Long-Term Care Planning
Purpose-built coverage that helps pay for the ongoing care most people will eventually need, protecting retirement savings, preserving independence, and reducing the financial burden on family members.
Overview
Most retirement plans account for housing, income, healthcare premiums, and living expenses — but far fewer account for the cost of long-term care services. Yet according to federal research, nearly 70% of individuals turning age 65 today will require some form of long-term care during their lifetime. These services — which may include in-home assistance, adult day care, assisted living, memory care, or skilled nursing facility care — carry substantial costs that health insurance and Medicare are not designed to cover.
Traditional long-term care insurance is specifically designed to fill this gap. Benefits are triggered when a policyholder is unable to perform a certain number of Activities of Daily Living (ADLs), such as bathing, dressing, eating, transferring, toileting, or continence, or when cognitive impairment is diagnosed. Once triggered, the policy pays a daily or monthly benefit toward qualifying care expenses, giving the insured access to quality care without being forced to liquidate retirement savings to pay for it.
Unlike health insurance or Medicare, traditional long-term care insurance is designed to address ongoing custodial care needs, the kind of sustained support that may be required for months or years, not just weeks of recovery. Michael helps individuals and couples across the Omaha area evaluate whether traditional long-term care insurance is the right strategy given their health, financial profile, and retirement goals.
Traditional long-term care insurance premiums are primarily determined by age and health at the time of application. The longer planning is deferred, the higher the premium, and health changes can make coverage unavailable entirely. For individuals in good health in their 50s and early 60s, this is typically the window where coverage is both accessible and most cost-effective.
Where Benefits Apply
Protects Retirement Savings
Long-term care expenses can erode decades of retirement savings in a matter of years. Insurance benefits shift that financial risk from your personal assets to the insurance carrier, preserving what you've built for your intended purposes.
Preserves Financial Independence
Coverage allows you to direct care decisions based on your preferences, not on what your remaining savings can support. This means greater choice of facilities, care providers, and in-home care arrangements.
Reduces the Burden on Family
Without a care plan in place, family members often become unpaid caregivers by default, sacrificing their own careers, health, and financial security. Insurance benefits enable professional care and reduce the physical and emotional toll on loved ones.
Significant Leverage vs. Self-Funding
Insurance premiums are a fraction of the benefits they provide access to. Compared to setting aside a large self-funded reserve for potential care costs, traditional LTC insurance provides substantial leverage, particularly if care is needed earlier or for a longer duration than anticipated.
Flexible Benefit Configurations
Benefit amount, benefit period, elimination period, and inflation protection options can be structured to match your budget, risk tolerance, and the level of coverage you want to carry into retirement.
Care in the Setting You Prefer
Most people prefer to receive care at home for as long as possible before transitioning to a facility if necessary. Traditional LTC policies generally cover in-home care, giving you coverage for the setting most people prefer first.
Who It's For
Individuals in Good Health in Their 50s or Early 60s
Traditional long-term care insurance is underwritten based on health at the time of application. Applying while in good health typically results in more favorable premiums and a wider range of policy options. Waiting until health changes occur can reduce or eliminate eligibility entirely.
Those With Retirement Assets to Protect
Traditional LTC insurance is most valuable for individuals who have meaningful retirement savings, enough that a prolonged care event would significantly impact their financial security, but not so much that self-funding care would have no meaningful impact on their lifestyle or legacy goals.
Couples Concerned About the Healthy Spouse's Financial Security
When one spouse requires extended long-term care, the costs can rapidly deplete assets that the other spouse was counting on for their own retirement. LTC insurance protects the couple's joint resources so one spouse's care needs don't undermine the other's financial security.
Those Who Want Dedicated, Purpose-Built LTC Coverage
For individuals who want insurance coverage specifically structured and sized for long-term care, without the complexity of a hybrid product, traditional long-term care insurance provides the most direct, dedicated protection.
Common Questions
Medicare provides very limited coverage for long-term care services. It may cover short-term skilled nursing facility care following a qualifying hospital stay, but only up to 100 days, and with significant cost-sharing. Medicare does not cover ongoing custodial care such as assistance with Activities of Daily Living in a home setting or extended stays in assisted living or memory care facilities. The gap between what Medicare covers and what most people actually need is precisely what traditional long-term care insurance is designed to address.
Most traditional long-term care policies use two benefit triggers. The first is functional impairment, typically defined as the inability to perform two or more Activities of Daily Living (ADLs) without substantial assistance. Common ADLs include bathing, dressing, eating, transferring, toileting, and continence. The second trigger is cognitive impairment, a severe deterioration in cognitive capacity such as that caused by Alzheimer's disease or other forms of dementia. When either trigger is met and a licensed care professional certifies the need, benefits become available.
The elimination period functions similarly to a deductible, it is the number of days of qualifying care that must be received before the policy begins paying benefits. Common elimination periods are 30, 60, or 90 days. A longer elimination period generally results in lower premiums, but means more out-of-pocket costs at the beginning of a care event. Michael helps clients select an elimination period that balances premium affordability with personal liquidity, generally, those with sufficient liquid savings to cover several months of care costs may find a longer elimination period to be a cost-effective structure.
Inflation protection is a critical consideration, particularly for younger applicants. Long-term care costs have historically risen faster than general inflation, meaning that a daily benefit that adequately covers care costs today may be insufficient 20 or 30 years from now when care is actually needed. Policies can be structured with automatic compound inflation protection (commonly 3% or 5% annually) or simple inflation options that incrementally increase the benefit over time. Michael helps clients evaluate the cost-benefit tradeoff of different inflation protection options given their age and planning horizon.
Related Services
Life Insurance with LTC Rider
A hybrid approach that combines life insurance protection with the ability to access the death benefit for long-term care expenses, providing value whether care is needed or not.
Learn More →Retirement Planning
Long-term care planning is most effective when integrated into your broader retirement income strategy, ensuring income, assets, and protection work together.
Learn More →Medicaid Asset Protection
Coordinated planning strategies designed to help preserve assets while preparing for potential future long-term care needs, working alongside elder law attorneys when appropriate.
Learn More →Schedule a free consultation with Michael to explore whether traditional long-term care insurance belongs in your retirement plan, and what coverage structure makes sense given your health, assets, and goals.
