Year-End Financial To-Do: Make a Plan for Long-Term Care

Nov 22, 2022

By Dan Schulte, Senior Vice President and Manager, Annuities and Insurance
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November is Long-Term Care Awareness Month which means it could be the perfect time to start having planning discussions with family members over the holidays. An open and honest discussion about long-term care is the first step in developing a plan that works for you as well as your family and friends. Even with this reality, often individuals fail to plan with regard to their own potential long-term needs due to some common misconceptions. Let’s take a look at a few:

“I won’t need long-term care.” People tend to downplay their personal risk of needing care, but the chances are good an individual will need care. According to the U.S. Department of Health and Human Services, 70% of people aged 65 and over will need long-term care services at some point in their lives.

“My health insurance will cover long-term care.” Unlike medical care, long-term care consists of assistance with everyday tasks, including eating, dressing, bathing, using the toilet, helping with incontinence, and moving to and from a bed or a chair. Long-term care assistance can also include housework, cooking, administering medications, grocery shopping, and managing money.  In retirement, Medicare only provides a limited amount of care. Additionally, qualifying for the state long-term care program (Medicaid) will typically require an individual becoming impoverished, which most people would like to avoid.

“I’ll be able to afford the care with my savings.” Many Americans significantly underestimate the costs of long-term care. A home health aide, which includes “hands-on” personal assistance with activities such as bathing, dressing, and eating, has an annual median cost of over $60,000.*  The national annual median cost of a private room in a nursing home now exceeds $100,000 annually.*

“My family will be able to take care of me.”  While caregiving is very noble, long-term care can involve some of the most intimate aspects of daily living, and many feel they’re incapable of providing the care a loved one would need. A recent survey indicates more than 78% of Aericans worry they would not be able to provide adequate care if someone in their family needed it.**

 “I can’t afford long term care insurance.” The costs of long-term care insurance can be designed as part of a comprehensive financial plan that can fit in your budget. The younger the age of purchase the more affordable the premiums.

An open and honest discussion about long-term care is the first step in developing a plan that works for you as well as your family and friends. There are a variety of LTC planning issues and insurance options to consider. Contact your financial advisor for help with evaluating your situation and developing a plan based on your current assets, health situation, family dynamics, and cost-of-care in your area.


*2021 Genworth Cost of Care Survey

**VerstaResearch, “2020 LTC Marketing and Thought Leadership Research, Findings from Surveys of Advisors and Consumers,” October 2020.