for millions of baby boomers genxers and millennials who have no longterm care strategy the pandemic has sent a message act now or it will cost you later it’s a sobering task no matter your financial situation to plan for the possibility of some future incapacitation but putting it off until too late can have dire consequences for your savings the reality is that more than twothirds of americans over the age of 65 will need some sort of daily care for an average of three years during their lifetime according to the urban institute those costs can quickly add up a stay in a nursing home can cost over 100000 a year and even care in your own home can easily top 5000 a month or more these high costs help explain why many people rely on family members for their care “about 5 of the population that needs longterm care lives in nursing homes another 5 live in assisted living which means about 90 of people get care at home and most of that falls on family members” says howard gleckman a senior fellow at the urban institute and an expert on longterm care if you don’t have family members willing to care for you—or if your needs end up greater than they can handle—the situation can get dire but unless you are wealthy enough to pay out of pocket for your care or you are willing to spend down to qualify for medicaid you’ll need to find financing—and the product that many people turn to for this is longterm care or ltc insurance an ltc insurance policy will help cover the costs of any necessary care you may need if you end up with a chronic medical condition disability or disorder such as alzheimer’s disease most policies will reimburse you whether that care is given in your home a nursing home an assistedliving facility or an adult daycare center you become eligible for benefits only when you can’t do at least two “activities of daily living” or adls on your own these typically include bathing or showering going to the bathroom getting dressed eating and getting in and out of bed or a chair first it’s not medicare despite what many people think says mary ballin a wealth advisor at perigon in san francisco that federal insurance program covers a lot of things after you turn 65 but longterm care isn’t one of them “medicare will pay a little bit for a nursing home stay for rehabilitation but it’s only good for up to 100 days per lifetime and you have to be in a hospital for three days before it kicks in” she says private ltc insurance choices are limited today because insurance companies both misjudged the market returns of the early 2000s and the longevity of the people buying the policies as a result insurers lost money and stopped providing coverage the number of companies offering ltc insurance has plummeted to only about a dozen in 2020 according to the national association of insurance commissioners from slightly more than 100 in 2004 while traditional plans are still offered today about 90 of policies sold now are what experts refer to as “hybrid” policies namely a life insurance policy that is either linked to an ltc policy also called an “extension” or has a rider attached says erik miller product strategist with life happens a lifeinsurance industry consumer education nonprofit an ltc or chronic illness rider allows you to either use a portion or all of your life insurance’s death benefit while you’re still alive to pay for longterm care expenses otherwise that money would go to your beneficiary these kinds of addons as well as the linked products are appealing to many because they solve the useitorloseit problem of traditional policies—if you don’t end up needing to use those funds for ltc you still get the death benefit but the insurance industry doesn’t make it easy for the consumer figuring out which hybrid plan to buy requires wading through a labyrinthine set of provisions and fine print for each product how to choose the right ltc policy with any of these policies you can either pay a lump sum—a common premium for an individual will fall between 50000 to 150000—or pay that premium via fixed annual payments over 5 7 10 or sometimes 20 years what you can get for the cost of your policy can vary significantly because of variables including your age overall health and medical history how long you want the coverage for and your gender since women live longer and are expected to spend more time in longterm care also you need to think about which aspects of a policy matter most to you in general says miller   if you’re more interested in knowing you have good ltc benefits in place a linked benefit policy may be best for you since it tends to offer better ltc benefits than a life policy with an ltc rider also only with a linked benefit policy can you add an inflation option you will need to pay extra for it which allows for the value of your benefit to grow to at least 5 to 6 times what you paid for it   if your primary focus is having a death benefit for your heirs but you want the comfort of knowing you could use that money for ltc if necessary then a life policy with either an ltc rider or something called a chronic illness rider would likely be best for you a chronic illness rider typically works the same as an ltc rider but is not federally regulated—ltc policies are subject to federal tax and language rules—so it’s not standardized across insurers the way ltc riders are miller cautions because of that he says to make sure to go over every detail with an insurance agent before purchasing so you know exactly what provisions you’re getting with it whatever you do if you’re approaching or in your 50s now is the time to figure out what kind of planning will work best for you because the healthier and younger you are the less your policy will cost in the long run says ballin