Someone turning 65 has almost a 70 percent chance of needing some long-term care, and about 20 percent will need it for more than five years, according to the U.S. Administration for Community Living. The 2024 Genworth and CareScout Cost of Care Survey puts the national median at $127,750 a year for a private nursing home room, $70,800 for assisted living, and $77,792 for a home health aide working 44 hours a week. Those are the numbers a self-funding assumption has to survive; the care plan below turns them into a household-specific figure.
Make the care plan specific
Long-term care includes help with daily activities or supervision for cognitive impairment. A family member may coordinate that care even when professionals provide it. Ask what that role would involve before assuming someone can take it on.
- Where would the client prefer to receive care, and is that setting practical?
- Who would arrange care and make decisions if the client could not?
- Which assets would fund care first, and how accessible are they?
- How would a longer or more expensive care period affect the other spouse?
- Which legacy goals could change if the family funds care itself?
Use local provider costs and several duration assumptions. A national median can provide context, but it is not a quote for the care this family would choose. CareScout's cost survey offers a starting point for regional comparisons.
Traditional long-term care insurance
Traditional coverage pays eligible benefits under a contract focused on long-term care. Compare the daily or monthly limit, total benefit pool, covered settings, inflation protection, and waiting period. Premium increases may be possible on a class of policies, subject to the contract and applicable approval requirements.
Benefits may go unused if care is never needed. Some designs offer additional features, so avoid assuming all traditional policies have identical premium or residual-value terms.
Hybrid life or annuity policies
Hybrid designs combine long-term care benefits with life insurance or an annuity. Compare how care payments affect remaining cash value and death benefits, whether any minimum death benefit remains, and what premiums are guaranteed. A life policy's chronic-illness rider is not automatically equivalent to dedicated LTC coverage.
Compare actual illustrations using consistent assumptions. Neither traditional nor hybrid coverage always provides the most LTC benefit per dollar; age, funding pattern, guarantees, inflation features, and benefit structure affect the result.
Aligned Path places fixed and hybrid annuity designs on request when they fit the plan, usually as a long-term care funding vehicle.
Self-funding some or all of the cost
A self-funding plan identifies the accounts that would pay for care and tests the effect on spending, taxes, liquidity, and the other spouse's resources. A client may also insure part of the exposure and retain the rest. Review the funding decision with the financial and tax professionals who manage those parts of the plan.
Read the benefit triggers
Check how the policy defines a qualifying need, including assistance with daily activities or cognitive impairment. Review certification requirements, eligible providers, the elimination period, and whether the policy reimburses expenses or pays a cash benefit. Having a policy does not mean every care expense qualifies.
Medicare does not cover custodial care when it is the only care needed. Short-term skilled-nursing coverage has separate conditions. Medicaid eligibility and benefits are state-specific and require their own review.
Further reading: NAIC long-term care guidance, the Administration for Community Living on how much care people need, Medicare nursing-home coverage, and CareScout regional care costs.
