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Financial Planning

What You Need to Know About Your Long-Term Care Planning Options


As we age, some of us will need varying degrees of assistance for daily living. A recent study by the Administration on Community Living and the Administration on Aging found that someone turning 65 today has a 70% chance of needing some type of long-term care services and support in their remaining years. With a longer life expectancy, most women will need care longer (3.7 years on average) than men (2.2 years).

Facing a possible need for assistance as you age, you may want to evaluate your financial plans now, specifically, setting aside money for long-term care. You will want to get answers to these questions: What exactly are the options for setting up a long-term care fund? And, what happens if I invest in a long-term care option but never use it?

It’s crucial to have a plan for long-term care, even if those funds never get used. If you haven’t planned for it, paying for long-term care can be financially crippling. For example, the average cost for nursing home care is upwards of $80,000 annually. For the average person or family, paying for care outright is not an option.

Learning about your planning options now will enable you to get a plan in place. There are five options to consider for funding your long-term care:

  1. Having family members as caregivers.
  2. Using personal savings and investments, borrowing or financing.
  3. Using Medicare and Medicaid.
  4. Buying a long-term care insurance policy.
  5. Buying a life insurance policy that has a long-term care settlement option.

Of these, purchasing a life insurance policy with a long-term care settlement option can provide more choices. Although premiums may be more expensive than traditional life insurance policies, they offer a great alternative for people looking to benefit from money they put aside if they will not need long-term care. These policies have a significant advantage over comparable long-term care insurance in that they accrue cash value and have a death benefit. When obtained from insurance providers such as AAFMAA (American Armed Forces Mutual Aid Association), these policies allow the policy owner to receive some or all of the policy’s death benefit in advance to pay long-term care costs. Any benefit not consumed by long-term care costs remains in force under the life insurance policy and would be payable to a beneficiary of the policy owner’s choosing at the time of death. As with long-term care insurance policies, these life insurance policies require the policy owner to meet certain criteria before being able to qualify for the long-term care settlement option.

No matter how you decide to address long-term care expenses, the bottom line is that it must be part of your financial plan. Thanks to our partnership with A Place For Mom, when the time comes to find an appropriate care setting for yourself or your family members, not only do you have the added Member benefit of expert support, you’ll also get $350 toward your moving expenses. To access this benefit, AAFMAA Members should visit

Most AAFMAA whole life insurance policies, include a long-term care settlement option at no additional cost. Call an AAFMAA Membership Coordinator today at 888-506-7040, select option 2, then option 2 again to learn more.

This article was originally published October 25, 2015.