What is Long-Term Care Insurance?

Understanding how long-term care insurance plays a role in estate planning

Estate planning is far more than putting together a trust and a will, there are many financial tools and preparations that need to be put in place to work in unison with your legal documentation. One of these tools is long-term care insurance. The U.S. Department of Health and Human Services estimates that 70% of people over the age of 65 will need some form of long-term care during their lifetime. In this piece, we’ll dive into long-term care insurance, explain what exactly it is and how it plays an important role in your estate planning.

What is long-term care?

If you need help carrying out daily activities like dressing, eating, bathing, or using the restroom, and if there’s no sign that this will improve, you probably need long-term care. Aging and chronic illness are the main reasons most people need this type of extended care, which can take place either in the home with a caregiver, or at an assisted living facility.

How much does it cost?

Long-term care is not cheap. A survey from Genworth showed that the national median expense of a private nursing home was $91,250 per year. That number has increased by about 4% each year over the past five years. Delivered in the home, health care can run upwards of $20,000 per year. Facilities that fall between a nursing home and home care, like assisted living, cost about $25,000 per year, or much more if additional services are needed.

Long-term care insurance

Most health insurance plans only cover long-term care for a short period of time. Medicare offers limited coverage after hospitalization, but only for up to 100 days. If you don’t have private assets that will cover the cost of care, you should look into long-term care insurance. Long-term care insurance can be hard to find and expensive, mainly because people are living longer and require more care for extended periods of time. Premiums for long-term care insurance for a 60-year old couple can range from $1,685 to $2,813 per year, according to the American Association for Long-Term Care Insurance. That provides about $164,000 for each person. It’s a good idea to start looking into long-term care insurance between age 60 and 65, as the older you get the harder it is to obtain.


Longer life expectancies mean you can enjoy your children, grandchildren, and so much more for years past retirement.  It also means you might have to spend a few years getting assistance in a nursing home or from a caregiver. If you don’t have the personal assets to cover any long-term care needs that might come up, look into long-term care insurance to cover things not covered by normal health insurance, Medicare, or Medicaid. Want to discuss some of your long-term care insurance options? Reach out to one of our estate planning attorneys. We can help you understand how this type of insurance will work into your entire estate plan.

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