The word hybrid means composite formed by mixed origins, in which the differing components all perform somewhat the same function. In hybrid annuities, buyers can use the differing components of fixed and variable accounts to allocate funds within one annuity. The results is an annuity that has part of it with a guaranteed return, along with the potential for a higher return (or loss) from the variable component.
The term Hybrid Annuities usually refers to a combination Annuity/Long Term Care policy.
This policy guarantees that your funds will grow at a certain rate. It also guarantees a certain LTC benefit depending on the year it is used.
Many people like this option because it allows you to use the cash if you need it for income or expenses (they do not have to be related to LTC needs). But at the same time if you have a LTC need you have a LTC benefit that is much higher than the cash value.
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This policy guarantees that your funds will grow at a certain rate. It also guarantees a certain LTC benefit depending on the year it is used.
Many people like this option because it allows you to use the cash if you need it for income or expenses (they do not have to be related to LTC needs). But at the same time if you have a LTC need you have a LTC benefit that is much higher than the cash value.