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The basics of planning for long-term care explained

by Wyoming Livestock Roundup

Aging is a fact of life and it comes with certain realities. While most probably don’t want to picture themselves eventually needing help with daily activities, more than half of Americans turning 65 this year will need some type of long-term care during their remaining years, according to research conducted by Melissa Favreault and Judith Dey from the U.S. Department of Heath and Human Services. 

As this type of care is not generally covered by private health insurance or Medicare, it’s important to create a plan to help protect families from the financial and emotional impact of a possible long-term care event.

Long-term care basics

Long-term care encompasses a variety of services to assist those who can no longer perform everyday activities on their own. These activities, known as activities of daily living include dressing, eating and bathing. 

A chronic illness or a physical impairment can lead to a need for long-term care, but it’s most commonly needed as the result of a cognitive issue, such as Alzheimer’s disease. Care services can be provided in the home, a community setting or a facility such as a nursing home.

Expected costs

On average, women need about 2.5 years of long-term care and men an average of 1.5 years, based on an article by Favreault and Dey. The national average for a home health aide is $23.27 per hour.

 For example, 20 hours of care per week would cost more than $24,000 per year, while a private room in a nursing home averages $103,660 per year.

Long-term care costs can quickly add up and can have a significant impact on retirements and the assets people have worked hard to accumulate. 

Understanding the various long-term care planning options available is critical to helping individuals put a plan in place to ensure they have access to the type of care they prefer while protecting their finances.

Planning for care

Depending on age, health, means and needs, there are several ways to address long-term care. 

Standalone or traditional long-term care insurance plans generally provide the most robust long-term care coverage based on the premiums paid, can be customized to suit individual needs and offer the option to receive care at home, in an assisted living facility or a nursing home.

Linked-benefit or hybrid plans combine long-term care insurance with life insurance. This option provides broader coverage and greater flexibility, usually at a slightly higher price point since there are multiple risks insured.

Riders, such as chronic care riders on life policies, offer the most basic coverage, allowing a portion of the policy’s death benefit to be accessible should one become chronically ill.

Those planning for care may be able to pay for long-term care out-of-pocket or self-fund if they have significant assets. While this may be an option for some, it’s often valuable to weigh the benefits of private insurance versus self-funding as there are additional advantages coming with private insurance, including care management and risk sharing, which can be beneficial in the event of a catastrophic long-term care event.

Medicaid does cover some long-term care services, unlike Medicare, which most people are surprised to learn does not cover long-term care. However, participants need to spend down most of their assets to qualify and then will need to receive care in an approved facility.

When to plan

Health and age are key factors used in determining eligibility and rates for private long-term care solutions, so it’s best to explore these options between 40 and 50 years of age. 

It’s never too soon to start planning for long-term care. The peace of mind many families have knowing they are protected, and retirement can be an important benefit of creating a plan, even if one elects to just protect part of their risk with a smaller amount of coverage. 

Take the first step and contact a New York Life agent to help find a solution to suit specific needs.

This educational, third-party article is provided as a courtesy by Matt Grant, an agent with New York Life Insurance Company. To learn more about the information or topics discussed, please contact Grant at 307-797-8949 or

The purpose of this material is solicitation of individual insurance. An insurance agent may contact you. Policy forms ICC16-316-60P & ICC16-316-284R, ICC16-316-150P & ICC16-316-283R, 316-60P & 316-284R, 316-150P & 316-283R & ICC13314-60, 314-60, 898-60, and any state-specific, are issued by New York Life Insurance and Annuity Corporation, Newark, DE, a wholly owned subsidiary of New York Life Insurance Company.

 Policy forms ICC18-LTCD PLCY (0218), ICC18-LTCDNC PLCY (0218), ICC18-LTCDNC-U PLCY (0218), ICC18-LTCD-U PLCY (0218), ICC18-LTCWP PLCY (0218), ICC18-LTCWPNC PLCY (0218), ICC18-LTCWPNC-U PLCY (0218), ICC18-LTCWP-U PLCY (0218), LTCD PLCY (0218), LTCD-U PLCY (0218), LTCWP (0218), ICC14-LTC6, LTC6, LTC6-U and any state-specific are issued by New York Life Insurance Company, New York, N.Y. These products have exclusions and limitations. 

Underwriting approval is required to purchase coverage and a medical exam may be required. The company reserves the right to increase premiums in the future. For cost and complete details of the coverage, contact an agent or the company.

ICC19-1830455 and 1830455.

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