Long-term care isn’t just something to think about in your 80s. As Suze Orman points out in her blog, planning ahead — especially in your 50s or 60s — could make the difference between financial stability and burning through your retirement savings if the unexpected happens.
Here’s why Orman says long-term care insurance deserves your attention now.
The Real Cost of Care Is Higher Than You Think
Needing long-term care might not mean living in a nursing home. In fact, less than 15% of long-term care happens in those facilities, according to Orman’s blog. Most people receive care at home or in assisted living, which still comes with a hefty price tag — often between $5,000 and $8,000 per month. And in more intensive situations, monthly care can reach $25,000.
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If care lasts several years — the average is 3.8 years for men and 4.7 years for women — those costs can easily add up to hundreds of thousands of dollars. Alzheimer’s, strokes, and other chronic conditions can push that timeline even longer.
Medicare only helps in the first three months after a hospitalization. After that, you’re on your own — unless you have long-term care insurance, or you qualify for Medicaid by spending down nearly all your assets.
How Long-Term Care Insurance Works
Orman explains that LTC insurance kicks in when you need help with at least two of six basic daily activities — such as bathing or eating — for 90 days or more, or if you have a serious cognitive impairment.
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There are two main types of policies she lists:
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Traditional LTC Insurance: This works much like health insurance — you pay a premium, and if you never need care, the money helps cover others’ claims. Premiums can increase over time, unless you purchase a plan with guaranteed pricing. These plans may offer inflation protection and can be more affordable if you buy early.
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Hybrid or Linked-Benefit Policies: These combine life insurance or annuities with long-term care coverage. If you never need care, your family still receives a death benefit. Premiums are usually guaranteed and require a larger upfront payment — often $100,000 or more. Some allow for flexible payments over time.
Several hybrid plans even offer 100% cash benefits, so you can choose your own caregivers, including family members.
What If You Can’t Qualify for Insurance?
If you have health issues that prevent you from qualifying for standard LTC insurance, there are still options. Orman shares that fixed index annuities with long-term care riders may offer increased payouts if you need care later — sometimes double your monthly income for up to five years. These options typically have easier health requirements.
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Don’t Count on the Government to Step In
Orman warned that while many state governments are implementing programs to assist with LTC, don’t assume that it will provide everything you need. She listed Washington State as an example. They launched a public LTC program in 2023, funded by a payroll tax. But the lifetime benefit caps out at just $36,500 — less than six months of care in many places. Other states like California, New York and Minnesota are exploring similar programs, but none are expected to offer full financial protection.
Protecting Your Future
Orman urges individuals — especially those nearing or in retirement — to explore their options now. She emphasizes that even a modest LTC policy can make a big difference, covering part of the cost and preserving more of your retirement nest egg.
As care costs rise, having a plan in place may give you and your family peace of mind — and keep your financial future intact.
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This article $25,000 Monthly Care Costs? Suze Orman Shows How Long-Term Care Insurance Can Protect Your Savings originally appeared on Benzinga.com
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