We're living longer. Do you have a care plan?

We live in a time when people are living longer, with the average life expectancy for older adults in Connecticut around 79 years. As we age, it's important to consider a long-term care policy, so our loved ones don't have to worry about the future, and we can focus on living our later years with dignity and peace of mind.

Long-term care costs are increasing significantly due to inflation and growing demand. Most of us have the mind-set of "I'm too young to worry about that," and that is exactly why thinking about long-term care insurance early is important. The earlier you plan, the more choices you'll have, and the better positioned you'll be to protect your health and finances. Depending on your situation, there are several ways to prepare for potential long-term care needs.

The first option is the most common. With traditional long-term care insurance, you pay a premium, and if you ever need care, the insurance company helps cover a portion of the costs. These policies generally cover expenses like in-home assistance, assisted living, or nursing home care, with a daily or monthly benefit limit and a waiting period before benefits kick in. Many policies also include inflation protection so that benefits keep up with rising costs. While this approach can provide valuable financial relief, it can be expensive, and premiums may rise over time. Additionally, if you never make a claim, those premiums aren't refunded, therefore it's important to weigh the potential benefits against the costs. According to the American Association for Long-Term Care Insurance, a healthy 55-year-old couple can expect to pay between $2,000 and $4,000 per year, depending on coverage and inflation options.

Hybrid policies combine life insurance with long-term care coverage in a single plan, providing you with value no matter what the future holds. You can use the policy to help cover care costs, and if you don't use those benefits, the life insurance proceeds go to your beneficiaries. Typically, benefits are triggered by a doctor's certification that care is needed, and a portion of the death benefit is converted to pay for expenses. These hybrid policies typically have higher upfront costs than traditional long-term care insurance, but premiums are usually fixed, benefits are guaranteed, and unused funds still pass to your beneficiary.

Finally, some people choose to self-fund their long-term care. This approach means setting aside dedicated savings or investments to cover potential care expenses. Many individuals also work with an attorney to establish a trust to help protect their assets from being depleted by long-term care expenses. Self-funding gives you control over your resources and lets you choose the type of care you want. If you don't end up needing care, the funds remain intact for your beneficiaries. While this strategy requires careful planning and disciplined saving, it can be an effective way to preserve your financial legacy and make sure your family isn't burdened with unexpected costs.

While it's not always easy to think about long-term care, taking time to plan today can make all the difference tomorrow. Exploring your options early allows you to make confident decisions that protect your well-being and preserve what matters most to you and your family. It is also important to consider speaking with a trusted advisor to help guide you through your options and help you make the decision that will best fits your needs and goals.

Joel Johnson is managing partner of Johnson Brunetti, a Connecticut-based wealth management retirement firm.