doubles.

  • The Math: A $2,000 monthly lifetime payment would jump to **$4,000 per month** once care is triggered.

  • Duration: Most carriers provide this doubled benefit for a maximum of 5 years or until the cash value is exhausted, at which point the payment typically reverts to the original amount for life.

  • Underwriting: Unlike traditional LTC insurance, these riders use "Simplified Underwriting," which usually involves a health questionnaire rather than a physical exam or blood work.

2. LTC Riders in MYGAs (Fixed Annuities)

In a standard MYGA, the "rider" is usually a built-in feature providing liquidity rather than income leverage.

  • The Benefit: Some MYGAs can include a Confinement Rider or Terminal Illness Waiver. If you are moved to a nursing home, the insurance company waives all surrender charges, allowing you to withdraw 100% of your money penalty-free.

  • The "Hybrid" Exception: True hybrid annuities like Global Atlantic’s ForeCare offer significantly more power. Instead of just giving you your own money back, they provide a 2x or 3x multiplier. A $100,000 deposit could create a **$300,000 pool** specifically for LTC expenses.

  • Tax Advantage: Under the Pension Protection Act (PPA), distributions from these hybrid pools for qualified LTC expenses are often 100% tax-free. Consult with your tax advisor to confirm.

Comparison at a Glance

Feature Fixed Index Annuity (FIA) MYGA (Fixed Annuity)
Primary Benefit Income Doubler: Your monthly check doubles for care. Liquidity: Penalty-free access to your full balance.
Leverage High (e.g., $2k becomes $4k). Usually Low (unless using a Hybrid).
Cost Usually an annual fee (~1%). Usually built-in for free if included.
Trigger 2 of 6 ADLs or Cognitive Impairment. Nursing home stay or Terminal Illness.

Which one is right for you?

  • Choose the FIA Rider if you want a "pension" that scales. This is ideal for those who need a base retirement income but want a built-in hedge against the high cost of home health care or assisted living.

  • Choose the MYGA Rider if you want the highest possible guaranteed interest rate but need the "emergency exit" of being able to liquidate your principal without penalty if a health crisis occurs.