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A nursing home costs $100K-$150K per year. Without a plan, 3 years of care can destroy $300K-$500K in retirement savings.
70%
Need LTC After 65
Will need some form of care
$108K/yr
Nursing Home Cost
National median (2024)
2.5 yrs
Average Stay
Total cost: $270K
100 days
Medicare Covers
Then you're on your own
Medicare Does NOT Cover Long-Term Care
LTC Funding Strategies
| Feature | Cost | Best For |
|---|---|---|
| Traditional LTC Insurance | $2,000-$5,000/yr | Use-it-or-lose-it. Premiums can increase. |
| Hybrid Life/LTC Policy | $50K-$150K lump sum | Death benefit OR LTC. Money never lost. |
| Self-Insure | $300K-$500K earmarked | High net worth ($2M+) only |
| Medicaid (Last Resort) | Must spend down to $2K | Requires poverty. Limited facility choice. |
| Short-Term Care Policy | $1,000-$2,000/yr | Covers 1 year. Bridges to other funding. |
Research & Plan
Understand costs. Decide strategy: insurance, hybrid, or self-insure.
Best Time to Buy
Healthy = lowest premiums. Locked in for life. Don't wait for health issues.
Still Possible
Premiums 50-100% higher than at 50. May face health exclusions.
Often Too Late
Very expensive or uninsurable. Must self-insure or rely on Medicaid.
Determine Daily Benefit
$150-$300/day. Match to your area's nursing home costs.
Choose Benefit Period
3-5 years covers most stays. Unlimited is expensive and rarely needed.
Add Inflation Protection
3% compound inflation rider. Costs more but critical — care costs rise 5%/year.
Consider Hybrid Policy
Pay $100K lump sum. Get $300K+ LTC benefit OR death benefit. Money never wasted.
Buy as a Couple
Shared-care riders let couples share a pool of benefits. 10-30% discount.
The Hybrid Advantage
Key Takeaways