Five Questions About Long-Term Care

Posted by Busey Bank on Apr 8, 2024 10:15:00 AM
Busey Bank

When planning for the future, many people often overlook the potential need for long-term care. We’ve put together five of the more popular questions often asked by those considering long-term care insurance.

A man and woman sit on a porch with a lake view as they look at a cell phone.

  1. What is long-term care?

Long-term care refers to the ongoing services and support needed by people who have chronic health conditions or disabilities. There are three levels of long-term care:

  • Skilled care: Generally round-the-clock care that's given by professional health care providers such as nurses, therapists or aides under a doctor's supervision.
  • Intermediate care: Provided by professional health care providers but on a less frequent basis than skilled care.
  • Custodial care: Personal care that's often given by family caregivers, nurses' aides or home health workers who provide assistance with what are called "activities of daily living" such as bathing, eating and dressing.

Long-term care is not just provided in nursing homes. In fact, the most common type of long-term care is home-based care. Long-term care services may also be provided in a variety of other settings, such as assisted living facilities and adult day care centers.

  1. Why is it important to plan for long-term care?

No one expects to need long-term care, but it's important to plan for it, nonetheless. Here are two important reasons why:

The odds of needing long-term care are high:

  • Approximately 7 out of 10 of people will need long-term care at some point during their lifetimes.1
  • Between ages 40 and 50, on average, eight percent of people have a disability that could require long-term care services.2

The cost of long-term care can be expensive:

For many, the cost of long-term care can be expensive, absorbing income and depleting savings. Some of the average costs in the United States for long-term care include3:

  • $8,699 per month, or $104,388 per year for a semi-private room in a nursing home.
  • $9,733 per month, or $116,796 per year for a private room in a nursing home.
  • $5,450 per month for an assisted living facility.
  • $2,058 per month for services in an adult day health-care center.
  1. Doesn't Medicare pay for long-term care?

Many people mistakenly believe that Medicare, the federal health insurance program for older Americans, will pay for long-term care. But it provides only limited coverage for long-term care services such as skilled nursing care or physical therapy. Although Medicare provides some home health care benefits, it doesn't cover custodial care, the type of care older individuals most often need.

Medicaid, which is often confused with Medicare, is the joint federal-state program that roughly 60% of nursing home residents currently rely on to pay some of their long-term care expenses. But to qualify for Medicaid, you must have limited income and assets, and although Medicaid generally covers nursing home care, it provides only limited coverage for home health care in certain states.

  1. Can't I pay for care out of pocket?

The major advantage to using income, savings, investments and other assets to pay for long-term care is that you have the most control over where and how you receive care. But because the cost of long-term care is high, you may have trouble affording extended care if you need it.

  1. Should I buy long-term care insurance?

Like other types of insurance, long-term care insurance helps protect you against a specific financial risk—in this case, the chance that you will need long-term care. In exchange for your premium payments, the insurance company promises to cover part of your future long-term care costs.

Long-term care insurance can help preserve your assets and will provide you with a range of care options. However, it can be expensive, so before you purchase a policy, make sure you can afford the premiums both now and in the future.

The cost of a long-term care policy depends primarily on your age and current health, but it also depends on the benefits you choose. If you decide to purchase long-term care insurance, here are some of the key features to consider:

  • Benefit amount: The daily benefit amount your policy will pay for your care each day.
  • Benefit period: The length of time your policy will pay benefits (e.g., two years, four years, lifetime).
  • Elimination period: The number of days you must pay for your own care before the policy begins paying benefits (e.g., 20 days, 90 days).
  • Types of facilities included: Many policies cover care in a variety of settings, including your own home, assisted living facilities, adult day care centers and nursing homes.
  • Inflation protection: With inflation protection, your benefit will increase by a certain percentage each year. It's an optional feature available at additional cost but having it will enable your coverage to keep pace with rising prices.

Your insurance agent or a financial professional like those with Busey Wealth Management can help you compare long-term care insurance policies and answer any questions you may have. To find a Busey Wealth Management advisor near you, visit

1 2024 U.S. Department of Health and Human Services

2Administration for Community Living; last updated 5/10/2022

3 Cost of Care Survey 2023, Genworth Financial, Inc., December 2023


This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.

Investment products and services through Busey Wealth Management are:
Not FDIC INSURED | May lose value | No bank guarantee

Topics: Wealth, Financial Planning

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