Have you addressed whether you or a loved one might need long-term care (LTC) insurance? If you haven’t, you’re not alone. In all the excitement surrounding retirement planning, families often end up treating LTC insurance as an after-thought. Unfortunately, the oversight can cost you everything you’ve worked so hard to attain. How do you know if you need long-term care insurance?

Planning for Long-Term Care

Picture this: After years of diligent saving, careful planning, and responsible living, the day comes when you can finally declare yourself financially independent; you can work or not as you please. Hooray! 

But, along with all that life experience and wisdom gained, comes an increased susceptibility to aches, pains, injuries and illnesses. This truth can hurt, especially if you haven’t planned for how to cover the costs, should you require extra care for a little or a long time. 

Consider These Sobering Statistics About Long-Term Care 

The LTC Damage Done

The cost of long-term care can wreak havoc on your financial security, eroding away years of accumulated wealth. Depending on where you live and where you receive care, costs can vary greatly.

Most of us prefer to remain at home when recovering from an illness or injury. Unfortunately, that’s not always practical, especially for those who are battling cognitive impairment. For their own sake and the sake of their caregivers, they may want or need to move into assisted living or a memory care facility. They may require extensive, 24×7 care that a family member alone cannot provide.

Considering an otherwise healthy individual living with dementia or Alzheimer’s could live a relatively long life, paying for that care could have serious financial consequences. Genworth, among the largest providers of LTC insurance, tracks the costs of care across the U.S. As of 2020, they report:

  • In-home care: The current median cost is approximately $4,500/month.
  • Nursing home care: The median cost for a private room in a nursing home can exceed $8,800/month.
  • Memory care: We’ve seen instances where the cost of care approached $13,000/month.

Asking the Right Questions About Long-Term Care Insurance

In short, a well-structured LTC policy can pay for itself many times over in costs and peace of mind. But how do you decide what to purchase, in what amount?

As with any insurance, there are choices to be made, and the nuances can make it hard to accurately compare various options. Following are four key questions to ask as you consider LTC insurance coverage vs. cost:

1.    What do you need? Does your family history bode well for you? Do you live a relatively healthy lifestyle? Do you have family members nearby to help?

2.    What do you want? Would you be okay with adult day care, assisted living, and/or nursing home care as needed? Or do you want to seek extra coverage to help you stay at home for as long as possible (such as home modification or in-home equipment coverage)?

3.    What might you already have? You may already have some level of coverage through your employer, existing healthcare policies, your personal assets, and/or access to Medicaid. Where are the gaps? If you have LTC coverage through work, is it portable? Do you have an HSA account you might be able to tap, to cover some LTC costs more tax-efficiently?

4.    What’s the best way to fund it? If you have enough wealth, you may prefer to self-fund LTC expenses should they arise, rather than paying premiums up front. But it’s worth taking a look at how that choice could impact your cash flow and legacy plans. In other words, how badly could a significant LTC event derail the rest of your financial goals?

If you can, it’s best to lock into an appropriate LTC insurance policy while you are still relatively young, healthy, and insurable – i.e., in your 40s or 50s, and free from significant preexisting conditions. The longer you wait, the more expensive the premiums are likely to be … or you may not qualify at all.

Watch our recent webinar on Long-Term Care Insurance


A Cogent Strategy Can Help

For 11 years, Cogent Strategic Wealth has been helping busy, thriving professionals just like you make sense of their financial plans and manage the complexities that go into achieving them. That includes watching out for the curveballs, which is why we are proactive about integrating long-term care planning into your strategic wealth conversations. We will help you determine if you need Long-Term Care Insurance as part of your retirement planning.

If you want to learn more about how to build a financial plan that will help you realize your financial goals, while avoiding the headache of managing every aspect, sit down with our team today for a Cogent Conversation. We’ll listen to what success looks like for you, build a plan tailored to you, and help you execute that plan every step of the way.  

Don’t manage your financial future all on your own. Book your Cogent Conversation today!

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