Most people plan for things that might happen. This one probably will.
We buy home insurance even though the chance of a house fire is small. Yet many retirement plans say nothing about a risk that more than half of us will face: needing long-term care.
According to the U.S. Department of Health and Human Services, 56% of Americans turning 65 will develop a need serious enough to require long-term care, and about 1 in 5 will need it for more than five years. When something is more likely than not, the question isn’t whether to plan for it. It’s how you’ll pay for it.
Long-term care is not medical care
Medical care is about treatment: doctors, hospitals, surgery. Long-term care is about help with daily life: care at home, assisted living, or a nursing home. That difference matters because Medicare and regular health insurance generally don’t pay for ongoing custodial care.
Long-term care benefits usually start when a licensed health professional certifies that you can’t do 2 of the 6 activities of daily living on your own: eating, bathing, dressing, toileting, continence, and transferring (for example, getting from a bed to a chair). A serious cognitive impairment such as Alzheimer’s or dementia also qualifies.
What it costs in the Twin Cities (2025)
Median monthly costs in the Minneapolis area:
- In-home caregiver (44 hrs/week): ~$8,580
- Assisted living (private one-bedroom): ~$7,089
- Nursing home: ~$10,950 semi-private / ~$14,053 private
Three years of full-time care at home costs more than $300,000 at today’s prices.
Most care starts at home
Most people receive care at home, often from family first, and for longer than they stay in a facility. Most insurance claims also start with home care, not a nursing home. A good plan covers both, but your most likely first need is care in your own home.
Why this matters even more for women
Women are more likely than men to need care (about 64% vs. 49%), and they need it longer: an average of 3.6 years vs. 2.5. One in four women will need care for more than five years.
Women also tend to outlive their husbands. Often a wife cares for her husband at home. When she later needs care herself, he’s no longer there to help. That’s why, in many couples, coverage for the wife can matter more than coverage for the husband.
How will you pay for it?
There are two main ways:
- Pay out of pocket. You keep the risk. If you never need care, it costs nothing. If you do, your savings pay 100% of the bill.
- Transfer some or all of the risk with insurance. You pay a premium in exchange for a much larger pool of money if care is needed. Some policies, including hybrid life/LTC policies, return value to your heirs if you never use the benefit.
Neither answer is right for everyone. It depends on your plan.
How we help clients decide
We don’t guess. We model your plan four ways:
- Your plan today: no care costs and no insurance
- A care event, no insurance: what happens if you pay out of pocket
- Insurance, no claim: what the premiums cost you if you never need care
- Insurance, with a claim: how the coverage protects your plan
Seeing all four side by side shows what the risk really costs you and what insuring against it is worth, so you can choose with confidence.
If you’ve never seen your plan tested against a long-term care event, let’s run the numbers.
Disclosures
This material is for informational and educational purposes only. It is not intended as, and should not be construed as, individualized tax, legal, or investment advice. Freedom Financial Partners does not provide legal or tax advice. Business owners and individuals should consult with their qualified tax advisor, attorney, or other professional regarding their specific situation.
Insurance and long-term care products are offered through FFP Insurance LLC, a licensed insurance agency, and are separate and distinct from the advisory services offered by Freedom Financial Partners, an SEC-registered investment adviser. Purchasing insurance products may result in the payment of commissions to FFP Insurance LLC.
Insurance products are subject to underwriting approval, limitations, exclusions, and the terms of the issuing insurance company. Premiums, features, and tax treatment may vary based on state law and individual circumstances. Examples are hypothetical and for illustrative purposes only.
Freedom Financial Partners is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. More information about our firm, including services and fees, is available in our Form ADV Part 2, which can be found at www.adviserinfo.sec.gov.
Sources
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HHS/ASPE, Older Americans: Risks and Financing, 2022: 56% need care; 22% need it for more than 5 years; figures for women vs. men
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CareScout 2025 Cost of Care Data for Minnesota
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CareScout Cost of Care tool
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ACL: How Much Care Will You Need?: where care is received and for how long
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American Association for Long-Term Care Insurance (aaltci.org): where claims begin
