Long-term care is one of the most significant—and frequently overlooked—risks in retirement planning. While financial advisors routinely help clients prepare for market volatility, inflation, and longevity, the possibility of needing extended care can introduce financial and emotional challenges that are difficult to anticipate.

How can advisors help clients prepare for long-term care without overwhelming them with complicated insurance products and uncertain future costs?

During a recent Financial Experts Network webinar, Financial Planner's Process for Guiding Clients Through Long-Term Care Decisions, Jason Hochstadt shared a practical framework for evaluating long-term care risks, comparing traditional and hybrid insurance solutions, and helping clients maintain appropriate coverage as their circumstances change.

Drawing on his experience working with clients and evaluating actual insurance policies, Hochstadt emphasized a central principle: There is no single best long-term care solution. The right approach depends on each client's goals, financial resources, health, family circumstances, and priorities.

1. Long-Term Care Planning Starts With a Conversation, Not an Insurance Product

One of Hochstadt's most important messages was that long-term care planning should be integrated into the broader financial planning process.

Rather than immediately discussing premiums or insurance carriers, advisors should first understand the client's situation and what matters most to them.

Hochstadt introduced a framework based on four elements:

• Situation: Understand the client's financial position, health, family responsibilities, existing coverage, and anticipated changes.
• Problem: Identify potential challenges, including rising care costs, limited family caregiving resources, and the possibility of needing assistance for an extended period.
• Implication: Explore how a long-term care event could affect retirement income, investments, family members, and estate planning objectives.
• Need-Payoff: Determine what the client hopes to accomplish, such as maintaining independence, preserving assets, or reducing the burden on loved ones.

This framework helps advisors shift the discussion from purchasing insurance to developing a comprehensive strategy for managing a potentially significant financial risk.

Key takeaway: The most important question is not whether a client needs long-term care insurance, but how the client intends to pay for care if it becomes necessary.

2. The Financial Impact of Long-Term Care Goes Beyond Medical Expenses

Long-term care costs can vary dramatically depending on where clients live, the type of assistance they require, and whether care is provided at home or in a facility.

Hochstadt stressed the importance of using local cost estimates rather than relying exclusively on national averages.

For example, clients who prefer to remain at home may underestimate the expense of hiring caregivers for several hours each day. As care needs increase, these costs can become substantial.

The financial consequences can also extend to family members.

Adult children may reduce working hours, interrupt their careers, or contribute financially to support aging parents. Spouses may become primary caregivers, creating additional physical and emotional demands.

Advisors should also consider situations in which both spouses require care simultaneously.

Another common misconception involves government benefits.

Medicare generally does not cover ongoing custodial long-term care, although it may cover certain qualifying skilled nursing and home health services. Medicaid can provide long-term care assistance for eligible individuals, but financial eligibility requirements and covered services vary by state.

These limitations make advance planning especially important.

3. Traditional vs. Hybrid Long-Term Care Insurance: Understanding the Trade-Offs

A significant portion of the presentation focused on comparing traditional long-term care insurance with hybrid insurance products.

Traditional Long-Term Care Insurance

Traditional policies are designed specifically to help pay qualifying long-term care expenses.

They may offer substantial coverage relative to the initial premium and can include features such as inflation protection, shared-care benefits, and home-care provisions.

However, traditional policies generally require ongoing premiums, and insurers may increase rates on certain classes of policies, subject to applicable state requirements.

Hybrid Long-Term Care Insurance

Hybrid products combine long-term care coverage with life insurance or annuity features.

Depending on the contract, these policies may provide:

• Long-term care benefits if the insured requires qualifying care.
• A death benefit if long-term care benefits are not fully used.
• Cash surrender or return-of-premium features.
• Guaranteed premiums or limited premium-payment periods.

Hybrid policies may appeal to clients who are concerned about paying traditional insurance premiums without ever using the coverage.

However, these products often require larger upfront or scheduled premium commitments, and using long-term care benefits may reduce the amount ultimately available to beneficiaries.

Hochstadt emphasized that hybrid policies are not automatically better than traditional insurance simply because they include additional benefits.

The appropriate choice depends on the amount of care protection needed, affordability, underwriting eligibility, and the client's priorities.

4. Five Policy Features Advisors Should Evaluate Carefully

Hochstadt used actual policy illustrations to demonstrate why comparing premiums alone can be misleading.

1. Monthly benefit amounts

The monthly benefit determines how much coverage is available for qualifying care expenses. Advisors should compare these amounts against realistic local care costs.

2. Total benefit pool

The total pool represents the overall amount available for care. Two policies with similar premiums may provide substantially different levels of protection.

3. Inflation protection

Long-term care expenses may rise significantly over time. Inflation riders can help benefits grow, but they also increase policy costs.

4. Elimination periods

An elimination period functions similarly to a waiting period before benefits begin. Policies may count calendar days or days on which qualifying services are received, potentially producing very different outcomes.

