Long Term Care Planning

Long-term care planning guide

Long-term care planning guide

In this article

— Last Updated May 27, 2022

Read Time
4 mins
Reviewed by
Eric Berkman

Guide Long-term care planning guide

— Last Updated May 27, 2022

Stephanie Wilson

Director of Operations


Reviewed by

Eric Berkman

Taking care of one’s long-term care needs is an essential part of retirement planning. In some way or another, most people have dealt with family members or friends who need long-term care. It is evident from these incidents that long-term care can be costly and emotionally draining for a family.

Long-term care insurance can protect your retirement savings and give you peace of mind that you can afford long-term care if needed. A long-term care plan will spare your family members the burden of caring for you and allow you to decide where to receive necessary medical attention as you age.

Choosing the right long-term care option for you

Individuals unable to care for themselves or need assistance with activities of daily living may require long-term care, which includes a variety of assistance programs. Individuals with physical or cognitive impairments receive long-term care, including personal care, social services, and medical care.

Providing long-term care can be temporary, such as for a handful of weeks or months, when a patient recovers from a disabling disease or medical event, or permanent for patients with chronic health issues.

Nursing homes is often the first thing that comes to mind when considering long-term care. However,  there are other long-term care options are available. Understanding the different facilities, the type of care you will need, and providers can help you make the right decision. So what options do you have?

Nursing home care

Residents of nursing homes receive round-the-clock care for the needs of those who are unable to live independently. Nursing homes offer specialized medical care to seniors with serious illnesses or injuries. 

Specially trained staff assist residents with daily tasks, such as eating, bathing, laundry, and cleaning. Depending on their experience, they can provide intermediate, long-term skilled nursing care, or short-term or acute nursing care.

Assisted living facilities

Assisted living facilities are a fantastic option for seniors who prefer not to receive round-the-clock care but need assistance with everyday tasks. A third-party organization provides various services, including lodging, food, case management, and professional care. Under this program, Medicaid, Supplemental Security Income (SSI), and home assistance recipients are all eligible to receive benefits.

Adult daycare facilities

Adult daycare offers seniors a refreshing change of scenery while caregivers are given a break. Programs for adult day care can be based on a social approach or a medical model. The focus of medical programs may be on treatments such as dialysis, ventilation, and rehabilitation, while social programs may offer companionship, hobbies, or other unique interests.

Community-based care

The continuing care communities include nursing homes and assisted living facilities on the same site. Residents can age in place or transition from one level of care to another as their needs change. Moving into a nursing home is easier for patients if they can stay in their familiar surroundings. It may be necessary to pay a one-time fee or purchase an annuity followed by ongoing monthly payments to cover services, benefits, and medical expenses.

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Consider the cost of care

A long-term care plan goes beyond deciding what kind of assistance you or a loved one may need. Your future care costs will be determined depending on your current financial situation and the type of care you require.

Health insurance like Medicare will not pay for long-term care unless you need short-term nursing or hospitalization.

You can, however, finance long-term care in other ways such as,

  • Paying out of pocket for your long-term care costs
  • Choosing your own treatment method: patient-centered care
  • Making the right decision about medical care
  • Identifying service providers
  • Getting help from family and friends

Ways to pay for long-term care

Additionally, long-term care can be paid for in several ways.

Long-term care insurance

LTCIs are becoming increasingly popular for covering all or part of treatment. The inability to perform two daily activities, such as bathing and dressing, is often required before insurance benefits can be paid. How much you pay for long-term care insurance depends on several factors, including your age, gender, health, and coverage preferences—a life insurance policy’s premium increases as its prospective owner ages. 

Reverse Mortgages

With the help of a reverse mortgage, homeowners 62 and older can use the equity in their homes as a source of funds for long-term care and other expenses. It is imperative to do thorough research before choosing a lender since the costs and complexities may vary significantly. Financiers argue that reverse mortgages should only be used as a last resort.


Long-term care annuities help cover the high cost of providing care for a prolonged period of time. Insurance companies offer annuities in exchange for a lump sum or series of payments, and they can be immediate or delayed.

Life Insurance

You can add long-term care riders to your current policy or buy new policies with this feature. The cost of a long-term care insurance rider can vary widely between insurance providers, and long-term care services can be paid for using a rider while you are still alive.


Medicaid covers long-term care expenses, but only for those with limited financial resources. To qualify for Medicaid in any given state, you must first meet specific requirements. The program’s long-term care benefits are low if you meet the requirements. In some cases, Medicaid isn’t accepted by hospitals or clinics.


What are long-term care exclusions?

Mental illness, alcoholism, substance abuse, and intentional self-harm are often the most common exclusions in long-term care insurance policies. However, the policy cannot exclude or limit coverage for Alzheimer’s disease, senile dementia, or organic brain disease.

What is the best candidate for a long-term care policy?

Long-term care insurance is perfect for people over 50 in good health. Simply put, the cost will go up if you wait. Getting long-term care insurance early is especially important if you have chronic health problems.

What is the basis for most long-term care benefits?

Benefits are usually provided on a reimbursement basis, meaning you receive payment after receiving eligible care or paying for approved expenses.

Final Thoughts

Long-term care is a difficult realization to come to terms with. The sooner you prepare for your long-term care needs, the better your chances of saving money, reducing stress, and making other arrangements. Investing in long-term care as early as possible will increase your chances of securing your retirement funds and the people most important to you.

Stephanie Wilson


December 21, 2022

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