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November is Long-Term Care Awareness month. Long-term care refers to a variety of different services aimed at keeping individuals independent for as long as possible. Services could be provided in a home setting, adult day care center, assisted living facility or even nursing home. Planning for long-term care is an important aspect of preparing for your future. Your long-term care plan should address how you will pay for a such an event. Here’s a few things to keep in mind:

  • 70% of individuals over age 65 will have a long-term care event.1
  • Of the 70%, 1 in 5 will require long-term care for more than 5 years. 1
  • The average stay for a man is 2.2 years and for a woman 3.7 years.1
  • The average stay for an individual with Alzheimer’s is 8 years.2

The best way to protect your family from the potential devastation of long-term care is to plan ahead to mitigate the risks. There are many ways to protect your assets from a long-term care event, the two most common are self-funding and insurance. If you plan to self-fund, i.e. use existing assets to pay for your long-term care, it’s important to communicate with your family and HKFS financial planning consultant to make sure everyone is on the same page regarding what assets should be utilized. If using insurance to protect your risk, it’s important to note there are many different types of policies available that can help protect your assets from an extended long-term care event.

If you decide insurance is the most appropriate solution for your needs, keep these five cost saving ideas in mind:

  1. Buy the policy early. Long-term care insurance rates are based upon age.  The younger you are when you apply, the lower the cost will be. Additionally, the cost of waiting to buy a policy can be significant, especially when taking inflation into account.
  2. Receive a health discount. Based on your health history, you may be able to save up to 50% on your premium payments. The healthier you are, the more you can save.
  3. Apply for long-term care insurance with a spouse or partner. Most insurance companies offer a discount when applying for coverage with another individual. These savings can range up to 20% to 40%, depending on the carrier.
  4. Shop for the most cost-efficient policy. It can make sense to shop multiple insurance companies to find the most cost-effective policy. Prices can vary dramatically from one carrier to another thus finding the right carrier can help you save up to 50%. In addition to cost, it’s important to find a long-term care plan that meets your specific needs.

Thinking about how you will protect your family from a long-term care event can be overwhelming. However, begin to factor the potential cost of long-term care into your retirement plan and make incremental progress toward your goal over time. Also, working with a financial planning consultant can help provide clarity regarding the various long-term care insurance options and which solution might be the most appropriate for your situation.

Long-term care planning is not about you, it’s about your loved ones. Have a plan.


1How much care will you need – U.S. Department of Health
2Alzheimer Association 2017, Alzheimer’s Facts and Figures