It may not be especially nice to think about, but the fact is that as we all keep living longer, our likelihood of requiring long-term care is increasing, too. What that care looks like and how long we need it for are, of course, unique to every individual. But what’s true for many of us is that, financially speaking at least, we’re not as prepared as we could be.
A recent survey by LIMRA revealed that although 29% of respondents believed they owned some form of long-term care insurance coverage, the true figure was closer to 3%. A OneAmerica study also found that while 29% of consumers researched long-term care plans, only 16% went on to actually implement one.
So, if you haven’t yet started your own financial preparations for long-term care, you’re certainly not alone. And the good news is it’s not too late either. Here are five steps you can take today to get your long-term care planning on track.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. Check out the National Association of Insurance Commissioners’ (NAIC) Shoppers Guide for Long-Term Care Insurance.
It’s free to download in both English and Spanish and completely product- and company-agnostic. It therefore offers you an unbiased frame of reference to use when thinking about long-term care coverage.
2. Communicate your plans with your loved ones.
Whether it’s a family member, relative or close friend, be sure to discuss your plans for long-term care with the people closest to you. In particular, think about the role everyone can have — one that makes them feel involved but also plays to their strengths.
For example, maybe your spouse will oversee actually paying your care bills, but one of your kids or a close friend is going to visit you every day for a coffee and a chat.
Be sure to regularly check that you have the right people named as beneficiaries and/or with access rights for your insurance contracts, too.
3. Figure out if you can self-fund.
As an American citizen, you’re entitled to long-term care that is paid for by the government. However, as you might expect, the standard of care in a public Medicaid facility can be quite different to what you may receive if you pay to go private.
Review your finances and, if you’re in a position to self-fund, start actively preparing to do so now.
4. Find the right saving option for you.
If you’re going to self-fund, there are a few different ways to go about it.
- Standalone long-term care insurance. The premiums for these plans tend to be cheaper than for hybrid ones (more on those in a moment). However, they can be used only to fund long-term care, so if you don’t end up needing it, the money is essentially lost. (Some standalone products allow spouses to be covered by the same contract, increasing the chances that one of you will use it.) The reimbursement rules can also be challenging from a liquidity perspective, as they require you to pay for the care yourself, then submit receipts to recover the cost.
- A life insurance contract that contains a long-term care rider. These cover both your life insurance and long-term care benefit in a single plan. Consequently, the premiums are more expensive than a standalone product, but the upside is that if you don’t end up using the money for long-term care, it’s simply passed on to your stated beneficiaries when you die. If the rider is used, it is paid out as an acceleration of the death benefit until either the benefit amount is exhausted or upon your death.
- Create your own “long-term care bucket.” Rather than paying for insurance coverage, you could use some other investment program or annuity contract to save for long-term care. Over time, such funds can grow considerably without any restrictions on how you use the money. However, you’ll need enough liquidity (and discipline!) to ensure you pay into the fund regularly for a number of years. Plus, unlike with most standalone or hybrid insurance policies, any funds you accrue won’t be covered by state level asset protection programs, known as partnership policies.
5. Consult a professional.
Selecting the right insurance coverage or savings plan from the various options available can be a complicated process. A qualified financial professional will help you sort through the details, make the complex simple and assist you in determining the approach that works for you. They can also help you integrate long-term care preparations into your overall financial plan.
Whatever the right long-term care plan for you, the most important thing is to have one. The sooner the better, too, because the earlier you start saving, the bigger your pot will be if and when the time comes.
Sadly, none of us can escape getting older. But by taking these steps today, you can ensure that both you and your budget are as prepared for tomorrow as possible.
This article has been obtained from an outside source and is provided as a courtesy by Stephen B. Dunbar III, JD, CLU, Executive Vice President of the Georgia Alabama Gulf Coast Branch, Equitable Advisors and Equitable Network do not legal or tax advice and make no representation as to the accuracy or completeness of this information. You should consult your own legal and tax advisors regarding your particular circumstances.
Stephen Dunbar offers securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC (Equitable Financial Advisors in MI & TN). Annuity and insurance products offered through Equitable Network, LLC. Equitable Network conducts business in CA as Equitable Network Insurance Agency of California, LLC, in UT as Equitable Network Insurance Agency of Utah, LLC, in PR as Equitable Network of Puerto Rico, Inc. AGE- 5489036.1(3/23)(Exp.3/25)
-
You Don't Have to Be Wealthy to Need a Wealth ManagerNavigating complex financial decisions is hard on your own, no matter how much money you have. A wealth manager can provide comprehensive financial planning, investment management, risk management and more.
-
Despite Tariffs, These Investment Experts Are Bullish on European EquitiesEuropean equities were one of the better-performing investments during the first half of 2025. They could be a good long-term prospect for U.S. investors needing to diversify, according to these investment managers.
-
How Do You Know You Are Ready for a Gray Divorce? 15 Yes-or-No QuestionsAs people 50 and older get more gray divorces, many splits are initiated by women who want a new path. Answer these 15 questions to see if you might need to think about how you should move forward.
-
'Buy Now, Pay Later' for Everyday Spending? This Financial Pro Thinks It's Risky'Buy Now, Pay Later' apps can get you out of a jam when you need money quickly. But using them regularly for small purchases could create problems.
-
Five Things to Consider Before Rolling Your 401(k) into a Roth IRAConverting at least some of an old 401(k) to a Roth IRA can offer long-term tax benefits and retirement flexibility, especially if you anticipate being in a higher tax bracket later or wish to leave a tax-free legacy.
-
From Dream Apartment to Nightmare: When Your Landlord Evicts You Through No Fault of Your OwnThis is what I suggested a tenant do to get out of her lease after her landlord's inexperience and lack of action made her rental situation unsafe. It's a legal situation called 'constructive eviction.'
-
Six Steps to Being Empowered and On Track: An Expert Financial Guide for WomenWhile most female investors feel on track with their financial goals and empowered by managing their investments, many regret not starting sooner. Here's how you can get started and take control of your financial future.
-
Selling Your Business? This Powerful Insurance Option Unlocks Multigenerational WealthPrivate placement life insurance (PPLI) offers almost unbelievable investment flexibility, estate planning and tax advantages. And it's completely legit.
