Insurance for the Future:
Planning and Paying for Long-Term Care

Long-term care is a future that no one dreams of, but that won’t prevent it from coming true. Seniors are at the highest risk of needing assistance in at least two daily living activities. In fact, the lifetime probability for people over 65 needing long-term care is 68 percent. As we get older, having a plan in place means we are more prepared for independence, security and safety, not just for ourselves, but also our loved ones.

Thinking about the possibility of long-term care can make most of us feel anxious about finances or melancholy about growing older. However, asking the right questions now can give you peace of mind for the future.

What questions should I ask when planning for long-term care?

• Is it important that my family and friends understand my wishes if decisions have to be made about independent living, assisted living or in-home care? Good planning involves picking out the type of care facility you’d be comfortable in.
• Are there lifestyle changes that I could make to keep myself healthier now and in the future? If you’ve been putting off starting an exercise plan or quitting smoking, now is the time to make those a priority. Quitting smoking alone can add six to eight years to your life.
• Do I have dependents who will be comfortable making decisions for me? Planning involves proximity. You may want to be closer to family, and a move is much easier to make when you are healthy.
• Does or did anyone in my family have a cognitive condition such as dementia or Alzheimer’s? Nearly 6 million people over the age of 65 suffer from Alzheimer’s disease. A plan for long-term care can help you manage the severity of the illness.
• Can I live independently in my home? Planning means understanding the responsibilities you can handle. If your home is big and you are often alone, you should have a plan for keeping up with the cleaning and maintenance, including the yard and exterior.
• Are there modifications I can make in my home now that will reduce my risk of injury? Stairs, bathrooms and kitchens are all places where the most home accidents happen. A senior can go from perfectly healthy to deteriorating due to a slip or a fall. In fact, falls are the leading cause of death from injury among people over 65.

The choices you make right now will impact the degree to which you need — and are prepared for — your future care. It’s a complex process that involves looking at what you have and need now, as well as all your potential needs for the future. That’s why a major component of preparing for long-term care is planning on how to pay for it.

What questions should I ask about paying for long-term care?

• When do I plan on retiring? Knowing when you will retire helps you understand what you can afford and how long you’ll need to continue working to set aside those funds.
• Will Medicare cover the costs of my needs? Medicare might not cover certain aspects of long-term care, but in many cases, it will cover short stays in a care facility if an emergency arises; if you don’t already have a plan, you should seriously consider signing up for one (this helpful guide will help you navigate the extensive Medicare.gov site). Still, a lot of what Medicare covers depends on how much expendable income you have, so also look into purchasing supplemental health insurance plans to help pay for care.
• What kind of insurance policies should I have? You can purchase long-term care insurance (but the sooner you do it, the cheaper it will be!) or add a rider to a current life insurance policy. Also consider settling a life insurance policy for extra — and immediate — cash in hand to pay for care, modifications or medical equipment.
• How can my investments help pay for long-term care? You may be able to dip into dividends from your investments. Similarly, consider starting an FSA (flexible spending account) now so you can apply pre-tax dollars to your health needs. Don’t forget to take advantage of any veterans’ benefits you or a family member may have access to.

Planning and paying for long-term care is complex, which is why it’s crucial that people starting to prepare for retirement also examine these potential situations in tandem. From making healthier life choices to looking into life insurance policies, you can take the process one step at a time by preparing for long-term care long before you ever need it.