Long Term Care: The Overlooked Threat to Financial Security

When it comes to financial planning, most people focus on saving for retirement, building wealth, or protecting their family with life insurance. Yet, one of the greatest threats to your financial security is often ignored, long-term care.

I have seen firsthand the devastating effects that long-term care needs can have on a family. With over a decade of experience in long-term care planning, and as a caregiver for my own mother, I can tell you, the financial, emotional, and physical burden is far greater than most people imagine. No spreadsheet, no report, no insurance brochure truly captures it until you live it.

Caregiving is relentless. It tests every aspect of your patience, your health, and your finances. And while I’m honored to care for my mother, it has shown me clearer than ever how critical it is to plan ahead, not just for ourselves, but for those who may one day have to care for us.

The Financial Reality of Long-Term Care

Long-term care isn’t just "nursing home" care. It includes in-home care, assisted living, memory care, and adult day care services. And the costs are staggering:

• The national average for a private room in a nursing home is now over $100,000 per year.

• Assisted living facilities average around $60,000 a year, depending on location and services.

• Home health aides cost roughly $30 to $40 an hour, which adds up quickly even at part-time hours.

  
  

Most people assume that Medicare will pick up the tab, it doesn’t. Medicare only covers very limited, short-term care after a hospital stay. Medicaid might help, but only once you’ve spent down almost all of your assets.

Without proper planning, families often find themselves draining retirement accounts, selling homes, or placing a heavy financial burden on their children just to pay for necessary care.

Why It’s Often Overlooked in Financial Planning

In my professional experience, long-term care planning is one of the least discussed, yet most important, parts of a complete financial plan.

Why is it so often skipped?

• Denial: It’s uncomfortable to think about needing help with basic daily activities.

• Misunderstanding: Many believe it's an issue for "old age," when in reality, accidents, illnesses, and cognitive decline can strike much earlier than expected.

• Cost concerns: Traditional long-term care insurance has historically been expensive, and people fear paying premiums for something they "might not need."

But ignoring it doesn’t make the risk go away, it only leaves your family more vulnerable.

Solutions Beyond Traditional Long-Term Care Insurance

The good news is there are now more ways to plan for long-term care than ever before many of which provide value even if you never need care.

• Hybrid life insurance policies: These combine life insurance with long-term care benefits. If you never use the care benefits, your family still receives the life insurance payout.

• Asset-based long-term care: Single premium options allow you to reposition money you already have (like from a savings account or CD) to create a pool of funds for long-term care, with death benefit protection if care is never needed.

• Indexed Universal Life (IUL) policies with chronic illness riders: These plans can grow your money safely with market-linked growth potential, while providing access to funds in case of a major health event.

• Annuities with long-term care riders: Some annuities now offer enhancements that double or triple your income payments if you need long-term care.

  
  

These solutions are designed to be multi-purpose. They protect your money, provide growth, and offer access to funds if you need care, meaning your investment doesn’t go to waste even if you never file a claim.

Final Thoughts

Caring for a loved one has made the realities of long-term care personal for me. It’s not just a "retirement planning problem" it’s a life problem, a family problem, and a financial security problem.

Planning for long-term care isn’t just about protecting your savings — it’s about protecting your dignity, your independence, and your loved ones.

The earlier you plan, the more options you’ll have, and the more control you’ll keep over your future. There are strategies available today that didn’t exist a decade ago, smart, flexible ways to prepare without sacrificing your financial goals.

Long-term care planning may not be easy to think about but trust me: it’s far easier to prepare now than to react later.

If you haven't discussed it yet, it's time to start.

Your future self and your family will thank you.