Your Guide to Long-Term Care: Options, Costs, and What to Expect
Key Insights
- Long-term care includes home care, assisted living, and adult day programs that help individuals maintain independence as they age.
- The cost of care is rising rapidly, with annual expenses ranging from $60,000 to over $110,000, and most of these costs are not covered by Medicare.
- Planning early, ideally in your 50s or 60s, gives you more options and better rates for long-term care coverage before health issues limit eligibility.
- There are multiple ways to set aside funds for long-term care, each with distinct advantages and tradeoffs.
- Working with an advisor simplifies the process by helping clients align their care preferences, financial goals, and strategies to safeguard both their assets and independence.
When most of us picture retirement, we think of travel, hobbies, and time with loved ones; not doctor visits or daily care needs. But as we live longer, planning for long-term care (LTC) becomes one of the most important (and often overlooked) parts of financial security.
As an insurance advisor, I’ve seen firsthand how proper planning can protect families and how waiting too long can create financial and emotional stress. This guide breaks down what long-term care really means, what it costs, and the options available to help you prepare with confidence.
What Is Long-Term Care?
Long-term care refers to a range of services that help people with chronic illnesses, disabilities, or other conditions manage daily activities such as bathing, dressing, or eating. It’s not limited to nursing homes. In fact, most care begins at home or in assisted living facilities. Here are the most common types:
- Home care: Personal assistance or nursing support in your home
- Assisted living: A residential community offering support with daily activities
- Nursing home care: For more comprehensive medical and personal care
- Adult day care: Supervised programs offering social interaction and daytime care
The type of care you’ll need depends on your health, independence, and lifestyle preferences, but all come with significant costs to consider.
The Rising Cost of Care
Long-term care costs continue to climb every year. According to recent reports:
- Home health aide: ~$70,000 per year
- Assisted living facility: ~$60,000 per year
- Private nursing home room: Over $110,000 per year
And here’s the catch: Medicare typically doesn’t cover long-term custodial care—only short-term rehabilitation or medical services. Without a plan, these expenses can quickly deplete your retirement savings.
Your Long-Term Care Options
The first step in planning ahead for LTC is to understand your choices. Here are the most common solutions available today:
1. Traditional Long-Term Care Insurance
This is the most straightforward approach. You pay a premium, and the policy helps cover qualified care expenses if you need them.
Pros:
- Comprehensive coverage across care settings
- Helps protect retirement savings
- May qualify for state partnership benefits
Cons:
- Premiums can increase over time by class action with state approval.
- “Use it or lose it” — If you never need care, benefits don’t pay out.
2. Hybrid Life Insurance with LTC Benefits
A hybrid policy combines life insurance and long-term care coverage. If you never use the LTC benefits, your loved ones still receive a death benefit.
Pros:
- Guaranteed premiums
- You or your family receive a benefit either way.
- May have easier medical qualification
Cons:
- Higher upfront or ongoing cost
- Using LTC benefits reduces the death benefit.
3. Annuities with Long-Term Care Riders
If you already have assets set aside for retirement, certain annuities can double or triple their payout value when used for long-term care expenses.
Pros:
- Flexibility and potential for growth
- Can repurpose existing savings
- No “use it or lose it” structure
Cons:
- May offer less comprehensive coverage
- Best suited for specific financial goals
Read More: How Much Does LTCI Cost?
When Should You Start Planning?
Ideally, you should explore long-term care options in your early 50s to 60s, while you’re healthy enough to qualify and can lock in lower premiums. Waiting until you need care (or face health issues) can make coverage much more expensive or unavailable altogether.
What It’s Like to Work with an Advisor
When we sit down together, my process is simple and transparent. We’ll discuss:
- Your health and family history
- Your financial goals and retirement plans
- Your preferences for care: at home, assisted living, or otherwise
- Your budget and comfort level for premiums
From there, I’ll help you compare policy options from reputable carriers, walk you through the fine print, and design a plan tailored to your needs. My role is to make the complex topic of long-term care simple, personal, and stress-free.
Long-term care planning is more than just insurance; it’s about protecting your independence, your assets, and your loved ones. The truth is, none of us know what the future holds, but with the right plan in place, you can face it with confidence.
If you’d like to explore what kind of long-term care coverage fits your goals, I’d be happy to help. Let’s have a conversation—no pressure, just guidance.
Gary Reppen is Vice President of Headquarters Financial Group in Morristown, NJ, and a graduate of Fairleigh Dickinson University. He began his career with United HealthCare, gaining expertise in Medicare programs, before joining Headquarters Financial Group in 1998 to focus on the growing need for Long-Term Care Insurance. A CLTC designee, Gary is a frequent speaker on LTCI and offers top-rated financial products and strategies tailored to his clients’ needs.
