Long-Term Care for Yourself

The story: Lee and Aunt Ruth

Lee, who just turned 50, listens as Aunt Ruth describes three years of needing help at home and who paid for it.

1. Narrator: Lee just turned 50. Lee’s aunt Ruth needed help at home for three years after a fall.
2. Ruth: I thought Medicare would pay for my aide. It paid for the hospital, but not the daily help.
3. Narrator: Help with bathing, dressing and eating is long-term care. Medicare mostly doesn’t cover it.
4. Lee: So how would I pay for care, if I need it someday?
5. Narrator: Savings, a care policy, a hybrid policy, or Medicaid once most savings are gone. Each one has trade-offs.
6. Narrator: Deciding while healthy keeps more choices open. Paying from savings is fine too, if it’s a plan and not a hope.

What you’ll learn

1. What long-term care is

   Long-term care is help with daily activities, like bathing, dressing and eating, at home or in a facility. Medicare mostly doesn’t pay for it. Medicaid can, but usually only after most savings are spent.

2. Ways to pay

   People pay with savings, traditional long-term care insurance, hybrid life or annuity policies with a care benefit, or Medicaid. Traditional policies can raise premiums later. Hybrids cost more upfront, but their premiums are usually fixed.

3. What to compare in a policy

   Look at the daily or monthly benefit, how long benefits last, the waiting period before they start and inflation protection. Some states offer partnership policies that protect more of your savings if you later need Medicaid, and some run their own care programs.

4. Why timing matters

   Applying later, or after a health change, can mean a higher price or a “no”. That’s why many people decide in their late 40s to 50s. Choosing to self-fund or rely on family can work too, as long as it’s a real, written plan.

Key words

long-term care insurance

a policy that pays for help with daily living

hybrid policy

life insurance or an annuity with a long-term care benefit built in

benefit trigger

what must happen before a policy pays, like needing help with daily activities

inflation protection

a policy feature that raises the benefit over time as costs rise

Common questions

How much does care cost where I live?

Costs vary a lot by state and type of care. The fact card links to a federal planning site with cost data and tools.

Can I deduct care insurance premiums?

Sometimes, within yearly limits that depend on age. The IRS rules are on the fact card.

Remember this

Decide how you’d pay for care while you’re healthy enough to choose.

Try it: Write your care plan

1. Add “decide my long-term care plan” to your yearly money check-up list.
2. Write down how you’d pay for care: savings, a policy, family or a mix.
3. If you buy a policy, add its premium to your bills.

No account needed: write your plan on paper and keep it with your yearly check-up list.

Live facts

Numbers that change over time, with when they were last checked and where they come from.

• Long-term care costs and planning tools

  Source: ACL.gov (LongTermCare.gov)(opens in a new tab)

• Limits on deducting long-term care premiums

  Source: IRS.gov (Publication 502)(opens in a new tab)