The only thing worse than losing a loved one is watching their slow decline. The man who was once "Superman" to his children can suddenly meet his own kind of kryptonite — a serious health challenge. The woman who could bake a cake from scratch without glancing at a recipe may one day struggle to tie her shoes or remember why she walked into the living room. Long-term care isn't just a devastating experience for the person in need — it can be emotionally and financially draining for the family members who step in to help. The best word to describe someone who requires long-term care is often "frail." And frailty isn't limited to mental decline — it can also come from physical deterioration over time.
Understanding Long-Term Care and Activities of Daily Living (ADLs)
The medical community defines Activities of Daily Living
(ADLs) as the six essential tasks that determine a person's ability to live
independently:
- Feeding
- The ability to eat unassisted
- Dressing
- The ability to put on and take off clothing
- Transferring
- The ability to move from a bed to a chair
- Bathing
- The ability to maintain personal hygiene
- Toileting
- The ability to get on and off the toilet unassisted
- Continence - The ability to control bladder and bowel functions
If an individual loses the ability to perform two or more of these six ADLs, they qualify for long-term care. The only exception is when someone is diagnosed with a cognitive condition such as Alzheimer's or dementia. In those cases, even if they can technically perform these activities, they may still require assistance because they cannot live independently.
The Financial Reality of Long-Term Care
November is Long-Term Care Awareness Month, a timely
reminder for families to review their personal financial situations and discuss
how they'd handle this serious — and often expensive — possibility.
In the United States, approximately 10% of all medical
expenses occur during the final year of life. Even more striking, over 60% of
those costs are tied to long-term care, including nursing homes and in-home
health services.
For most families, the two biggest challenges are deciding when to move a loved one into a care facility and figuring out how to pay for it. Unfortunately, Medicare — the program many people rely on in retirement — does not cover most long-term care needs.
What Medicare and Medicaid Really Cover
Medicare provides critical coverage for major medical needs
such as hospital visits, doctor appointments, and hospice care. However, it
does not pay for assisted living, nursing homes, or ongoing in-home health
care.
Medicaid, on the other hand, can cover these costs —
but only for individuals who are financially destitute. A common misconception
is that people must sell their homes to qualify. That's not true. But they do
need to have very few assets in their name.
Additionally, there's a five-year "look-back" period on any
gifted assets. So if someone transfers money to family members in hopes of
qualifying for Medicaid, those funds can still be counted against them.
For everyone else — those who don't qualify for Medicaid — there are only three main ways to pay for long-term care.
- Cash
and Investments
This is the most common method. Families often liquidate
investments, CDs, or savings accounts and combine those funds with Social
Security or pension income to pay for care.
While straightforward, this approach comes with serious downsides — such as unexpected taxes, penalties, and the rapid depletion of retirement savings. Without a solid plan, these costs can quickly erode a family's financial stability.
- Traditional Long-Term Care Insurance
If you already have a traditional long-term care (LTC)
policy, it's important to review it with a financial advisor or Certified
Financial Planner™. These older policies can still provide excellent benefits,
but it's essential to ensure the coverage, premiums, and terms still fit your
current needs.
For those without an existing policy, new traditional LTC plans are becoming harder to find and often more expensive. Still, an advisor can help you determine if this route is right for your situation.
- Hybrid
Life Insurance or Annuity Plans
The most flexible and increasingly popular option is a
hybrid life insurance or annuity plan with built-in long-term care protection.
Unlike traditional LTC policies, hybrid plans provide a
death benefit or remaining cash value to beneficiaries if the long-term care
coverage isn't used. This ensures your investment benefits your loved ones no
matter what happens.
For younger individuals, hybrid plans also tend to be more affordable and allow you to lock in both life and long-term care protection early — before health changes make coverage difficult to obtain.
Why Planning Ahead Matters
Beyond the financial burden, long-term care often creates
emotional strain among family members. When the time comes to make difficult
decisions, families can struggle to agree — some want to move a loved one into
professional care quickly, while others try to delay in hopes of saving money.
A long-term care policy eliminates much of that stress. It's
a way for parents or loved ones to say, "It's okay to move me into a
facility — I've already taken care of it."
The greatest gift you can give your family is clarity and preparation. Having a plan in place means your loved ones don't have to debate whether it's financially possible to hire in-home care or find a quality nursing facility. They'll know your wishes — and that you've already provided the resources to make them happen.
Start the Conversation This November
Long-term care planning isn't just about anticipating
decline; it's about preserving dignity, control, and peace of mind for yourself
and those you love.
This Long-Term Care Awareness Month, take time to discuss
this topic with your family before the holiday season begins. Review your
existing plans and contact us about how to safeguard your future and your
family's financial well-being.
