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Aging & care · 9 min read
How to plan for long-term care before you need it
Most of us will need help with daily life at some point. Planning early keeps more choices open.
Short answer: about 70% of people turning 65 are likely to need some long-term care, for about three years on average. Medicare pays little of it, so families plan with savings, long-term care or hybrid insurance, living benefits riders, or Medicaid as a last resort.
What long-term care means
Long-term care is help with everyday activities when you cannot do them yourself because of age, illness, injury, or memory loss. It is usually not medical treatment. Insurers often measure need using six activities of daily living:
- Bathing
- Dressing
- Eating
- Toileting
- Continence
- Moving from a bed or chair (transferring)
Needing help with two of the six, or having severe cognitive impairment, is a common trigger for benefits.
How likely you are to need it
According to the federal government's long-term care resource, about 70% of people turning 65 will likely need some long-term care services, and about one-third may never need them. Women need care longer on average (3.7 years) than men (2.2 years).
Where care happens
| Setting | What it is | Relative cost |
|---|---|---|
| At home | Family or a paid aide helps with daily tasks | Lower to moderate |
| Adult day care | Daytime supervision and activities | Lower |
| Assisted living | Housing with personal care | Moderate to high |
| Nursing home | 24-hour skilled and personal care | Highest |
Costs vary widely by state and city. For current local prices, see the Genworth / CareScout Cost of Care Survey.
What Medicare and Medicaid cover
- Medicare does not pay for ongoing custodial care. It covers limited skilled nursing or rehab after a qualifying hospital stay, for a short period.
- Medicaid does pay for long-term care, but only after you have spent most of your assets, under strict rules that vary by state.
- Health insurance and disability insurance generally do not cover custodial care.
Ways families pay for care
| Option | How it works | Watch for |
|---|---|---|
| Personal savings | Pay as you go | Can drain retirement savings quickly |
| Traditional long-term care insurance | Pays a daily or monthly benefit for care | Premiums can rise; benefits unused if never needed |
| Hybrid life + LTC policy | Life insurance or annuity with a long-term care benefit | Higher upfront cost; leaves a benefit either way |
| Living benefits riders | Advance part of a life policy's death benefit for chronic illness | Smaller benefit; reduces death benefit |
| Annuity waivers | Many annuities waive surrender charges for nursing home stays | Access, not extra money |
| Medicaid | Pays after assets are spent down | Limits choice of care; strict look-back rules |
Agent tip: A chronic illness rider on a term or IUL policy is one of the lowest-cost ways to add some care protection, because you are often buying life insurance anyway.
A simple plan to start
- Talk with your family about where you would want care.
- Sign a durable power of attorney and a health care directive.
- Check what your life insurance and annuities already include.
- Decide how much of a care need you want insured versus paid from savings.
- Revisit the plan every few years, especially after 55.
What we do and do not offer
TrueFin Services offers life insurance and annuities, including policies with living benefits riders and annuities with care-related waivers. We do not currently sell standalone long-term care insurance; we are happy to explain options and point you to a specialist.
Sources
Questions
Does Medicare pay for a nursing home?
Only for a limited skilled nursing stay after a qualifying hospital stay. It does not pay for long-term custodial care.
When should I start planning?
Many people start in their 50s, when coverage is easier to qualify for and costs less. It is never too early to sign a power of attorney and health care directive.
Is long-term care insurance worth it?
It depends on your savings, health, family support, and how much risk you want to carry. Hybrid policies and living benefits riders are alternatives worth comparing.
Sources and further reading
- National Association of Insurance Commissioners (NAIC): consumer guides to life insurance and annuities
- Virginia State Corporation Commission, Bureau of Insurance: verify an agent's license
- AM Best: insurer financial strength ratings
- IRS: tax rules for life insurance and annuities
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