Covering the Cost of Long-Term Care

Covering the Cost of Long-Term Care…You’ve worked hard for a long time to make sure you and your family have financial security. Additionally, you’ve done what you can to prepare for whatever the future might hold. However, even the most well-thought-out strategy may not be enough to prepare you for the potential unexpected cost of long-term care.

With Americans living longer than ever, most of us will most likely need some form of long-term care as we get older. And, today, we’re going to explore statistics related to long-term care, and a few different options for covering its cost.

Long-Term Care Statistics

The duration and level of long-term care vary from person to person. You can’t predict whether or not you’ll need it, or for how long. Furthermore, your needs will most likely change over time. However, there are some statistics you should consider:

  • A 65 -year old today has nearly a 70% chance of needing some form of long-term care at some point
  • Women, on average, need long-term care for longer than men do: 2.2 years for men, 3.7 years for women
  • 20% of today’s 65-year-olds will need it for longer than 5 years
  • The average cost of a year’s care in a private, Medicare-certified, long-term nursing home is $107,000
  • The average cost of a year in an assisted living care facility is $57,000 per year
  • The cost of in-home care for a year, for 40 hours of help per week, is $50,918

Also, it’s important that as you make decisions you make sure you understand your options, and you’ve talked to people you trust about it (Your family, your doctor, et cetera.)

Learn Your Options

Here are some more details regarding the ways you can pay for the cost of long-term care. Such as:


Medicaid may cover services including:

  • Home care (cooking, cleaning, helping with other daily activities)
  • Home health services (such as physical therapy or skilled nursing care)
  • Transportation to medical care
  • Respite care
  • Hospice
  • Case Management

Medicaid programs do, however, vary from state to state. It’s important to note that Medicaid may offer more services in your specific state not offered in others. Call your Medicaid office to find out more details.

These types of services may be available through other programs. For example, Area Agency on Aging or Medicare.

However, Medicare may cover a maximum of 100 days of service after a hospital stay. Coverage is designed to assist people during a short-term recovery, and doesn’t include personal care or supervision services.

Subsidized Senior Housing

There are both state and federal programs to help pay for housing for seniors with low to moderate incomes. Some of these housing programs also offer services to help with meals, and potentially housekeeping, shopping, and laundry. Residents usually live in their own apartments, with rent payments based on a percentage of their income.

Hospice and Respite Care

Hospice is a program of care and support for the terminally ill. The focus is on helping people with terminal illnesses try to live more comfortably. Respite care is a short inpatient stay given to a hospice patient, so that their usual caregiver can rest.

Group Living Arrangements

Residential care communities, also known as personal care homes, or assisted living communities, are examples of group living arrangements. The benefit of a group living arrangement is that they it can help you with some activities of daily living that you might have difficulty with as you get older if you lived alone. Whether they offer nursing services or not, or if they help with medications at all, is something that varies state by state. In most cases, residents of these communities pay regular monthly rent and additional fees depending on the type of personal care and services they get.


PACE (program of all-inclusive care for the elderly) is a Medicare or Medicaid program that helps people in a community meet healthcare needs. If you want to learn more about it and these other options for covering long-term care, you can visit for more information and resources. This could help you and your family plan for the possibility of needing long-term care sometime in the future.

Paying For Long-Term Care Using IUL Insurance

Do you currently have a life insurance policy in place? You may not realize it, but the right type of life insurance may be another way of covering the cost of long-term care. For example, borrowing money from the cash value of your IUL (indexed universal life) insurance policy may be a way of covering potential costs. A great benefit of this method is, even if you don’t end up needing it for the cost long-term care, there are other costs that the money stored in your IUL can help cover.

One major benefit of an IUL is that it offers a source of tax-free income, and one which you can access at any time. This is a benefit that it has over more traditional types of retirement accounts. Additionally, an IUL has no contribution limit. And, your IUL’s cash value is unaffected in the event of a stock market drop. This benefit might be useful considering sources suggest that a recession is on the way.

Purchasing IUL insurance and adding a long-term care rider is one very efficient way of paying off the cost of long-term care. Contact us to learn more about this potential strategy. And remember, we’re always here to help.

Sources:,, AARP.

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