How to Pay for Long-Term Care Without Losing Everything

Long-term care can be one of the biggest financial challenges families face . Whether it’s home-based help or full-time nursing care, the cost of care is often substantially more than families expect.  

How much exactly?

The national median cost of a private room in a nursing home is roughly $127,750 per year, while assisted living costs an average of $70,800 annually. Even in-home care isn’t cheap—home health aides average $77,792 annually for 44 hours per week, according to Genworth’s 2024 Cost of Care Survey.

So, how can you or your loved ones pay for long-term care without losing everything?

Consider these potential options. 

1. Use Personal Savings or Investments

Paying out-of-pocket is the most straightforward approach, but also the most financially risky.

For Americans aged 55 to 64, the median retirement savings is just $185,000. The majority of retirees simply don’t have enough saved to even cover two years of nursing home care.

To make up for it, families may resort to selling real estate or liquidating retirement accounts. However, this can have financial consequences, such as capital gains taxes, early withdrawal penalties, and loss of future financial security.

Before taking this route, it may be wise to speak to someone who can walk you through all of the options available and the role that savings and investments may play in the bigger-picture strategy.   

2. Cover Costs With Long-Term Care Insurance

Long-term care insurance helps cover services such as assistance with bathing, dressing, and other personal care needs.

The younger and healthier you are when you apply, the lower the premiums. For example, a healthy 55-year-old couple might pay around $2,080 combined annually for a policy with $165,000 in benefits, based on data from the American Association for Long-Term Care Insurance.

At 60, that same couple can expect to pay $2,600 for that same $165,000 in benefits. After age 70, nearly 50% of individuals who apply for long-term care insurance are declined.

Long-term care insurance often seems like a way to protect your savings by paying manageable premiums in exchange for coverage if you ever need care. However, premiums may suddenly increase as you age, becoming less affordable for those on a fixed income.   

3. Life Insurance With a Long-Term Care Rider

Life insurance is often viewed as a financial nest egg for the future that can only be utilized once a loved one passes away. However, life insurance with a long-term care rider actually serves a dual purpose. It can provide financial protection for loved ones after the policyholder passes away, plus it can be utilized by the policyholder for long-term care services during their lifetime.

To get started, the policyholder would purchase permanent life insurance, such as whole or universal life insurance and request to add on a long-term care rider. By doing so, they can then use the policy’s death benefit toward qualifying long-term care expenses, such as in-home care, assisted living, or nursing home care. 

The cost of those services would then be deducted from the death benefit, which would reduce the amount paid out to beneficiaries when the policyholder dies. 

4. Leverage Government Programs

For those who qualify, certain government programs can help pay for long-term care.

Some of those options might include: 

• Medicaid: The primary payer in the U.S. for long-term care services, Medicaid covers nursing home care and, increasingly, Home and Community-Based Services (HCBS). To qualify, individuals must meet financial and medical eligibility requirements. 
• VA Benefits: The VA Aid and Attendance benefit provides monthly payments to wartime veterans and their surviving spouses. It’s designed to help offset the cost of long-term care for people who need assistance with activities of daily living, such as bathing, dressing, or eating.  

This benefit can significantly reduce out-of-pocket costs and is often underutilized due to complex eligibility rules. Consider working with an experienced lawyer who understands the ins and outs of these benefits and how to qualify. For example, Family First Firm has helped families legally move assets out of aging parents’ names to help them become eligible for Medicaid.   

This has helped ensure the individual has the medical care they deserve, the spouse has greater financial security for the future, and their children are left with the inheritance their parent had planned. 

5. Annuity with a Long-Term Care Rider

Annuities are another option to help pay for long-term care. They’re designed to provide a steady source of income, especially during your retirement years.  

How does it work?

There are three different types of annuity:

• Fixed annuity: Grows at a fixed interest rate over time.
• Variable annuity: Grows based on market performance. 
• Indexed Annuity: Grows based on a market index, such as the S&P 500.  

To purchase an annuity, you can make a one-time payment or a series of payments over time.

The insurance company then uses the growth from that investment to provide you with income payments.

The payments can happen for a set number of years or for the rest of your life. 

Coupled with a long-term care rider, the annuity can provide even greater support. If you ever need long-term care, it can increase the amount you receive to help cover services like in-home care, assisted living, or a nursing home.  

6. A Proven Process to Pay for Long-Term Care

One of the most effective and overlooked ways to pay for long-term care is through strategic asset protection. Family First Firm helps Florida families preserve long-term wealth while accessing the care they need now.

Whether your loved one is facing an immediate health crisis or you’re planning for the future, Family First Firm can help you maximize resources like long-term care insurance, life insurance, annuities, and asset protection.

It’s like having one team in your corner for legal counsel, financial guidance, and life insurance knowledge—all under the same roof.

Our dedicated attorneys will work to understand your needs, customize a plan for your best financial outcome, and help you see it through to fruition.

Since 2009, we’ve successfully helped families navigate long-term care transitions while saving them millions, alleviating the added stress of financial hardship.   

To learn more, call 866-646-9649, fill out this form, or click here to schedule an appointment to meet with a team member, and we’ll be in touch soon.