I'm at a stage in my life where many of my friends are dealing with aging parents. "My Mother's Money" by Beth Pinsker is the book I'm going to recommend to them.
It covers many important topics including estate planning, healthcare and taxes – but the chapter that caught my eye is focused on something I still need to figure out: long-term care insurance.
"You have homeowners insurance, you have car insurance, you have pet insurance," Pinsker says. "Your longevity should be insured."
Long-term care insurance covers expenses for nursing home or home care if you become incapacitated – most of which is not paid by Medicare and can be extremely expensive out of pocket. The average annual cost of a private room in a nursing home room is more than $127,000.
Pinsker's mom, who died in 2023 after multiple years of health complications, had a long-term care policy she tapped several times, covering round-the-clock private home care toward the end of her life.
While it is not cheap, long-term care coverage offers a peace-of-mind premium. "When my mom needed help, the thing that pushed her over the hurdle was the fact that she had this policy," Pinsker says. "If she had to pay out of pocket, she would have hesitated when it came to time to hire full-time caregivers."
It is important to note that the long-term care insurance landscape has changed dramatically in the past two decades, as insurers suffered huge losses and exited the business. Today, the best way to get coverage is to buy a hybrid life insurance policy which offers the ability to withdraw money for long-term care coverage, Pinsker says.
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