With very few exceptions, it's a fallacy to assume your children, the government, or your savings will reliably provide appropriate long-term care if you need it.
Your children may say they are willing to help now, but circumstances change: they may be raising children, paying for college, building careers, facing job loss, or managing divorce, and many families find the physical and emotional burden of caregiving heavier than anticipated.
Medicaid has strict asset limits, which usually means spending down savings before qualifying, and it imposes rules about how funds were spent. If you qualify, Medicaid can limit your choice of providers and services. Medicare covers acute medical care, not most custodial long-term care.
Savings are an option, but long-term care can cost thousands per month, and retirement assets may not last.
Because children, government programs, and personal savings often are insufficient, many experts recommend purchasing long-term care coverage to help protect your options and estate.
A Long-Term Care policy can provide funds for care when needed, reduce the financial and emotional burden on family caregivers, help preserve your estate for heirs, and increase the chance you can remain at home. For more on planning and estate considerations, see Planning for Long-Term Care and Estate Management.
Paying premiums may feel like an extra bill, but many find the protection worthwhile. Learn more about policy options and how they interact with estate planning at Long Term Care and Estate Planning Insurance.
Ways to pay premiums
- Your children might help pay premiums rather than provide full-time unpaid care or forfeit an inheritance.
- You might tap home equity through a reverse mortgage or line of credit.
- You might reduce retirement account contributions and reallocate those funds to premiums.
- You might choose a combined life insurance and long-term care policy that accelerates the death benefit if care is needed, reducing the eventual death benefit by the amount paid for care.
Keep in mind that the older you are, the harder and more expensive it can be to obtain a Long-Term Care policy, and delaying coverage can limit your options and the ability to leave an inheritance.
If you want personalized help evaluating options and costs, talk to an agent.
Frequently Asked Questions
What is long-term care insurance for?
It helps cover the cost of long-term services such as in-home care, assisted living, or nursing home care that are not generally paid by Medicare.
Will Medicaid pay for my long-term care immediately?
Medicaid can pay for long-term care only after you meet strict asset and income rules, which often requires spending down savings and following look-back rules.
Can life insurance help pay for long-term care?
Some life policies include long-term care riders that accelerate the death benefit to pay for care, which reduces the amount left to beneficiaries.
When should I buy long-term care insurance?
Buying earlier—while you are healthy—usually gives you more options and lower premiums, but individual timing depends on health, finances, and family situation.