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Long-Term Care Insurance

  • The cost of a long-term care event could significantly impact your ability to meet your retirement income goals.
  • Long-term care insurance can help provide confidence knowing you are protecting your hard earned assets.
  • It’s a common misconception that Medicare will cover the costs of care, but Medicare won’t fund an extended care stay.

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What could happen in the long run?

With longer life spans, the likelihood you will need some type of long-term care is significant. About 60% of us, at some point in our lives, will need assistance with things like driving to appointments, making meals or getting dressed.1

The long-term effects of a chronic illness resulting from a stroke, a heart attack, cancer, and diabetes are common culprits leading to nursing care. In your advanced years, even slips, trips, and falls can result in the need to be in rehabilitation or under nursing care.

Medicare doesn’t cover everything

It’s a common misconception Medicare will take care of all care costs after age 65, but there are many costs Medicare doesn’t cover.

For example, Medicare won’t fund the cost of assisted living, adult day care, or an indefinite stay in a nursing facility. If you should need daily assistance with eating, bathing, and dressing in your own home, Medicare doesn’t cover these services either; find the annual average cost for various types of care2.

Could your finances withstand a multi-year nursing home stay? If not, long-term care insurance is worth considering. Benefits are available through a policy to cover the costs of nursing care. You could access coverage for care in your own home or an approved health facility.

Retaining or transferring the risk

Many people acquire long-term care insurance to help protect their retirement assets. Perhaps a spouse or partner is dependent on those same assets for income. What would happen to the spouse or partner if these resources were exhausted to pay for care? By retaining the risk, you are stating you will use all of your assets to pay for care should it be needed.

On the other hand, transferring the risk to an insurance company will help protect you from high future costs. Let’s say you developed an illness or cognitive impairment and needed extended nursing care. A long-term care policy would help protect your savings from the expenses of such an event.

What long-term care insurance generally covers

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The national
median cost of a
nursing home stay
Annually for
private room
*Genworth Cost of Care Survey, conducted by CareScout®, a Genworth company, November 2021
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Most long-term care policies provide a daily or monthly benefit amount that can be applied to a variety of settings, including:

  • Your home
  • Adult day service centers
  • Hospice care
  • Respite care
  • Assisted living facilities (also called residential care facilities or alternate care facilities)
  • Alzheimer’s special care facilities (also called memory care facilities)
  • Nursing homes

In the home setting, comprehensive polices generally cover these services:

  • Skilled nursing care
  • Occupational, speech, physical, and rehabilitation therapies
  • Help with personal care, such as bathing and dressing

Are you a candidate for long-term care insurance?

Long-term care insurance is not for everyone. It may be for you if you:

  • Are concerned about the cost of a potential extended care event and needing long-term care insurance.
  • Have a family history of chronic illness or cognitive impairment.
  • Have accumulated assets that your family relies on. These assets could be at risk if you need long-term care services.

If your assets fall below a certain threshold, you may find the cost of the premium to be cost-prohibitive in retirement. At the other end of the spectrum, you may have sufficient assets to cover the costs of an extended illness. Even if you do, long-term care insurance may prevent you from depleting your finances to pay for the care you want, helping to protect your assets for a spouse or leave a financial legacy to your heirs.

When is the right time?

Sooner is generally better than later for three primary reasons:

  1. The younger you are the more likely you will be healthy enough to qualify for coverage.
  2. Purchasing insurance during your peak earning years may allow you to fully fund your coverage before you retire.
  3. The cost of long-term insurance typically rises with age.

There are a variety of options and many types of long-term policies. You can choose from features that fit your specific needs and family situation

You may prefer coverage that would pay a death benefit to your heirs if care is never needed. Perhaps the death benefit is your primary focus, but you would like to know you could access it during your lifetime for care. There are a variety of potential strategies available to help meet your unique goals.

Next steps

  • The cost of long-term care insurance is based on your age, health, and the amount of coverage available for care. Look into the variety of options and types of policies.
  • Find out what’s covered and what’s not; there are many choices when selecting an insurance policy.
  • You can buy individual policies, or in some cases share a policy with your spouse.
  • Your Financial Advisor can help you model various scenarios to be sure you have the bases covered.

1 What is Long-Term Care (LTC) and Who Needs it?, (accessed 7/18/2023).
2 Genworth Cost of Care Survey, conducted by CareScout®, a Genworth company, November 2021 (accessed 7/18/2023).

Insurance products are offered through nonbank insurance agency affiliates of Wells Fargo & Company and are underwritten by unaffiliated insurance companies.