Things to Know When Choosing Between a Long-Term Care Policy and an Insurance Rider

Preparing for the possibility of needing long-term care is something everyone should think about before reaching retirement age. Medicare does not cover it, and Medicaid only pays after you have spent down your assets to a minimum.

About 70 percent of 65-year-olds, NerdWallet says, will need some long-term care services. Women usually need longer coverage than men because they live longer.

Apart from using your savings, there are two common ways to pay for long-term care. Long-term care policies are available, or you can buy a long-term care rider on a life insurance policy. Only some life insurance companies sell these kinds of policies.

Long-Term Care Policies

The services covered by a long-term care policy are not covered by a standard health insurance policy. They provide coverage for when care is needed in your home, a nursing home, an adult day care center, or an assisted living facility.

The costs of these services are unaffordable for many people, and they may eat up most or all of your retirement savings if you choose to pay for them yourself. In 2024, SeniorLiving reports that a semi-private room in a nursing home costs on average about $294 per day or $8,929 for a month, $107,146 per year. 

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