Your Life Insurance Might Help Pay for Long-Term Care. Most People Never Check.

When people think about long-term care planning, standalone long-term care insurance is often the first option that comes to mind. Those policies can be worth exploring. But it's also worth understanding how certain life insurance policies may be customized to help with care costs during your lifetime.

Some people already own a policy like this and don't know it. Here's what's worth knowing.

The need for long-term care can hit your finances hard

Nearly 70% of people turning 65 today will need some form of long-term care during their lifetime, and the average length of care is about three years. Women tend to need care longer, about 3.7 years on average, compared with 2.2 years for men, according to the federal government's long-term care planning site.

Medicare generally does not cover the ongoing custodial care that makes up most long-term care: help with bathing, dressing, eating and getting around. Without a plan, those bills may fall directly on you and your family.

What that care costs in New Jersey

New Jersey is one of the more expensive states for care. CareScout's 2025 Cost of Care Survey puts the yearly median costs here at:

• In-home caregiver (44 hours a week): $86,944
• Assisted living: $101,550
• Nursing home, shared room: $153,300
• Nursing home, private room: $173,375

Three years in a private nursing home room at today's New Jersey median comes to about $520,000. That's the kind of number that can undo decades of careful saving.

Life insurance may be one piece of the plan

Some life insurance policies include features designed to help you access benefits for qualifying care needs. A few options to understand:

• Accelerated death benefit riders. Also called living benefit riders, these may let you access part of your life insurance death benefit while you're living if you're diagnosed with a qualifying terminal or chronic illness. The money may be used for care costs or other living expenses, depending on the policy. Any amount you access reduces the death benefit left for your beneficiaries, and benefits vary by policy.
• Chronic illness riders. These may let you access part of your death benefit if you become chronically ill and are permanently unable to perform at least two of six activities of daily living, such as bathing, dressing or eating. Definitions, qualifying conditions and benefit amounts vary by policy.
• Long-term care riders. Some life insurance policies include a dedicated long-term care rider that can pay benefits for qualifying care needs. Terms, eligibility and benefits can vary a lot by insurance company and policy.

These features aren't necessarily a replacement for a complete long-term care plan. They may be one part of a thoughtful strategy built around your goals, your resources and your family's priorities.

Planning earlier may give you more choices

Life insurance with chronic illness or long-term care riders is often easier to qualify for, and may cost less, when you buy it younger and in good health. Wait until after a diagnosis and the door may already be closed.

If you already have life insurance, reviewing your policy for living benefit features is a practical first step. It takes one phone call.

Five questions to ask about your current policy

1. Does my policy have an accelerated death benefit, chronic illness or long-term care rider?
2. What exactly triggers a payout? A terminal diagnosis only, or also needing help with two of six daily activities?
3. How much can I access, and is it a lump sum or monthly payments?
4. How much would using it reduce what my family receives later?
5. If the rider isn't there, can it be added, and what would that cost at my age?

Quick answers

Does Medicare pay for long-term care? Generally no. Medicare covers short skilled nursing stays after a hospital visit, not ongoing help with daily living.

What's a living benefit rider? A feature on some life insurance policies that may let you use part of the death benefit while you're alive if you meet the policy's illness conditions.

Is a rider the same as long-term care insurance? No. Rules, triggers and benefit amounts differ, and using a rider reduces the death benefit. Compare both before deciding.

Want a second set of eyes on your plan? Join our Retirement Webinar: Setting the Stage for 2027, or talk with an advisor.

Sources: U.S. Administration for Community Living, How Much Care Will You Need?; HHS ASPE, What Is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports?; CareScout, 2025 Cost of Care data for New Jersey (March 2, 2026). The three-year figure is the 2025 private-room median times three. Checked November 2, 2026. This is general information, not insurance or legal advice. Policy features, definitions and availability vary by insurance company and state.