Is Long Term Care Insurance Right For You?

Thinking about long-term care planning can feel overwhelming at the start. After all, life is busy and the possibility of needing it can feel very far away. But that’s exactly the right time to start looking at your options— long before an emergency situation arises so you have a plan already in place should the time come when you need extra assistance. Here we’ll discuss the benefits of long term care insurance versus self-funding your long term care so you can decide what is right for you and your family.

Many people do not realize that help with activities of daily living (ADLs for short) such as bathing, dressing, eating, transferring (moving from one surface to another), toileting (using a commode) or continence, and cleaning, if you have a physical or cognitive disability, are not covered by Medicare or private health insurance. This type of care, whether at home, an assisted living, a continuing care retirement community, or a nursing home, can only be covered in two ways: long term care insurance, or, out of pocket. And paying out of pocket for ADLs, not even including the cost of the healthcare itself, can get expensive quickly. According to the Genworth Cost of Care Survey, the nationwide median monthly cost of long term care in 2021 was $4,957 for homemaker services, $5,148 for home health services, $1,690 for adult day health care, $4,500 for assisted living, $7,908 for a shared nursing home room, and $9,034 for a private room. Long term care insurance is the only type of insurance that can help with these types of costs. And furthermore, there are even different types that can be selected based on your specific needs. For example, you can choose from traditional long-term care insurance, life insurance with a long-term care rider, or a hybrid long-term care insurance. A certified insurance broker specializing in long term care can help you decide which of these options might be best for you and your family by looking at your overall financial picture, as well as your specific needs and wishes. It’s also important to note, the earlier you sign up, and the healthier you are, the lower the monthly cost will be.

On the other hand, if you are thinking about self-funding through savings, retirement accounts, and investments, it is an option some people have enough funds to properly handle. However, it’s important to note this only works successfully under very specific circumstances for people well enough off. As such, there are a number of things you should keep in mind if you do decide to go down this route. For starters, there is the unpredictability of the stock market and where your investments land when the need for care arises. The market can truly be a bit of a gamble. To this end, there are also national and international economic trends, such as the possibility of a recession, which we unfortunately have no control over, but could very well affect long term savings and being able to liquify them as well. Speaking of liquifying, when doing so in large amounts (i.e. when expensive long term care is needed), it has the potential to result in high capital gains tax that could affect how much money you have long term. And finally, thinking about legacy and what you are leaving to your loved ones and causes you care about, is another factor to consider when self-financing long term care, the length of which can potentially go on for years, versus having insurance cover any long term care. These are all just important factors to take into consideration when calculating if your current combination of savings, retirement accounts, and investments will cover all of your various long term care needs.

Regardless of which option you choose, the most important thing you can do for yourself and your loved ones is to ensure you have a plan in place for the future for protection. As you age, in addition to thinking about things like your retirement plans, wills, and medical directives, you need to start planning for the possibility of needing additional care. Afterall, according to MorningStar an estimated 47% of men turning 65 will need long term care in their lifetime with an even greater percentage of women 65 and older needing care, estimated at 58%. We unfortunately can’t always control our need for care, but what we can do is plan for it properly. At Baygroup Insurance, we’re here to answer any questions you may have about what long term care plan is right for you. Feel free to contact us at or call us at 410-557-7907 for more guidance and education to look at your overall long term care picture at absolutely no obligation.