5. Reimbursement versus indemnity benefits

Reimbursement policies generally pay covered expenses up to contractual limits, while indemnity policies provide a specified cash benefit once applicable claim requirements are satisfied.

Indemnity arrangements may provide greater flexibility in how benefits are used, depending on the contract.

Hochstadt also highlighted provisions such as shared-care riders, home modifications, caregiver requirements, and bed-reservation benefits.

Advisor takeaway: Evaluate what a policy will actually provide at different ages and under different care scenarios—not simply what it costs today.

5. What Should Clients Do When Long-Term Care Insurance Premiums Increase?

Premium increases are among the most difficult issues facing owners of traditional long-term care policies.

Clients may become frustrated when they receive a substantial rate increase, particularly after paying premiums for many years.

Hochstadt encouraged advisors to carefully review the available alternatives before recommending cancellation.

Potential strategies include reducing the monthly benefit, adjusting inflation protection, shortening the benefit period, or accepting some portion of the increase.

During the webinar, he presented examples of clients who successfully modified existing policies while retaining substantial long-term care protection.

In some cases, the accumulated growth in benefits allowed clients to reduce certain features without significantly compromising their original objectives.

The lesson was that an increase in premiums does not necessarily mean a policy should be surrendered.

Existing coverage may contain valuable provisions that are no longer available or would be considerably more expensive to replace.

Before making changes, advisors should compare the revised coverage, future affordability, and the consequences of losing existing benefits.

6. Why Starting Early Can Make a Difference

Hochstadt repeatedly emphasized the advantages of beginning the planning process while clients are relatively healthy.

Earlier planning can provide more flexibility in selecting products, qualifying for coverage, and spreading premium commitments over time.

Health conditions may limit eligibility, particularly for traditional long-term care insurance, which often involves more extensive underwriting than certain hybrid products.

However, Hochstadt also noted that clients in their 60s—and sometimes older—may still have meaningful coverage options.

Age alone should not determine whether a client explores long-term care planning.

The key is to evaluate the client's circumstances before an unexpected health event reduces the available choices.

7. Long-Term Care Planning Is an Ongoing Process

Like investment and retirement planning, long-term care planning requires regular review.

A strategy developed at age 55 may need adjustment at age 65 or 75 as financial resources, health, family relationships, and insurance costs change.

Hochstadt encouraged advisors to establish realistic premium expectations from the beginning, including leaving room in the budget for possible increases on traditional policies.

He also discussed the potential role of business-sponsored coverage, qualified long-term care insurance tax deductions, health savings accounts, and certain Section 1035 exchanges.

Because tax treatment and policy provisions vary, these strategies should be evaluated with qualified tax and insurance professionals.

Ultimately, ongoing monitoring helps clients preserve valuable coverage while adapting to changing needs.

Five Common Questions About Long-Term Care Planning

1. Does Medicare pay for long-term care?

Medicare generally does not cover ongoing custodial care, such as assistance with bathing, dressing, and other daily activities. Certain medically necessary skilled nursing or home health services may qualify for limited coverage.

2. Is traditional or hybrid long-term care insurance better?

Neither is universally better. Traditional insurance may provide substantial dedicated care benefits, while hybrid products may offer additional death benefit or cash value features. The appropriate choice depends on the client's goals, finances, and health.

3. Can clients in their 60s still purchase long-term care insurance?

Yes. Coverage may still be available, although premiums, underwriting requirements, and product choices vary by age, health, and insurer.

4. Should clients cancel a policy if premiums increase?

Not necessarily. Before canceling, advisors should evaluate options for reducing benefits, adjusting inflation protection, or modifying coverage while retaining important contractual protections.

5. Can long-term care insurance premiums provide tax benefits?

Qualified long-term care insurance premiums may qualify for favorable tax treatment, subject to applicable limitations. Employer-sponsored coverage, business structures, and health savings accounts can create additional planning considerations.

Final Thoughts: The Best Long-Term Care Strategy Is One That Fits the Client

Long-term care planning involves much more than selecting an insurance policy. It requires understanding how an extended care event could affect retirement security, family relationships, independence, and wealth preservation.

Hochstadt's presentation reinforced the value of a comprehensive, client-centered process that begins with thoughtful questions, evaluates realistic care scenarios, and considers multiple funding strategies.

For financial advisors, the opportunity is to help clients make informed decisions while they still have flexibility and choices.

The ultimate goal is not necessarily to eliminate every potential long-term care expense. It is to develop a realistic plan that protects the client's financial well-being, preserves important choices, and provides greater peace of mind for the entire family.

Additional Resources

• Medicare: Long-Term Care Coverage
• National Association of Insurance Commissioners: Long-Term Care Insurance
• IRS Publication 502: Medical and Dental Expenses
• IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans
• CareScout: Cost of Care

This article is based on the October 29, 2026, Financial Experts Network webinar featuring Jason Hochstadt. It is intended for educational purposes and does not constitute individualized insurance, tax, or legal advice. Product terms, underwriting requirements, and tax rules should be verified for each client's circumstances.