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Long-Term Care Insurance Basics Every Retirement Planner Should Know

long-term care insurance icons

What is long-term care insurance? How much does it cost? And, do I really need it?


Whether you’re thinking about retirement or just planning for the future, long-term care insurance can be a long-term game-changer. Let’s talk about the basics!

First, what is long-term care?

long-term care clock and stethescope

Long-term care, in essence, refers to a broad range of medical and non-medical services that are provided to individuals who are unable to perform basic activities of daily living, such as dressing, bathing, eating, or even moving around their home.


This kind of care is designed to assist those who need regular health monitoring or have certain conditions that make day-to-day tasks challenging. It’s important to note that long-term care isn’t exclusively for seniors, but it’s often associated with this demographic due to the common age-related conditions that necessitate such care.

Long-term care can take many forms and be provided in various settings depending on the person’s needs and circumstances. This can range from care provided in the comfort of your own home by a visiting nurse or caregiver, to more structured environments like assisted living facilities and nursing homes.

Assisted living facilities are typically communities where residents have their own apartments but also have access to help with daily tasks and medical care as needed. Nursing homes, on the other hand, provide round-the-clock care and medical supervision for residents who need more intensive assistance.

How much does long-term care cost?

hospital piggy bank

Well, that depends. According to Genworth’s Cost of Care Survey, the annual cost of long-term care can range anywhere from $20,000 to over $100,000. And, the costs are expected to keep rising.


In fact, recent news reports highlight the fact that more than half of older Americans will need long-term care. However, many find themselves unable to afford the escalating costs associated with these essential services.

long-term care costs table courtesy of Genworth: Financial Solutions
Courtesy of Genworth: Financial Solutions

So, what is long-term care insurance?

money in the middle of a life safer float

Health insurance rarely pays for costs associated with long-term care. Help with daily activities and mobility are a pretty big part of receiving long-term care. Your health insurance provider only wants to cover doctors and hospitals. So, that’s where long-term care insurance steps in. It’ll help cover custodial care, meal services, and housekeeping, as well as room and board if you reside in a facility.

How much does long-term care insurance cost?

piggy and stethescope

The average cost is around $2,000 annually. A plan will begin to pay out benefits usually when a person is unable to perform two or more activities of daily living. For those concerned about paying for coverage they may never need, many insurance companies offer hybrid policies. Hybrids add a death benefit to your policy for cases where long-term care is never needed.

Is it worth it?


Sure, you have savings and a portfolio full of retirement investments. But, things come up. You or your loved one’s health can change in the blink of an eye. When faced with the unexpected, savings have a way of running out awfully quickly. And, if you want to protect your assets, a backup plan might just be the way.


Check out these resources for more info!

If you’re looking for long-term care, start here!

Bob Carlson’s Retirement Watch

Genworth: Financial Solutions

Life Happens

Originally published September 18, 2023

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