Preparing Today to Protect Tomorrow: Planning for Long-Term Care

Key Takeaways:

• Roughly 70% of adults over age 65 will need some form of long-term care, and traditional health insurance or Medicare often covers very little of the cost.
• Long-term care insurance can help protect retirement savings, preserve independence, and reduce the caregiving burden on family members.
• The best time to consider purchasing coverage is in your 50s or early 60s, when premiums are more affordable and you’re more likely to qualify.
• Planning ahead (both financially and emotionally) ensures your wishes are honored and provides peace of mind for you and your loved ones.

The phone call came at 2 a.m. Sarah’s 85-year-old mother had fallen in her bathroom and couldn’t get up. What started as a simple emergency room visit turned into a long journey through rehabilitation, assisted living, and eventually full-time care.

Like many families, Sarah discovered Medicare covered very little of her mother’s long-term care needs, leaving the family to navigate both the emotional challenges of caring for a loved one and the financial reality that care costs thousands of dollars each month.

This scenario happens frequently for families. Statistics show that 70% of adults who reach age 65 will need some form of long-term care during their lifetime.^[i] Yet many families remain unprepared for both the emotional and financial impact of these needs.

Understanding the Reality of Long-Term Care

Long-term care encompasses a wide range of services designed to help people who can no longer perform basic daily activities independently. This might include help with bathing, dressing, eating, or simply moving around safely. Care can be provided in their own home, an assisted living community, or skilled nursing facility.

The challenge many families face is that traditional health insurance provides limited coverage for long-term care services. Medicare typically covers only short-term skilled nursing care following a hospital stay, leaving families responsible for the majority of long-term care costs.

This gap in coverage is where long-term care insurance becomes invaluable. It’s designed specifically to help cover costs that other insurance won’t, providing financial protection when you or a loved one needs extended care.

Why Consider Long-Term Care Insurance?

The decision to purchase long-term care insurance can be daunting, so it’s important to carefully review your situation. The price tag is often high, but there are many benefits including protecting your family’s financial security, preserving your loved one’s independence, and maintaining close relationships during challenging times. While purchasing this type of insurance isn’t for everyone, there are some benefits to consider:

• Financial protection for your family. The primary benefit of long-term care insurance is financial protection. Without coverage, costs can quickly deplete retirement savings and place a significant burden on family finances—especially when the annual cost of care can exceed six figures.

Long-term care insurance helps bridge the gap by providing a daily or monthly benefit that the policy owner can use toward qualified care expenses. This protection allows families to focus on providing the best possible care for their loved ones rather than worrying about how to pay for it.

• Maintaining independence and choice. Having long-term care insurance often means families have more options for where and how care is provided, and they can make decisions based on what’s best for their loved one rather than cost. Insurance coverage can enable someone to remain in their home longer with professional assistance, or they might be able to choose a higher-quality care facility that might otherwise be financially out of reach.
• Preserving family relationships. When families are forced to provide all of the care themselves due to financial constraints, it can strain relationships and impact the caregiver’s own health and well-being. Long-term care insurance can help preserve the family dynamics by covering professional care when needed, allowing family members to focus on emotional support and quality time rather than physical caregiving.

When Should You Consider Purchasing Coverage?

The best time to purchase long-term care insurance is in your 50s or early 60s, when you’re (hopefully) healthy enough to qualify for coverage and young enough to secure more affordable premiums. Waiting too long can result in higher costs or potential denial of coverage due to health issues.

The application process typically involves health questions, medical records review, and sometimes an interview by phone or in person. Insurance companies are selective about who they accept, making it crucial to apply while you’re in good health.

Making the decision of whether or not to buy long-term care insurance is based on a number of factors, including:

• Your family history. If your parents or grandparents required long-term care or lived very long lives, you may have a higher likelihood of needing care yourself.
• Your financial situation. Long-term care insurance makes the most sense for people who have enough assets to protect but not enough to pay for extended care entirely out of pocket. It can also help ease the financial and administrative burden of managing or paying for your care. However, if you have substantial wealth, then you might choose to self-insure rather than pay premiums. If you find that your assets become depleted from paying for care or have minimal assets to begin with, you may qualify for Medicaid assistance.

