Chance of being in a car accident:

1 in 2401

Chance of needing long-term care:

1 in 21

Private Health Insurance

Only pays for skilled care, where the patient shows signs of improvement.


Covers the costs of long-term care temporarily, up to 100 days in a skilled nursing facility after a hospitalization of three days or more, after a three consecutive day stay under treatment in a hospital. After 20 days, the patient incurs a $144.50 co-pay (2012).


Requires a person to be indigent, with $2,000 or less in assets (depending on the state), to receive long-term care.

Social Security

Does not provide any sort of special funding.

Bob mentioned his concerns to his insurance professional and found out that he could purchase a life insurance policy on his mother with a long-term care rider. Bob would be the owner and beneficiary on the policy and his mother would be the insured. If his mother needs care, the long-term care will be paid to Bob as the policyowner. He could then pay his mother’s bills directly to the service or facility, which will avoid gift tax via the medical exclusion. If his mom never needs long-term care, Bob will receive the death benefit from the policy. Bob feels this is an efficient way to fund his mom’s potential long-term care costs without jeopardizing his other financial obligations.

Bob is saving for both retirement and college expenses for his children. He’d also like to have a plan for his mother to cover long-term care expenses if she ever needed care. With his other obligations, Bob may not be able to help her financially and he doesn’t want her to have to rely on government assistance - which would require her to spend down her assets and limit her options for care.

Now Shelly’s worried about the impact a similar situation could have on her own children. She decides to call her insurance professional, and learns about a product using life insurance with a long-term care rider. The death benefit can be accelerated on a monthly basis to help pay for long-term care expenses, but if not needed or entirely depleted, will provide a death benefit for her beneficiaries. Now Shelly feels confident that her children won’t have to face the same challenges she did.

Shelly's mother recently lost her battle with Parkinson’s Disease. She was unable to live alone for the last three years of her life, so she lived with Shelly. Shelly’s brothers both live out of town, making her the primary caregiver. This new role wore on Shelly physically and emotionally - she even had to pass up the promotion she’d been working toward for years. Shelly’s parents never planned for long-term care expenses, feeling the additional coverage was a waste of money. But Shelly sees how helpful long-term care coverage would have been for her mom. Having the money to hire help would have given Shelly the opportunity to continue her career path.

Average cost of home health care: $21 per hour6

Average cost of Adult Day Care: $70 per day6