Introduction: A Sandwich Generation Perspective
As someone who lives every day in the balance — caring for aging parents, raising children, worrying about retirement, growing a business and trying to leave a lasting legacy for my children and the “G2” of INCOME & ESTATE PLANNING PARTNERS, P.A. — I know first-hand that long-term care (LTC) isn’t a “future problem” but a present one.
With growing life expectancies, rising healthcare costs, and families stretched thin — financially, emotionally, and physically — the question isn’t if you’ll need care, but how to pay for it in a way that protects your family, your legacy, and your peace of mind.
In this article, I want to lay out the options, trade-offs, and strategies so you can build a menu of choices — including using home equity, annuity-based solutions, life insurance with LTC riders, traditional LTC insurance — so when planning for long-term care, you’re not caught off guard.
Also, because caregiving isn’t a one-person act: we’ll talk about the informal caregiver, opportunity costs, and the relational impact.
The Rising Reality of LTC Costs
A private room in a nursing home now costs well over $100,000/year in many parts of the country; in-home care with health aides can easily run $60,000–$80,000/year or more. Most people over age 65 will need some form of long-term care during their lifetimes.
These escalating costs, combined with unpredictable health trajectories, make LTC planning essential. And yet, many people assume they’ll “self-pay” or have family do the caregiving. Those are valid parts of a plan — but risky if they’re the only ones.
Multiple Tools on the Menu — Not Just One Solution
Traditional LTC Insurance (stand-alone policies, “pure LTCI”)
Key Benefits
- Often provides higher LTC coverage per dollar
- Tailored benefits for nursing home, assisted living, or home care
- Protects assets and liquid savings
Risks / Trade-Offs
- Premiums can rise
- Some policies may be under-utilized (“use it or lose it”)
- Underwriting/health qualification required
- Might be more expensive if purchased late
Life Insurance with a Long-Term Care Rider (Hybrid Policies)
Key Benefits
- Dual benefit: death benefit if care not needed, LTC benefit if it is
- Predictable premium
- Any unused benefit passes to heirs
- Offers care flexibility (including home care or facility)
Risks / Trade-Offs
- Higher premium than life insurance without rider
- LTC benefit per dollar may be lower than pure LTCI
- Using LTC benefit reduces death benefit
- Complexity in rider terms (triggering, elimination period)
Annuities (with LTC Riders or Enhanced/Confinement Benefit Riders)
Key Benefits
- Can provide guaranteed income
- Certain riders escalate benefits when LTC triggers
- Can repurpose non-qualified assets
- Helpful when you want income plus LTC protection
Risks / Trade-Offs
- Surrender charges
- Lower pure LTC coverage
- Illiquidity early on
- Some complexity
- Benefit caps and rider costs
- Must understand the guarantee structure carefully
Using Home Equity
Key Benefits
- Home equity can be a powerful source of funds
- Options include reverse mortgage, sale, home equity loans
- Keeps costs manageable
- May allow staying in your home longer
Risks / Trade-Offs
- Using home equity reduces inheritance
- Possible tax or legal considerations
- May affect eligibility for Medicaid or other public benefits
- Interest/carrying costs
- Emotional attachment to the home
How Home Equity Fits Into the Picture
For many in the Sandwich Generation, the family home isn’t just where memories are; it’s one of the largest assets.
Tapping home equity can help:
- Pay premiums for LTC insurance, life + LTC rider, or annuity LTC riders
- Fund temporary LTC costs while insurance or rider benefits “kick in”
- Provide flexibility: pay out-of-pocket for home care so a loved one can stay in a familiar environment
But it’s not free. You must consider opportunity costs, legal, tax, and eligibility implications.
The Role, Cost, and Impact of Informal Caregivers
Caregiving has real costs, even when it’s “free” in dollars:
- Time: hours per week helping with daily needs
- Income loss: caregivers may reduce work hours or leave jobs
- Emotional & physical toll: stress, burnout, possible health issues
- Impact on family relationships: tension, guilt, resentment
Any LTC plan that ignores the caregiver cost is incomplete.
When to Act: Timing Matters
- Buying LTC coverage earlier (50s–60s) gives better rates and underwriting
- Hybrid or rider options are cheaper and more accessible before health issues arise
- Year-end tax planning is a good time to review options
- November is Long-Term Care Insurance Month
- September is Life Insurance Awareness Month
Building Your Strategy: What I Recommend for Sandwich Generation Families
- Do a realistic cost projection
- Inventory your assets
- Assess caregiver capacity
- Compare product types
- Plan for taxes & legacy
- Include a “trigger plan”
Why This Matters: Protecting More Than Your Money
- Protecting your family relationships
- Preserving legacy
- Reducing stress and uncertainty
- Managing opportunity cost
Conclusion: Don’t Wait — Build Your LTC Plan Now
- September: Life Insurance Awareness Month
- November: Long-Term Care Insurance Month
- December: Year-End Tax Planning
If you are caring for both aging parents and children, or worry about your own long-term care down the road, don’t let this time of year pass without taking action.
It’s not just about securing care. It’s about preserving dignity, family, and the things you value most.
About the Author
Craig E. Lytle, CFP®, is the founder and president of Income & Estate Planning Partners, PA, in Newark, Delaware, and a 2010 recipient of NAIFA’s Advisor Today Four Under Forty Award. He enjoys educating others and serving clients through personalized financial planning that helps them protect, grow, and transfer their wealth with confidence.
About Income & Estate Planning Partners
At Income and Estate Planning Partners, we help individuals and families take control of their financial futures through thoughtful, customized strategies. Our team specializes in income planning for retirement, tax-efficient investment solutions, and estate planning designed to protect your legacy. With a planning-first approach, we work to simplify complex financial decisions so you can feel confident about the road ahead. Whether you’re preparing for retirement, navigating major life changes, or planning for future generations, we’re here to walk alongside you every step of the way.
Disclosure
The information provided in this article is based on sources believed to be reliable; however, accuracy and completeness cannot be guaranteed. This content is for general informational purposes only and is not intended to provide specific legal, tax, or investment advice. Please consult with a qualified legal or tax advisor regarding your individual circumstances. Nothing in this material should be interpreted as a recommendation or solicitation to buy or sell any security.