Options for Funding

a Long-Term Care Plan

When self-funding or relying on the federal government for funding long-term care is not an option (the case for many), then the best way to pay for care is with long-term care insurance. It can provide an income stream that is separate from the income needed to meet other financial commitments. Transferring the risk of costly long-term care to an insurance company can do the following.

  • Create a reliable stream of income that is dedicated to providing your care
  • Protect your primary source of income and the financial goals you have established
  • Give your loved ones the ability to supervise your care, rather than provide it, which has the added benefit of allowing them to retain their relationship with you as spouse, partner, daughter, son, etc. rather than being consumed by the role of caregiver

The world of long-term care insurance has expanded greatly in the past several years. In addition to what is termed Traditional Long-Term Care insurance (T-LTCi) that pays benefits only for a long-term care need, there are life insurance and annuity policies that embed long-term care benefits.

For a high-level overview of the types of private insurance available in the market as well as how LTCi is regulated, the appeal of State Partnership Plans and the tax advantages for Long-Term Care Insurance, click the link below to read “Straight Talk About Common Misperceptions: Transferring the Risk”.


Total LTCI incurred claims from 1991- 2020 9


A caregiver’s average lifetime estimated loss in wages and benefits 10

It’s really an enormous financial bomb sitting out there that most people are just hoping won’t hit them, said Marc A Cohen, co-director of the LeadingAge LTSS Center at the University of Massachusetts at Boston. There’s an incredible amount of confusion and denial.11

9 Claude Thau, Allen Schmitz, FSA, MAAA and Chris Giese, FSA, MAAA, 2022 Milliman Long Term Care Insurance Survey of Stand-Alone Long-Term Care Insurance (LTCI), July 2022
10 Long-Term Care.gov, “Who Will Provide Your Care?”, February 2020
11 Lauren Popham, PhD; Susan Silberman, PhD; and Liz Berke, PhD, National Council on Aging, Jane Tavares, PhD and Marc Cohen, PhD, LeadingAge LTSS Center @ UMass Boston, “The True Scope of Financial Insecurity in Retirement”, 2020