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What Is Your Long-Term Care Plan_

What Is Your Long-Term Care Plan?

By Wealth Management Solutions

There are a lot of things you don’t want to gamble with in life; your family, your wealth, and your long-term health are just a few. Unfortunately, too many people fail to incorporate long-term care (LTC) into their overall financial plans. And, since nearly 70% of today’s 65-year-olds are going to need some form of LTC, (1) we make it a point to help our clients plan for this and more.

At Wealth Management Solutions, we want our clients to be prepared for any of life’s changes. That’s why we strive to provide our clients with the latest information about LTC costs and strategies. Read this guide to learn more about your options and reach out to us today with any questions you might have.

How Much Does Long-Term Care Cost? 

The reality is that LTC costs are so high that they can really put a dent in your wealth. In 2022, the national average is $306 per day or $9,305 per month for a private room in a nursing home. (2) To make matters worse, women often pay significantly more than men for LTC because they are typically estimated to live longer. Women usually require LTC for 3.7 years (or around 44 months) versus 2.2 years (or around 26 months) for men. (3) When these costs are added up, women will spend $409,420 and men will spend $241,930 on LTC alone. 

Keep in mind, these numbers are only projected to increase. By 2032, the daily cost for a private room in a nursing home is expected to jump to $411 or $12,505 per month. (4) Also, these costs can vary dramatically based on the level of care and amenities required, as well as your geographic location. 

What’s Your Ideal Long-Term Care Situation?

Would you prefer to live in a nursing home or would you like nurses and assistants to come to your residence? Do you have a religious preference when it comes to care communities? These are among the various preferences you can consider when building your LTC plan. 

But don’t delay. If you wait until you need it, you may not be mentally or physically capable of making decisions yourself, or the size of your savings might determine the care you receive. 

Your Long-Term Care Plan

Whether you’re worried about potential health concerns or want to protect your hard-earned wealth, it’s important to understand the LTC insurance options available to you and whether or not a policy makes sense for your lifestyle and needs. 

LTC coverage isn’t cheap, but it pales in comparison to LTC costs. Here are some options to consider: 

1. Traditional Long-Term Care Insurance

With traditional long-term care insurance, you pay a premium in exchange for LTC coverage when/if it is needed. If you need LTC at some point, the policy provides you with money to pay for it. If, on the other hand, you never need LTC, you will receive no benefits. Much like a term life insurance contract, it is typically a “use it or lose it” policy.

2. Life Insurance With a Long-Term Care Rider

The use-it-or-lose-it nature of a traditional LTC policy can sometimes feel like a waste if you don’t end up needing LTC benefits. Because of this, several hybrid products have emerged. One popular solution is a life insurance policy with a LTC rider. If LTC is needed, the funds are available through your policy’s death benefit. If you don’t spend the total benefit available, your beneficiaries will receive the balance upon your death (tax-free). If you need life insurance, adding LTC coverage as a rider may be a good option for you. 

3. Annuity With a Long-Term Care Rider

If you don’t need life insurance, another combination product may be better suited to your situation. If you purchase a fixed annuity, you may have the option of adding a LTC rider onto the contract. Since 2010, the IRS allows for the LTC portion to be used tax-free. (5)

After purchasing the annuity, you would select the amount of LTC coverage you want, often two to three times the face value of the annuity, as well as the length of time you want coverage. Finally, you have to decide if you want inflation protection. 

This option makes money available to you if you need LTC. Otherwise, you can cash out the annuity when it matures (at which point you would lose your LTC coverage) or let it accumulate and ultimately pass on as an asset to your heirs. 

4. Partially or Fully Self-Insure

Another option to consider is partially or fully self-insuring. With this strategy, you would create a savings or investment plan specifically for future healthcare needs. This can be done with any number of strategies. By contributing a specific amount every month, you can build a contingency fund for whatever healthcare expenses come your way. If you end up not needing LTC, the money is still yours and can be used for your living costs, unexpected expenses, or an inheritance for your heirs.

This can be an effective option for clients who are in good health with no major concerns in their family medical history and expect to need little to no serious LTC in the future, but still want to be protected in the event of unexpected healthcare needs.  Just bear in mind that a need for LTC can be totally unexpected and occur at any time, regardless of age, so planning to self-insure can put you at risk of not having the funds at the time they are needed.

Start Planning Today

We know that thinking about the need for LTC can be stressful and confusing. That’s why our team at Wealth Management Solutions takes the planning off your plate so you can look to the future with confidence, holding fast to our mission: Our Planning; Your Future. We are here to walk you through the LTC process using our comprehensive financial planning services. If you have questions about your LTC options and want to make sure you have the coverage you need, schedule a complimentary consultation by contacting us at (949) 475-9700 or info@wms-llc.com

About Wealth Management Solutions

The story of origin: Wealth Management Solutions was created in 2003, following the personal family tragedies felt by both partners of the firm. First, Richard Riva, the founding partner, lost his father unexpectedly and before any legacy planning was done that could have extended his family’s legacy beyond the fourth generation. Secondly, Martin Lombrano lost his father before plans and strategies were designed to protect his family’s wealth and legacy. Our partners and team members all share similar experiences due to a lack of planning for their families and are committed to our clients not experiencing the loss of their legacies due to a lack of planning. This is why we say: Our Planning; Your Future.


(1) https://www.jrcinsurancegroup.com/long-term-care-statistics/

(2) https://www.genworth.com/aging-and-you/finances/cost-of-care.html

(3) https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html

(4) https://www.genworth.com/aging-and-you/finances/cost-of-care.html

(5) https://longtermcareinsurancepartner.com/blog/using-annuities-to-pay-for-long-term-care



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