For many Americans, having access to crucial information about their available options can greatly influence their own lives and the well-being of their loved ones.

Long-term care includes a wide range of services designed to meet health and personal care needs, particularly for those requiring assistance with Activities of Daily Living (ADLs) such as eating, dressing, and bathing.

According to a 2023 study by Lincoln Financial and Versta Research, 96% of American adults recognize the importance of planning for long-term care. However, only 19% have taken concrete steps toward securing a plan. Several factors contribute to this significant gap between awareness and action.

The survey highlights a common issue: many people make incorrect assumptions about their long-term care needs, often underestimating the actual costs involved. In fact, respondents’ cost estimates were often less than half of the real expenses.

Additionally, the landscape of long-term care solutions has evolved in recent years, introducing alternatives to traditional plans—yet many individuals remain unaware of these newer options. This article will explore the frequently misunderstood aspects of long-term care planning and shed light on available solutions.

Debunking Myths About Long-Term Care

Myth #1: “It won’t happen to me.”

Reality: People often underestimate their personal risk. Data from a 2020 Lincoln Financial survey showed that while 54% of respondents expected a parent to need long-term care, only 32% believed they would require it themselves.

Myth #2: “Medicare or Medicaid will cover my needs.”

Reality: Coverage under Medicare and Medicaid is limited. Medicare typically does not provide long-term care benefits, and Medicaid only covers certain services, often restricting personal choices. Yet, 66% of survey respondents who anticipate long-term care costs expect to rely on Medicare, Medicaid, or health insurance—despite these limitations.

Myth #3: “I have enough savings to handle it.”

Reality: Many individuals underestimate the financial burden of long-term care. An unexpected need for care could deplete savings at twice the anticipated rate. National data from 2020 shows that home care services can cost over $4,100 per month, while skilled nursing facilities may exceed $8,800 per month.

Myth #4: “My family will take care of me.”

Reality: Family caregiving, particularly by women, often leads to emotional and financial strain. Those caring for ill parents are twice as likely to suffer from anxiety or depression. Nearly 80% of survey participants expressed concerns about their ability to provide adequate care for a family member in need.

Traditional vs. Alternative Long-Term Care Solutions

One reason some hesitate to invest in long-term care insurance is the possibility that the funds may go unused. Traditional long-term care (LTC) policies operate on a use-it-or-lose-it basis.

However, new alternatives have emerged, offering greater flexibility while still providing financial protection if long-term care becomes necessary.

For example, some annuities and life insurance policies include long-term care riders, which offer additional benefits without requiring a separate LTC policy. Unlike traditional plans, certain life insurance policies allow access to the full cash value under specific conditions, such as a terminal illness diagnosis or residency in a care facility.

Additionally, some annuities provide options that can double or even triple their value from the start, earmarking the funds for long-term care expenses.

Taking the Next Step

The first and most crucial step in long-term care planning is initiating conversations with family members. With a variety of options available, making an informed decision often requires collaboration with loved ones and financial professionals.

Sources:
Lincoln Financial “Planning for Long-Term Care” Survey (October 2020)
“2020 Lincoln Financial Cost of Care Survey” (March 2020)
Lincoln Financial Group 2023 LTC Marketing and Thought Leadership Research

Disclosures: Insurance products involve fees, are subject to underwriting, and are best reviewed as part of a comprehensive financial plan. This material is intended for informational purposes only and is not a solicitation to purchase any specific product.