My parents are getting quotes to replace a 30 YO oil fired boiler that
has a small "add-on" hot water tank. He is looking into getting a gas
fired unit so that he can replace his very old electric stove with a
gas range.

AC is not part of the equation because he already has a separate
central air system.

They live in Western Massachusetts in a brick house that is not well
insulated.

Another factor to consider is that it's just the two of them, except
for a few times a year when the rest of us visit. During these visits
there could be up to 14 people in the house for 3 - 4 days. During
these visits, both showers are in use at the same time, lots of dishes
get done, etc.

I know next to nothing about boilers, so this is the best I can do to
describe their current system:

They have a thermostat that controls the boiler for the baseboard hot
water radiators and a timer switch that controls the same boiler for
the hot water tank. There is a large (1”?) pipe that runs through the
hot water tank, so I assume that the water is heated via heat transfer
from this pipe. The tank is not directly fired.

The timer has a "Hold" position so that they never run out of hot
water when the house is full of guests. The boiler does not run
constantly when the timer is set to hold, so obviously there must be a
thermostat associated with hot water tank also.

OK, so here are the options he’s been given via a few quotes:

1 – A combo unit that will include a water heater built into the
boiler.
2 – A boiler just for heat and a separate 40 gallon water heater.

BTW…no one has suggested an instant water heater in any of the quotes,
but my dad and I discussed it and he feels the expense would not be
worth it, considering their age. He’d like to do what’s best for the
house as far as resale value, but the extra cost of the instant water
heater doesn’t seem to make sense.

The other issue is the efficiency of his choices. The quotes he has
received so far are for 85% efficiencies, but the rebates from his
utility don’t start until the units hit the 90%+ range.

So my main questions are these:

Which makes more sense in this situation:

1 - A combo unit or a boiler and separate water heater?
2 – 85% efficiency or a higher efficiency with the rebate offsets? The
rebates seem to be in the range of $1000 - $1200 but I don’t know how
much more a 90%+ boiler would cost.

Thanks for any thoughts you have on this matter.