When most people think about retirement, they think about travel, grandkids, and enjoying the fruits of decades of hard work. What they don’t want to think about—but absolutely should—is the possibility of needing long-term care.
Long-term care (LTC) planning isn’t just about protecting assets. It’s about protecting your independence, your family, and your legacy.
At GenWealth, our mission is to help you discover, protect, and share true financial independence. Part of that mission includes making sure your financial plan accounts for the potential costs and complexities of long-term care.
Let’s break down what you need to know.
Why Plan for Long-Term Care?
The need for long-term care typically arises when someone can no longer perform basic activities of daily living—like bathing, dressing, or eating—without help. And while many people assume Medicare or health insurance will cover these costs, the reality is: they don’t.
According to the Genworth Cost of Care Calculator, the average monthly cost of care in Arkansas can range from $3,000 to over $7,000, depending on the type of care. That’s a significant expense—especially if it lasts several years.
Planning ahead means your loved ones don’t have to scramble, guess, or sacrifice financially when care is needed.
The Four Main Types of Long-Term Care Products
There’s no one-size-fits-all solution when it comes to LTC insurance. Each product type has its own strengths and limitations, which is why understanding your options is so important.
- Traditional LTC Insurance
a. Pros: Lower initial cost, customizable features like inflation protection.
b. Cons: “Use it or lose it.” If you never need care, you don’t get your money back. Premiums can increase over time. - Hybrid LTC Policies
a. These are often life insurance policies with built-in LTC benefits.
b. Pros: Your money isn’t wasted—benefits are paid out either through LTC or as a death benefit. Premiums are typically fixed.
c. Cons: Higher cost, and they may not allow you to customize a specific death benefit. - Life Insurance with LTC Rider
a. Pros: Covers both life insurance and LTC needs with one policy.
b. Cons: Limited flexibility, especially in key features like inflation protection. - LTC Annuities
a. Pros: Easier to qualify for than traditional LTC insurance; may not require a medical exam.
b. Cons: Usually require a large upfront investment, and benefits may not match traditional LTC policies.
Important Terms to Know
Before making any decisions, it’s helpful to understand the basic terminology:
- ADLs (Activities of Daily Living): These include bathing, eating, dressing, toileting, continence, and transferring. Most policies require the inability to perform 2 or more ADLs to trigger benefits.
- Inflation Protection: Protects the future value of your benefit. Common options include 3–5% compounding.
- Elimination Period: The waiting period (like a deductible in time) before benefits kick in—often 30 to 90 days.
- Benefit Payout Types:
- Indemnity: Pays a flat cash amount you can use however you need.
- Reimbursement: Pays actual care expenses, often requiring proof and receipts.
What About Underwriting?
Like life insurance, most LTC policies require underwriting. That means they’ll look at your health history before approving you.
Underwriting may include:
- An application
- A phone or in-person interview
- A medical exam
- Medical records review
⚠️ Tip: Don’t wait until your health declines. The earlier you apply, the more options you’ll have.
What’s the “Right” Policy for You?
There’s no universal answer. The “right” policy depends on:
- How much you can comfortably set aside for premiums
- The type of coverage that fits into your overall financial plan
- Your current health
- Whether you want benefits to cover full costs or just offset some expenses
At GenWealth, we recommend running multiple options to compare benefits and values—not just choosing based on price. And we only work with A-rated carriers so you can count on stability and strength.
LTC Planning Aligns With Your Goals
We always say: “Let’s help our clients leave benefits, not burdens.”
That’s not just a slogan—it’s a guiding principle.
Including long-term care in your retirement plan helps protect your assets and preserves your independence for as long as possible.
Next Steps
If you haven’t had a conversation about LTC yet, now is the time. You don’t need to know all the ins and outs to get started—you just need to take the first step.
- ✅ Talk to your advisor about building LTC into your retirement income plan.
- ✅ Use tools like the Genworth Cost of Care Calculator to understand potential costs.
- ✅ Consider whether a traditional policy, hybrid plan, or LTC annuity might make the most sense for you.
Need help navigating your options? Let’s talk. Click here to get in touch with a GenWealth team member!
Together, we’ll help you plan not just to retire, but to maintain your dignity and independence in retirement.
Securities offered through LPL Financial LLC, Member FINRA / SIPC | Investment advice offered through Independent Advisor Alliance. Independent Advisor Alliance and GenWealth Financial Advisors are separate entities from LPL Financial. Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company.
