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Long Term Care Solutions

The odds are that at some point in your life, you’ll need long term care. Long term care is defined as sub-acute care that is required because an individual has a prolonged illness or injury and needs help from others in order to live. One may need assistance in order to perform two or more activities of daily living (bathing, continence, dressing, eating, toileting or transferring), and/or one may need supervision due to cognitive impairment. Unlike other types of health insurance, LTCI covers the costs of care in any home or facility by a professional caregiver.

The key to proper long term care planning is to plan now rather than react later when your options are limited.

There are numerous insurance strategies designed to help preserve your assets and you retirement income. 

Long Term Care Insurance Policy

A standard Long-Term Care Insurance policy can be designed to fit most anyone’s budget.  Similar to other types of insurance, you will pay a premium for a predetermined amount of long term care benefits.

This predetermined amount of benefits is called a “Pool of Money” and it is calculated by selecting a “Benefit Amount” and a “Benefit Period”.

For example, if you want a policy that covers $ 6,000 per month of home care or assisted living, and you want there to be enough money in the plan to cover about 10 years of care, your policy would have a “Pool of Money” of $ 720,000 ($6,000/month Benefit Amount x 10 year Benefit Period = $ 720,000 Pool of Money)

This type of policy pays benefits for as long as dollars remain available in your pool.  Let’s say you used only 5,000 per month for care at home.  Your policy would then last for 12 years.

A 55 year old, married and in good health, would expect to pay $ 155 per month for this policy.

Inflation Protection

Today, leading insurers offer a variety of options to deal with future increases in the cost of care.

A Guaranteed Purchase Option Rider allows you to purchase additional coverage periodically without having to meet future health requirements.

CPI Inflation Coverage adjusts your policy limits on a compounded basis, according to increases in the Consumer Price Index (CPI).

5% Simple Inflation Protection increases your benefits by 5% of the original amount every year.

5% Compound Inflation Protection increases your benefits by 5% compounded annually.

An individual that can contribute to the cost of his or her own care may decide against purchasing an inflation rider.  This individual would be self insured for increasing care costs.

Alternative Long Term Care Planning Solutions

A popular alternative to a standard Long Term Care Insurance policy is a combination Life Insurance Policy or Annuity with a Long Term Care rider.  These types of policies are referred to as “hybrid” or linked policies.  They are tailored to meet the concern about paying premiums for a long term care event that may never occur. 

These combination policies have gained popularity because:

  • Home Care, Assisted Living, Skilled Nursing Benefits
  • Unused long term care benefits go to heirs in the form of a death benefit
  • Premiums are guaranteed

Policy details for a mid range policy that covers both spouses, age 55

Total long term care benefit


Monthly benefit for home care, assisted living, nursing home, Alzheimers


Death benefit that will pass on to heirs if the long term care is not used


Total monthly premium includes both spouses (guaranteed not to increase)


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  American Association for Long Term Care Insurance National LTC Network Member California Partnership for Long-Term Care California CAre Planning Council