March 26, 2025

2025’s Biggest Long-Term Care Health Insurance Update with Mike Smith

40 minutes

Insurance expert Mike Smith breaks down how long-term care health insurance options have evolved in 2025 to provide a wider variety of coverage choices in retirement.

The way we think about long-term care insurance has evolved–is your retirement health plan up to date? In this episode of the Retirement Revealed podcast, I sat down with Mike Smith, an expert in insurance solutions, to discuss how long-term care insurance has changed and the different options available today.

Understanding the New Landscape of Long-Term Care Insurance

Traditionally, long-term care insurance covered nursing home stays, offering little to no assistance for home health care or assisted living. But as the needs of retirees have shifted, so have the policies. Today, long-term care insurance can include coverage for a range of care options, from home health services to assisted living and skilled nursing care.

Beyond just the evolution of coverage, how people purchase long-term care insurance has changed as well. In the past, insurance was largely sold through captive agents representing only one company. Now, independent agents can shop across multiple providers, helping you find a policy that best suits your needs.

Types of Long-Term Care Insurance

One of the biggest changes in long-term care insurance is the variety of options available. Understanding these different types can help you make a better-informed decision about your financial future.

Traditional Long-Term Care Insurance
This is what most people think of when they hear “long-term care insurance.” It provides the most coverage for the lowest cost but comes with a downside—if you never need long-term care, you don’t get any money back. Additionally, some policyholders have experienced premium increases over time.

Hybrid Life Insurance with Long-Term Care Riders
This option combines life insurance with a long-term care benefit. If you need long-term care, you can draw from your policy’s death benefit to cover costs. If you never need care, your beneficiaries receive the full death benefit. While more expensive than traditional long-term care insurance, many people like the guarantee that their money will go to good use one way or another.

Hybrid Annuities with Long-Term Care Benefits
These annuities allow you to use tax-advantaged funds to pay for long-term care. If you never need care, the annuity remains an asset that can be passed on to heirs. For people with existing annuities that they don’t plan to use for income, this can be a smart way to reallocate funds for potential care needs.

Short-Term Care Insurance
Not everyone needs full long-term care coverage. Short-term care policies cover up to a year of care and can be a cost-effective way to bridge the gap before personal savings or other resources kick in. This option is particularly useful for those who may not qualify for traditional policies due to age or health conditions.

Key Considerations When Choosing a Policy

With so many options available, how do you choose the best one for you? Here are a few factors to keep in mind:

Premium Costs vs. Benefits: Traditional policies offer the most coverage for the lowest premium but come with the risk of rising costs. Hybrid policies provide guarantees but at a higher initial cost.

Elimination Periods: This is the time between when care begins and when benefits start paying. Some policies offer zero-day elimination for home health care, which can be beneficial if you need immediate assistance.

Inflation Protection: Since the cost of care rises over time, an inflation rider can help ensure your policy keeps pace with future expenses.

Shared Care Riders: These allow couples to share a pool of benefits, ensuring that one spouse doesn’t exhaust their coverage while the other remains unprotected.

Why You Need a Long-Term Care Plan

Regardless of whether you purchase insurance, having a long-term care plan is essential. Consider how you want to receive care, where you want to live, and how you will finance any needed services. Communicating your wishes with family members and legal advisors can help avoid stress down the road.

Long-term care insurance is no longer a one-size-fits-all product. With various options tailored to different needs, it’s worth taking the time to explore what’s available and how it fits into your retirement strategy. If you’re considering long-term care insurance, talk with an independent advisor who can provide a comprehensive comparison of policies and help you make an informed decision.

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Additional Links:

THIS Type of Person Should Get Long-Term Care Insurance

Mike Smith, CPS Horizon – 414.427.8660, [email protected]

Mike Smith on LinkedIn

CPS Horizon Financial

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