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Why retirees should buy long-term care insurance

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There are quite a few reasons why retirees may want to consider a long-term care insurance policy. Getty Images

Retirement marks a significant milestone in one's life, symbolizing the culmination of years of hard work and dedication. However, as retirees bask in the newfound freedom of their golden years, it's crucial to address the potential challenges that may arise, especially when it comes to healthcare needs. 

For example, as they age, many retirees will need long-term care at some point or another. Long-term care refers to the medical, personal and social services that are used to help people who can no longer complete their daily tasks without extra support. Research shows that about 70% of older Americans will need this type of care at some point, but as you may imagine, these types of services don't come cheap. Depending on the type of care required, the average cost of long-term care services can range from tens of thousands to hundreds of thousands of dollars per year.

That's part of why long-term care insurance is an essential consideration for most people — retirees included. This type of coverage provides a financial safety net that can protect retirees' nest eggs from big losses due to long-term care, ultimately helping to ensure a comfortable and secure retirement.

Explore your long-term care insurance options online here.

Why retirees should buy long-term care insurance

There are a few different reasons why retirees may want to consider buying long-term care insurance, including:

The rising need for long-term care

As life expectancy continues to increase, so does the likelihood of facing health issues that may require long-term care. The reality is that many retirees may find themselves in need of assistance with daily activities such as bathing, dressing and eating due to age-related illnesses or chronic conditions. And, long-term care insurance can step in to cover the costs associated with these services, offering peace of mind and financial security.

Find out more about how long-term care insurance could protect your retirement funds.

To protect assets

One of the primary reasons retirees may want to consider long-term care insurance is its ability to safeguard their hard-earned assets. Without adequate coverage, the high costs of long-term care services can quickly deplete savings and retirement funds. 

By investing in a long-term care insurance policy, though, retirees can protect their assets from being eroded by the substantial expenses associated with nursing homes, assisted living facilities and in-home care services. For example, the average private nursing home room had a price tag of $8,910 per month in 2021, according to Genworth, while a semi-private room averaged about $7,800 per month. With those types of costs, it may not take long for long-term care expenses to deplete the average retiree's savings. 

To maintain independence

Retirees often prioritize maintaining their independence and staying in their homes as they age. Long-term care insurance can facilitate this goal by covering the expenses of home healthcare services. Whether it's hiring a caregiver, modifying the home for accessibility or obtaining medical equipment, this type of insurance can provide the necessary financial support to enable retirees to age in place comfortably.

To reduce the burden on loved ones

Long-term care insurance not only benefits retirees but also eases the burden on their loved ones. Family members may struggle emotionally, physically and financially when faced with the responsibility of providing care for an aging relative. 

But long-term care insurance helps alleviate this burden by covering the costs of professional caregivers. This allows family members to focus on providing emotional support rather than shouldering the entire caregiving responsibility.

For cost-efficiency and early planning

One common misconception is that long-term care insurance is prohibitively expensive. However, the cost of coverage is generally more affordable when purchased at a younger age. By planning for long-term care insurance in advance, retirees can secure more cost-effective policies, ensuring comprehensive coverage without draining their retirement funds.

How to determine whether you need long term care insurance

While long-term care insurance can be a valuable asset, it may not be necessary for everyone. Here are key factors to consider when determining if you need long-term care insurance:

  • Evaluate your assets: Take stock of your savings, investments and other financial resources. Consider how much you could comfortably allocate to cover potential long-term care costs without compromising your overall financial security.
  • Assess family dynamics: Consider the availability and willingness of family members to provide caregiving assistance. While long-term care insurance can ease the burden on loved ones, some may have a robust support system in place.
  • Examine your health: Assess your current health status and family medical history. Individuals with a family history of chronic conditions or a higher likelihood of health issues may find long-term care insurance more beneficial.
  • Research local costs: Investigate the costs of long-term care services in your area. Understand the expenses associated with nursing homes, assisted living facilities and in-home care to gauge the potential financial impact on your savings.
  • Assess your risk tolerance: Consider your comfort level with risk. Long-term care insurance provides a safety net, offering financial protection against unforeseen health issues. If you prefer a more secure approach to your retirement, long-term care insurance may be a suitable option.
  • Clarify your preferences: Reflect on your preferences for aging. If you prioritize aging in place and maintaining independence, long-term care insurance can support these goals by covering home healthcare costs.
  • Evaluate premium costs: Examine the affordability of long-term care insurance premiums within your budget. Keep in mind that purchasing coverage at a younger age often results in lower premiums.

The bottom line

As retirees embark on the journey of their golden years, the importance of long-term care insurance cannot be overstated. By proactively addressing potential health challenges and securing financial protection, retirees can enjoy their golden years with confidence and independence. After all, long-term care insurance is not just an investment in one's health; it's an investment in a secure and worry-free retirement.

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