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Cost of Long-Term Care

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Paying For The Cost of Long-Term Care

You’ve worked long and hard to make sure you and your family have financial security. And, you’ve done what you can to prepare for the surprises that the future might hold. But, even the most well-thought-out strategy may not be enough to prepare you for the potential unexpected cost of long-term care.

With Americans living longer than ever, most of us will need some extra help with everyday activities as we age. Today, we’re going to explore statistics related to long-term care, and ways of potentially covering its cost.

Long-Term Care Statistics

The duration and level of long-term care vary from person to person, obviously. And, additionally, your needs change over time. Here are some statistics you should consider:

  • Someone turning 65 has nearly a 70% chance of needing some form of long-term care
  • Women, on average, need it for longer than men: 2.2 years for men, 3.7 years for women
  • 20% of today’s 65-year-olds will need it for longer than 5 years

How Much Is the Cost of Long-Term Care?

It’s important to know the impact that just a few years of long-term care can have financially. You can’t predict whether or not you’ll need it, or for how long. For this reason, it’s important to be prepared for if you do. Here’s some info about the cost of long-term care.

  • The average cost of a year’s care in a private, Medicare-certified, long-term nursing home is $107,000
  • The average cost of living in an assisted living care facility is $57,000 per year
  • The cost of in-home care for a year, for 40 hours of help per week, is $50,918

Learn Your Options

Here are some more details regarding your options for long-term care. Also, before you make any decisions, make sure you understand your options and have talked to people you trust about it. Talk to your family, your doctor or other health provider, or a social worker for help.


Medicaid may cover some services, such as:

  • Home care (cooking, cleaning, help with other daily activities)
  • Home health services (such as physical therapy or skilled nursing care)
  • Transportation to medical care
  • Respite care
  • Hospice
  • Case Management

It’s important to note that Medicaid programs vary from state to state. Medicaid may offer more services in your specific state. Call your Medicaid office for more information. These types of services may also be available through other programs, such as Area Agency on Aging or Medicare.

However, it’s also important to note how Medicare works. Medicare may cover a maximum of 100 days of services after a hospital stay. Coverage is designed to assist people during a short-term recovery, and doesn’t include personal care or supervision services.

Subsidized Senior Housing

There are state and federal programs that help to pay for housing for some seniors with low to moderate incomes. Some of these housing programs also offer help with meals, and potentially things like housekeeping, shopping, and doing laundry. Residents usually live in their own apartments within an apartment building. Rent payments are based on a certain percentage of the person’s income.

Hospice and Respite Care

Hospice is a program of care and support for terminally ill individuals. The focus is on helping people with terminal illnesses live more comfortably. Respite care, meanwhile, is a very short inpatient stay given to a hospice patient, so that their usual caregiver can rest.

Group Living Arrangements

Residential care communities, also known as personal care homes, and assisted living communities, are examples of group living arrangements. The benefit of group living arrangements is that they can help you with some of the activities of daily living that you might have trouble with as you get older. Whether they offer nursing services or not, or if they help with medications, varies state by state. In most cases, residents of these communities pay a regular monthly rent and additional fees depending on the type of personal care and services they get.

PACE (Program of All-Inclusive Care For the Elderly)

PACE (program of all-inclusive care for the elderly) is a Medicare or Medicaid program that helps people meet healthcare needs in a community.

You can visit for more information and resources to help you and your family plan for the possibility of needing long-term care sometime in the future.

Can You Pay For Long-Term Care with an IUL?

Do you have a life insurance policy set up currently? You may not realize it, but purchasing the right type of life insurance policy might be a way of covering the cost of long-term care. For example, borrowing money from your IUL (indexed universal life) insurance policy, may be a way of covering costs. And, the great thing about this method is that if you don’t end up needing long-term care after all, there are other potential uses to having that money stashed away in an IUL.

A major benefit of an IUL is that it offers potentially tax-free income, which you can access at any time. This is a benefit it has over more traditional types of retirement accounts. Additionally, it has no contribution limit, and the money in it would be unaffected in the event of a stock market drop, which might be particularly useful given the state of the economy right now.

Purchasing IUL insurance and adding a long-term care rider is one of the multiple efficient ways to pay off the cost of long-term care. Contact us to learn more about this potential strategy: We’re here to help.

Sources:,, AARP.

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