Planning to Self-Fund Long-Term Care? There May Be Another Way.
Many retirees assume they'll pay for future long-term care directly from their savings. But certain planning strategies may allow you to reposition a portion of existing assets to potentially create a larger pool of benefits for qualifying care expenses—while preserving other benefits if care is never needed.
Long-Term Care Planning Isn't One-Size-Fits-All.
There’s more than one way to plan for potential long-term care needs. Different approaches come with different eligibility rules, premiums or funding requirements, coverage limits, inflation protection options, benefit triggers, tax treatment, and product availability.
No single solution is right for everyone. The goal is to understand which options may fit your situation, your health, and your goals for yourself and your family.
Self-funding from existing savings
Paying directly from your own assets, with full control but also full responsibility for how long those funds may need to last.
Traditional long-term care insurance
Policies designed specifically to pay benefits for qualifying long-term care expenses, typically funded with ongoing premiums and subject to underwriting and contract provisions.
Hybrid life insurance with benefits
Life insurance policies that may provide long-term care benefits if care is needed, or life insurance benefits if it is not, subject to policy terms and conditions.
Asset-based or annuity solutions
Strategies that reposition existing assets into products designed to provide long-term care benefits, often with contract values, income features, or other benefits depending on how the product is structured.
Other available resources
Government programs, community resources, family support, and integrated planning with your broader retirement, tax, and estate strategies.
Future Care Considerations
Thoughtful planning allows you to evaluate which combination of strategies may help you prepare for potential care needs while still supporting your other retirement goals.
Long-term care insurance eligibility, premiums, benefits, and tax treatment vary by product and carrier. Not every strategy is appropriate for every person. Reviewing options with qualified professionals can help you understand what may fit your circumstances.
What if I never need long-term care?
Many asset-based or hybrid strategies are designed so that if care is never needed, the value can pass to your beneficiaries as a death benefit or remain as contract value, depending on the specific product terms.
Can I use existing savings to fund a long-term care strategy?
Yes, certain planning strategies are built specifically to reposition existing assets—such as idle cash, CDs, or even portions of qualified accounts—into purpose-built solutions for care expenses.
Does long-term care insurance only cover nursing homes?
No. Most modern solutions are designed to cover qualifying care in a variety of settings, including your own home, assisted living facilities, and adult day care centers, as well as skilled nursing facilities.
What is the difference between traditional and hybrid long-term care insurance?
Traditional insurance typically requires ongoing premiums and offers no value if care isn't used. Hybrid solutions combine care benefits with life insurance or an annuity, often providing a death benefit or cash value if you never need care.
Can I access my money if my circumstances change?
Many asset-based solutions provide some level of liquidity or a return-of-premium feature, though access to funds may be subject to specific contract charges, restrictions, or a reduction in future benefits.
What happens if I have existing health conditions?
Eligibility varies significantly by product. While traditional insurance has strict health requirements, some asset-based and annuity-linked solutions offer different underwriting standards or simplified processes.
Could Your Existing Assets Be Working Harder for Your Future Care Needs?
You may already have savings earmarked for emergencies or future healthcare expenses. A long-term care planning conversation can help you explore how different strategies compare—and whether repositioning assets makes sense for your circumstances.
Long-term care benefits, eligibility, costs, and access to funds depend on specific policy provisions and individual circumstances. Product features and availability vary by carrier and state. Consult your tax, legal, and insurance professionals before making decisions.