Long-term care myths that could cost your family more than you think

If long-term care isn't on your radar, it may be because you think it's too expensive, or it’s something you'll deal with later. Many people assume they have plenty of time to think about it, or that their savings, existing benefits, or family support will be enough if they ever need care.

The reality is that many people make decisions about long-term care based on assumptions, not facts. You may have an idea of what long-term care costs, who would provide care, or how those expenses would be covered, but those assumptions don't always hold up in real life.

That's important because long-term care can affect more than your finances. It can also affect the people you love and the choices available to you if you need care later in life. Long-term care can include assistance with everyday activities such as bathing, dressing, and eating. Depending on a person's needs, they may receive care at home, in an assisted living community, or in a nursing facility.

A recent Nationwide Retirement Institute^® survey uncovered several common misconceptions about long-term care planning, coverage, and caregiving. Understanding the reality behind these myths can help you make more informed decisions, identify potential gaps in your planning, and have more productive conversations with your family and financial professional about the future.

Myth #1: Long-term care coverage is probably too expensive to even consider.

Consumers often overestimate the cost of long-term care insurance, which may be one reason many are reluctant to consider purchasing a policy.

However, when respondents to our survey were shown an example of a long-term care insurance policy with a locked-in premium of $130 per month, more than half (52%) said they would be more willing to consider purchasing coverage, while only 6% said they would be less willing to consider it.

For some consumers, having more accurate information about the cost of long-term care coverage may change the conversation entirely. That doesn't mean long-term care insurance is right for everyone. Rather, the findings show how assumptions about cost can sometimes prevent you from exploring options that may align with your needs, goals and budget.

Understanding what's available is often the first step. Working with a financial professional may give you a clearer picture of the different types of policies, their costs, and coverage features, helping you determine whether long-term care insurance makes sense for your situation. And keep in mind, getting started with partial long-term care coverage may be better than nothing. Even if a policy doesn’t cover every potential long-term care expense, it may help reduce the amount you would need to pay from other income sources or savings.

Myth #2: I'm probably covered already

Many people assume they'll be covered if they ever need long-term care. But it's not always clear what that coverage would look like or where it would come from. 

Just over one in five Americans reports owning long-term care insurance, according to our research. Yet LIMRA estimates that only 3% of Americans over age 50 have long-term care insurance protection.

But whether you have coverage is only part of the picture. Understanding what long-term care services are—and are not—covered can be just as important. In our survey, 92% of respondents who had provided care for a loved one agreed that understanding what coverages they had in place before taking on caregiving duties would be valuable.

Families often find themselves scrambling when a loved one suddenly needs care. Instead of making decisions on their own timeline, they may end up comparing care options, coordinating support, and making important financial decisions in the middle of an already stressful situation. If you're like most people, you'd probably prefer to make those decisions before you need to, instead of during a time of crisis or uncertainty.

Taking time to understand what protections you do—and don't—have can help you prepare before those decisions become urgent. Reviewing your current long-term care coverage with a financial professional can help clarify what you already have in place and where additional planning can help fill in any gaps.

Myth #3: Savings will take care of it

When asked how they expect to pay for future long-term care costs, nearly two-thirds (62%) of respondents to our survey pointed to income and savings as top funding sources. Many also said they would rely on Medicare/Medicaid (48%) or Social Security (43%).

Making sure long-term care costs are covered is typically more complicated. Medicare generally does not cover most long-term care services, and Medicaid eligibility varies by state and individual circumstances. Social Security benefits may provide income in retirement, but they aren't specifically designed to cover long-term care expenses.

That's why it's important to consider how different funding sources may work together. A financial professional can help you evaluate potential strategies, weigh tradeoffs, and determine how long-term care fits into your retirement plan.

There's nothing wrong with expecting savings to help cover future long-term care expenses. But depending on the type of care needed and how long it lasts, those expenses can have a much bigger impact on your retirement finances if you don't plan for them in advance. Long-term care insurance is one way to help address future care costs, ensure you and your family have a better caregiving experience, and reduce the strain on other income sources in retirement.

Myth #4: If I need care, my family will just handle it

Many people assume a spouse, child, or other loved one would step in if long-term care becomes necessary. And for many families, that's exactly what happens.

But most people don't fully understand the demands of caregiving until they find themselves in that role: 65% of caregivers were surprised by how physically and emotionally demanding caregiving can be, our research found.

Providing care for a loved one may impact work schedules, family responsibilities, and personal well-being. Even when family members are willing to help, caregiving can be difficult to sustain without additional support.

That's why relying on family caregivers alone may not always be enough. Having conversations about caregiving expectations before care is needed can help families better prepare for the future and reduce uncertainty when important decisions need to be made. A financial professional may be able to provide guidance to help families evaluate caregiving requirements and expectations, financial considerations, and planning options.

What you can do now

Long-term care planning doesn't have to happen all at once. But taking a few proactive steps today can help you feel more prepared for the future.

Review your current coverage.

Take stock of any health, disability, life, and long-term care insurance you may have. Understanding what is—and isn't—covered can help you feel more confident about how you’ll cover care if you need it.

Talk with your family.

Discuss who might provide support, what type of care you would prefer (i.e., care at home or in a nursing facility, and how caregiving responsibilities could be shared. These conversations can be difficult, but they're often easier to have before decisions become urgent.

Consider how long-term care fits into your retirement plan.

Think about how a future care need could affect your savings, monthly income, and family responsibilities. Thinking through these questions now can help you feel more prepared if you do need care later on. 

Work with a financial professional.

A conversation with a financial professional can help bring all these pieces together—from coverage and caregiving considerations to funding strategies and retirement planning.  And if you decide long-term care insurance may be worth considering, a financial professional can help you evaluate different coverage options and determine what fits your budget and needs. Coverage doesn't have to be an all-or-nothing decision, and even a more limited policy may help offset future care costs. Depending on your circumstances, you also may have the option to adjust or add coverage later.

Decide, don’t assume

Long-term care is easy to put off, especially if you assume your savings, government benefits, or family support will be enough if you need care later in life. But our research suggests that many people are relying on assumptions that don't always line up with reality.

Taking time to learn more about long-term care, understand your options, and talk through a plan with a financial professional can help you prepare for the future and make more informed decisions for yourself and your family.

Ready to take the next step?

Connect with a financial professional to discuss how long-term care could fit into your retirement plan.

Methodology and Disclosures