November 2024
Financial Planning

What Are My Options for Long-Term Care?

By Myra Alport, AFC®

There’s an undeniable reality that we can count on as time marches on - growing older means needing higher levels of health care as we age. It’s a topic that many of us would prefer to push aside, but it’s important to plan for long-term care just as we plan for retirement, a home purchase or college.

Long-term care is essential for many of us because we may need assistance with daily tasks or, in some cases, more intensive care. Medicare and health insurance don't cover most long-term care expenses, and relying solely on family can be a tough and often unsustainable ask.

According to the 2023 Genworth Cost of Care Survey, today’s average monthly cost of assisted living in the US is $5,350. The cost can vary widely depending on location, size, amenities and level of care. For memory and dementia care, costs are at least 20-30% higher.

Will you rely on your retirement nest egg and other savings to self-fund these costs or will you consider the up-front cost of long-term care insurance?

Let’s look further into the three main long-term care (LTC) insurance options:

Traditional long-term care insurance policies cover care expenses in your home or a facility. You can choose the amount and length of coverage and how long you must wait before the benefits begin. Typically, you pay an annual premium for life. These policies first became popular in the 1980s and the annual premiums have increased significantly.

Hybrid long-term care insurance policies combine long-term care coverage for extended care in your home or a facility along with a death benefit. If you never need LTC your beneficiaries will receive a life insurance payout after you pass away. Hybrid policies have become increasingly popular in recent years.

Life insurance with a long-term care rider allows you to use some of the life insurance’s death benefit for long-term care needs while you are still alive.

Creating a plan now, whether that’s looking into insurance options, setting up a financial cushion, or using the proceeds from selling your home means you’re taking control of what aging comfortably and confidently looks like for you. You’ll be able to breathe a little easier knowing that you’re covered, come what may. And that's peace of mind worth planning for.

We are here to help you navigate your options.

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