How Poor Planning for Long-Term Care Needs Can Reduce Lifetime Income

As we go through day to day life, most of us prefer not to think about the sad realities of things such as death or long-term care. Unfortunately, though, these aren’t concepts that happen only to “other people” – so, having a good solid plan in place in order to address these concerns ahead of time can go a long way in easing many concerns – financial, physical, and emotional.

According to Genworth’s Expanding Circle of Care report, 62% of caregivers today are between the ages of 25 and 54 – and of those, more than 40% feel that the long-term care event in their life has negatively affected their personal health and well-being.1

This is likely due in large part to the high level of stress that caregiving can induce, as well as the time that caregiving takes away from time that would otherwise be spent with a spouse or partner, and children. It can also oftentimes require taking time off work – which can, in turn, cause a negative financial impact on the caregiver, as well as his or her family, and their overall financial future.

Based on research from Genworth, caregivers who help provide financial assistance for the care of their loved ones estimate that they pay, on average, about $10,000 in out-of-pocket expenses annually.2

With this in mind, planning ahead for the tremendous cost of long-term care can help in a number of different ways. First, by having ample financing, the proper care can be sought so that family members and loved ones can still visit the care recipient, yet continue their daily lives. This also helps to ensure that the care recipient is receiving the right type of care for his or her specific needs.

How to Help Protect Finances From the High Cost of Long-Term Care

For those who may end up becoming an informal care provider to a spouse, parent, or other loved one, planning ahead for long-term care is a must, then, in terms of protecting both assets and income. There are several ways of going about doing that, such as:

  • Long-Term Care Insurance: One way to plan ahead for long-term care needs is to purchase a stand-alone long-term care insurance policy. Most of today’s plans will cover care that is received in a facility – including a skilled nursing home, as well as an assisted care facility – and care that is received in the recipient’s own home. Additional benefits are usually also covered for items such as informal care giving and respite care.


  • Single Premium Combination Plan: There are also several combination plan options that are available in the market today. With these options, a single lump sum deposit is made, and the insured will immediately be covered with both a life insurance death benefit, as well as a monthly benefit for long-term care. These plans help to eliminate the “use it or lose it” concern over premium cost, because even if long-term care benefits are never needed, a named beneficiary will eventually receive the life insurance proceeds. Many of these plans may also be available to applicants who have health issues, as they may not require a medical exam for underwriting purposes.


  • Life Settlement: If insurance coverage of any kind is not an option, possibly selling off an unneeded life insurance policy could be. For a senior who has a life insurance policy that is no longer needed, or where the premium cost has become prohibitive, there could be an opportunity to sell the policy for more than its cash surrender value in a transaction that’s known as a life settlement. In some cases, policy holders may be able to obtain up to four times the amount of the cash surrender value for their policy.

Ensuring That Your Plan is In Tact

Today, it is likely that many people will become a care provider at some point in their lives. So, it is best to be prepared. In order to be as ready as possible, it is always best to have a plan in place. We can help you to develop the one that will work the best for you. Contact us for more information.





  1. The Expanding Circle of Care. Beyond Dollars 2015. Genworth. (