Some people see long term care insurance as a luxury. But it is often a very important part of someone’s future. It is not only about how difficult it is to pay for long term care, which is increasing in price every year. It is also that long term care insurance protects your assets, and that can potentially make it an important part of your estate planning.
Estate planning is not only about passing down wealth – it’s also about protecting it during your lifetime. One of the most significant financial risks to that plan is the cost of long term care. As people live longer and develop more complex health needs, many families find themselves unprepared for the impact that extended care can have on their finances. That’s where long term care insurance becomes part of the conversation.
While often discussed separately from estate planning, long term care coverage plays a role in preserving assets, reducing family burden, and maintaining flexibility in how your estate is eventually distributed. For those that are trying to better plan their estate as they get older, this makes long term care insurance something that you and your financial adviser should talk about.
Managing the Cost of Care Without Depleting Assets
Long term care insurance is designed to pay for services that traditional health insurance and Medicare do not cover. Unfortunately, that is most forms of long term care, such as in-home care, assisted living, or nursing facility care. These services are expensive, and when paid out-of-pocket, they can significantly reduce the size of an estate.
Nursing home costs can exceed $100,000 per year in many states. Even part-time home care may cost thousands per month depending on the level of need. Medicaid, which does pay for some (but not all) forms of long term care, requires individuals to spend down nearly all of their assets before coverage begins. This leaves few protections in place for personal or family wealth.
For individuals who have spent decades building savings, retirement funds, or investment portfolios, long term care expenses can quickly erode the financial stability they intended to pass on to others, and even spend on yourself and your partner.
Preserving Wealth for Spouses and Heirs
Without a plan for long term care, a surviving spouse or intended heirs may be left with far fewer resources than expected. This becomes especially relevant for married couples where one partner may require care for several years, while the other is in otherwise good health.
Long term care insurance can help prevent the forced sale of property or early withdrawal of retirement accounts. Policy benefits reduce the need to liquidate other estate assets. Coverage may allow more wealth to pass intact to beneficiaries rather than being used for late-life medical and custodial expenses.
In effect, the insurance functions as a protective barrier ensuring that the estate remains viable even if long term care becomes necessary.
Planning for Control, Not Just Coverage
Estate planning is about maintaining control over your financial and personal decisions as you age. Long term care insurance supports that control by allowing policyholders to access care options based on preference, not just affordability.
- Coverage can support aging at home rather than institutional care.
- Coverage offers access to better facilities and broader provider choices.
- Coverage reduces the financial pressure on adult children or other family members who may otherwise take on caregiving responsibilities.
This kind of flexibility allows people to age with dignity and independence while keeping the broader estate plan intact.
Integrating Insurance Into a Broader Estate Strategy
For those working with estate planners or financial advisors, long term care insurance is often considered alongside trusts, gifting strategies, life insurance, and tax planning. It helps address a known risk without requiring major changes to how an estate is structured.
Some families may also consider hybrid life/long term care products, asset-based policies, or partnership-qualified plans that offer additional asset protection features. The right fit will depend on age, health, income, and estate goals – but the underlying principle remains the same: protect now to preserve later.
Protecting the Estate While Planning for the Future
Including long term care insurance in an estate plan is a practical step toward ensuring that wealth is used according to your values, not consumed by unplanned medical needs. While not everyone will require extended care, the financial risk is large enough – and common enough – that planning ahead remains one of the most effective ways to preserve both financial stability and personal choice in the years to come.