Long-Term Care Insurance: Protecting Families and Securing Futures

The Rising Need for Long-Term Care

Healthcare advancements mean Americans are living longer, but longevity also brings increased chances of needing extended care. According to the U.S. Department of Health and Human Services (2023), about 70% of adults aged 65 and older will require some form of long-term care in their lifetime. The costs are staggering: Genworth’s 2023 Cost of Care Survey reports that the average annual cost of a private nursing home room is over $108,000, while assisted living averages around $54,000.

Without a plan, these expenses often fall on families, draining retirement savings or forcing difficult financial choices. LTCI steps in as a buffer, helping families focus on care, not costs.

Benefits of Long-Term Care Insurance for Families

1. Protects Savings and Assets

Long-Term Care helps prevent families from draining their savings or dipping into assets meant for other purposes (retirement, inheritance, education). Without LTC coverage, care costs can quickly devour wealth built over decades.

A study from the China Health and Retirement Longitudinal Study (CHARLS) found that when LTCI was introduced, elderly households had significantly reduced medical and healthcare expenditures, even as total spending rose (i.e. money freed up from acute medical care could be used elsewhere).

These findings suggest LTCI acts as a buffer: reducing sudden, large medical outlays that would otherwise eat into savings and assets.

2. Reduces Emotional and Financial Stress

Caring for a family member without formal care insurance involves not just financial cost, but emotional and physical burdens, often leading to burnout, health issues, and reduced quality of life for caregivers.

AARP's 2021 Caregiving Out-of-Pocket Costs Study finds that U.S. family caregivers incur, on average, $7,242/year for caregiving-related expenses. These out-of-pocket costs add up, and caregivers spend about 26% of their income on these activities.

These stresses affect not just finances, but relationships, mental health, and the ability to work or maintain long-term financial goals. LTCI mitigates these by ensuring care is funded through insurance rather than emergency reactions.

3. Provides Flexibility of Care Options

A study out of UNSW Sydney and CEPAR (Australia) looked at “flexible long-term care insurance” and found strong demand among pre-retirees: about 75% of the sample (1,008 people) selected some form of LTC cover when given options that included income-type benefits for care or support to informal caregivers.

This supports the compelling advantages of LTCI that many policies allow the insured or their family to choose from several care settings and formats whether it’s in-home help, adult day care services, assisted living, or nursing facilities. This flexibility matters, both for comfort and cost. Hence, Flexibility helps families align care with comfort, culture, personal preference, and budget, instead of being forced into least costly or least desired options.

4. Supports Intergenerational Stability

Without Long-Term Care Insurance, children or adult family members often become unpaid caregivers, or are forced to reduce work hours or leave jobs. This can erode their own financial security, delay retirement, or diminish their ability to provide for their own families.

LTCI therefore allows adult children to avoid sacrificing their own finances or careers, supporting stability across generations rather than passing burden.

Why Planning Early Matters

Long-Term Care Insurance is most affordable and accessible when purchased before it’s needed, typically in your 50s or early 60s. Waiting until health conditions appear may make coverage costly or unavailable. By planning early, families can lock in lower premiums and secure long-term protection.

Reference:

AARP. (2021). Caregiving out-of-pocket costs: 2021 report. AARP Public Policy Institute. https://www.aarp.org/pri/topics/ltss/family-caregiving/family-caregivers-cost-survey/

Center of Excellence in Population Ageing Research (CEPAR). (2021, November 23). Flexible insurance for long-term care: A study of stated preferences. UNSW Sydney. https://www.cepar.edu.au/news-events/news/flexible-insurance-long-term-care-study-stated-preferences

Wang, X., Zhang, L., Liu, H., Zhao, Y., & Dong, K. (2025). Impact of long-term care insurance on the health expenditure of the elderly: Evidence from the China Health and Retirement Longitudinal Study. Frontiers in Public Health, 13, 1498772. https://doi.org/10.3389/fpubh.2025.1498772