Another popular option to pay for long-term care expenses is to add on a long-term care rider to an existing annuity or permanent life insurance policy. In recent years, many families have gravitated toward hybrid insurance solutions that combine permanent life insurance with a long-term care rider. This approach provides flexibility—offering protection whether long-term care is needed or not. This reflects a desire for efficiency and value, as policyholders appreciate the ability to leverage one product for both legacy planning and potential care needs later in life.

• Your support system. Consider your family situation. Do you have children or other family members/friends who could potentially provide care? Are they geographically close? Are they natural caregivers or will the act of providing assistance create burnout and resentment? While family support is valuable, professional care is often necessary for maintaining physical and emotional safety for both the recipient and their family members.

Things to Know When Choosing Coverage

Not every long-term care insurance plan is built the same. Policies differ in how much they provide in benefits or charge in premiums. You’ll typically choose a daily benefit amount (often $100-$300 per day) and a benefit period (commonly 2-5 years). Some policies even offer lifetime benefits, though these are becoming less common and more expensive.

Premiums vary significantly based on age, health, location, and the selected coverage. Generally, women pay more than men due to longer life expectancy and a higher likelihood of needing care. Single individuals may also pay higher premiums, as they may not have a spouse to assist when the time comes.

Many policies also include inflation protection, which increases your benefits over time to keep pace with rising medical and care costs. While this feature increases premiums, it can be crucial for maintaining adequate coverage as you age. A common feature offered today that can help extend benefits is a shared care rider. This rider allows couples to combine their separate long-term care insurance policies so one partner can access the other’s benefits if their own are exhausted.

Premiums may seem expensive—but they pale in comparison to the potential cost of care. A policy costing $3,000 annually could provide hundreds of thousands of dollars in benefits, especially if the care extends over multiple years.

The Emotional Side of Planning

One of the most challenging aspects of long-term care planning is having honest conversations between family members about preferences and expectations. These discussions should happen while everyone is healthy and can think clearly about their wishes.

Consider discussing questions like: Where would you prefer to receive care if needed? Who would you want making decisions if you couldn’t? What are your biggest concerns about aging? What role would you want your family to play in your future care?

Planning ahead demonstrates love and consideration for those who may one day need to make decisions about your care. It removes the stress of guesswork during emotionally difficult times and ensures your wishes are known and respected. It also allows adult children to follow God’s instruction to “honor your father and mother” by ensuring dignity, quality of life, and peace of mind for the family.

Taking Action

If you’re thinking about adding long-term care insurance to your estate plan, here are the steps we recommend:

1. Evaluate your situation. Start by honestly assessing your health, family history, financial resources, and support system. Think about what kind of care you would want and where you would want to receive it.
2. Seek professional guidance. Given the complexity of long-term insurance, consider working with a financial advisor who specializes in retirement and long-term care planning. They can help you explore whether insurance is right for you, find and evaluate the options, and guide you through the application process.
3. Don’t wait too long. If you’re considering long-term care insurance, don’t delay the decision. Health issues can develop quickly and unexpectedly, potentially making you uninsurable. Even if you’re not ready to purchase a policy immediately, begin the research and evaluation process while you have time to make an informed decision.

Finding Peace in Preparation

Planning for long-term care allows families to prepare for one of life’s most challenging seasons. While we can’t predict exactly what the future holds, we can take steps today to ensure we’re prepared for whatever tomorrow holds.

The goal isn’t to eliminate all uncertainty but to create a foundation of security that allows families to focus on what matters most: caring for each other with love, respect, and dignity. Whether through insurance, savings, or other planning strategies, taking action today can provide peace of mind for years to come.

Our team is here to guide you through every step of your journey, helping you find peace of mind for the future while ensuring your goals are within reach. Don’t hesitate to contact us today to start planning for tomorrow at info@bluetrust.com or call us at 800.841.0362.

 

Related Resources:

• Retirement Checklist: Are You Ready for Retirement?
• Women Face Unique Financial Planning Challenges
• Seasons of Marriage & Money: Adult Children, Grandkids, & In-Laws

 

Sources:

^[i] National Council on Aging. www.ncoa.org/article/when-should-you-start-investing-in-long-term-care-insurance/