Baby boomers (i.e., individuals born between 1946-1964) are living and thriving longer than previous generations, which has contributed to a shift in overall demographics. The 65-and-up population grew by 38.6% from 2010-2020 — the most significant jump in well over a century, according to census data.
At any stage of life, it’s wise to plan for the future. An aging population, limited access to care, and rising care costs make this planning more critical than ever for baby boomers. Long-term care insurance (LTCI) is a traditional approach to future care planning, but as costs shift and other options emerge, many are asking: Is long-term care insurance worth it? Is it a cost-effective investment, and does it really meet care planning needs?
This guide discusses LTCI’s potential value, limitations, and alternatives for boomers planning for the years ahead.
Long-term care insurance is designed to cover care costs that Medicare typically doesn’t, should the policyholder need this type of care in the future. Examples may include in-home assistance with activities of daily living (ADLs), such as bathing, dressing, or eating, or residential care in an assisted living, memory support, or long-term care community.
Usually, individuals and couples who purchase LTCI do so in their mid-50s to mid-60s. Retiring baby boomers may explore this option as they begin to plan more seriously for their future. To qualify, a person typically needs to be younger than 75 and in relatively good health. LTCI is not designed for everyone, but it can be a useful piece of a broader strategy for planful aging.
As long as a person holds an LTCI policy, they pay premiums to maintain their coverage. These premiums are based on factors such as age, health status, and policy features and may increase over time. Currently, a couple both aged 60 can expect to pay an average annual premium of $2,600.
LTCI can be a smart investment if a policyholder ever requires long-term care. Even if you paid the average premium listed above for 20 years before requiring care, you could save substantially compared to paying for care out of pocket. As of 2024, average long-term care costs in the U.S. range from $26,000-$127,750, depending on the level of living.
Younger boomers still may be eligible to purchase a policy, but the window is narrowing.
For those still eligible, many do not purchase an LTCI policy due to:
Now, with increasing awareness around long-term care needs, baby boomers are asking:
Long-term care insurance comes with potential benefits and downsides to consider.
In the best cases, LTCI can benefit policyholders by offering:
Despite the potential benefits, LTCI is not a perfect solution for aging planfully, as:
Considering the high cost and limitations of LTCI, it’s no wonder that many boomers are considering alternative options. Some possible options include:
All these solutions come with serious limitations. A more robust solution that is a great fit for most healthy older adults is a continuing care at home (CCaH) program.
CCaH programs also are designed to help with future care costs — but, unlike LTCI, they also empower members with benefits to help them age in place.
WellAhead — A WesleyLife Well-Being Experience is an innovative CCaH program that offers a considerable improvement on the traditional LTCI model. WellAhead helps members thrive at home while enjoying financial security for the future.
Members pay an upfront fee and ongoing membership fees (that, unlike LTCI premiums, won’t suddenly increase without warning) to remain in the program. A WellAhead membership covers primary costs for care if a member’s needs change in the future, making this manageable cost a smart investment.
Unlike LTCI, a WellAhead membership is guaranteed to deliver benefits, even if a person never requires in-home care or needs to move to a long-term care community. From day one, members enjoy perks such as personalized wellness coaching, access to fitness centers and classes, and select at-home services to make life more convenient and comfortable.
Not sure whether LTCI or another approach to planful aging makes sense for you? Consider whether the perks of LTCI outweigh the possible drawbacks and whether this option fully meets your needs. If an LTCI policy would still leave you worrying about the future, it’s best to explore an alternative option like WellAhead.
You may also want to consult with a financial advisor or aging-in-place specialist to explore your options in light of your financial situation and goals.
Whether through LTCI, WellAhead, or a combination of resources, planning now means more control down the road. It also means you can enjoy peace of mind without worrying about what the future holds. LTCI may be a good fit for some, but fortunately, it’s far from the only option to consider.
WesleyLife’s WellAhead program supports aging in place with clarity, care, and confidence. Interested in learning more about the benefits you can experience from WellAhead? Check out our brochure to get the full picture.