Long-term care is one of the biggest wild cards in retirement planning. The costs can be staggering, yet traditional long-term care insurance has become increasingly expensive, complicated, and difficult to qualify for. Many people want protection, but hesitate to lock themselves into policies that may never be used — or that strain their retirement budget. The good news? There are viable alternatives to long-term care insurance.
Why You Need a Plan for Long Term Care
About 70% of people who turn age 65 will need some type of long-term care in their lifetime, according to the U.S. Department of Health and Human Services, but few are prepared to pay for that care.
The costs of long-term care are exorbitant – ranging, on average, from $26,000 to $128,000 a year according to this 2024 survey – and are not covered by Medicare.
Despite that reality, most clients are “pretty much in denial” about long term care planning, says San Francisco-based certified financial planner and public accountant Larry Weiss, with NEXT Financial Group. Typically, the only people interested in long term care insurance (LTC insurance) have had to take care of their parents.
“Most clients aren’t aware of the needs or likelihood they’ll need long term care; they only know that long term care insurance, from their perspective, is too expensive,” says Weiss. It can also be ineffective.
11 Alternatives to Long Term Care Insurance
In this guide, we’ll walk through 11 alternatives to long-term care insurance — approaches that can help you protect your future, preserve your independence, and feel more confident about what lies ahead.
Most of these options can be modeled in the Boldin Retirement Planner. It is easy to compare your options and see what really works for you.
1. Staying healthy and never needing long term care
Yes — the best-case scenario is that you remain healthy and never need long-term care at all. It’s the “plan” everyone hopes for. But the reality is that health needs are unpredictable, and there are no guarantees. Relying solely on good fortune is not a strategy.
Quick Takeaway: Hoping for the best is natural, but planning for the “what ifs” is essential.
2. Self Fund with Savings
If you’ve built significant savings, you may prefer to fund a potential long-term care need directly rather than purchase insurance. This approach gives you full control over how your money is used. You can even earmark specific assets and invest them with this purpose in mind.
The Boldin Planner makes it easier to stress-test this option. You can model a long-term care event in your plan, see how much you might need to spend and when, and evaluate the impact on your overall assets and lifestyle.
Pros: Maximum flexibility and control over your money.
Cons: Depending on your health and length of care, costs can quickly add up. In some cases, self-funding may end up draining more wealth than other approaches such as insurance, hybrid policies, or annuities.
Quick Takeaway: Self-funding works best if you have ample resources and want flexibility — but it comes with the risk of spending far more than expected.
3. Maintain Life Insurance with a Long-Term Care Rider
For people hesitant to pay premiums for a product they may never use, hybrid life insurance can offer a middle ground. By adding a long-term care (LTC) rider to a life insurance policy, your money pulls double duty: if you need care, the rider helps cover costs; if not, your heirs still receive the death benefit.
As insurance expert Weiss explains: “Buying a rider that increases the LTC benefits will allow you to get more money over time. It’s not the perfect solution, but these policies can be structured in flexible ways — single life, joint life, and more.”
Pros: You get flexibility and a guaranteed benefit — either LTC coverage or a death benefit. This can feel more efficient than paying into a traditional policy you may never use.
Cons: These policies can be expensive, and benefits may not always keep pace with inflation. Liquidity can also be an issue, meaning your money may be tied up in the policy.
Quick Takeaway: Hybrid life insurance offers peace of mind that your premiums won’t go to waste — but the trade-offs are cost, complexity, and potentially limited coverage.
4. Get a Deferred Lifetime Annuity
A lifetime annuity is essentially income you buy — a steady stream of payments in exchange for a lump sum. One increasingly popular strategy for covering a potential long-term care need is purchasing a deferred lifetime annuity, which begins paying out at a future date when you’re more likely to need long-term care.
Here’s how it works: you invest a portion of your savings today, and in return, you lock in monthly income that starts later in life. If you end up needing long-term care, that income can help cover costs. If you don’t, the payments can still enhance your lifestyle. Many annuities also offer riders such as cost-of-living adjustments, principal guarantees, or survivor benefits for added protection.
With Boldin’s Retirement Planner, you can model how a deferred annuity fits into your plan — or use the lifetime annuity calculator to see exactly how much income your savings could generate.
Pros: Dual-purpose benefits — the annuity provides income whether or not you need care. Plus, the guarantee of lifetime income brings peace of mind no matter how long you live.
Cons: Limited liquidity, potentially higher costs and fees, and lower growth potential compared to other investments. Without inflation protection, your purchasing power may also erode over time.
Quick Takeaway: A deferred lifetime annuity can provide valuable “just in case” coverage and guaranteed income for life — but it comes with trade-offs in flexibility and growth.
5. Sell Your Home to Cash in on Home Equity
For many people, their home is their single most valuable asset — and it can also be a powerful source of funding for long-term care. Selling a home outright can generate significant cash to pay for care, especially for individuals without a spouse, partner, or dependent living there. Even downsizing to a smaller home can free up equity while still providing a comfortable place for loved ones.
Pros: Selling a home lets you tap into an existing asset to fund care, potentially protecting your retirement savings and investments. Downsizing can also simplify your lifestyle while releasing equity.
Cons: Selling a home is a major life event — stressful, time-consuming, and often impractical during a health crisis. It’s not something you want to be forced into at the last minute.
Quick Takeaway: Your home can be a financial safety net, but selling should be part of a proactive plan — not a rushed decision in the middle of a care emergency.
6. Tap Home Equity with a Loan or Line of Credit
Your home isn’t just a place to live — it’s also a source of borrowing power. Two common ways to unlock that value are a Home Equity Line of Credit (HELOC) or a home equity loan.
- A HELOC acts like a revolving line of credit: you borrow as needed and pay interest only on what you use.
- A home equity loan (sometimes called a second mortgage) gives you a lump sum upfront, with fixed monthly payments over time.
Pros: Both options can provide flexible or immediate cash to cover long-term care costs without forcing you to sell your home. Many retirees open a HELOC before retirement, keeping it in reserve as a safety net for future expenses.
Cons: You’ll need to qualify based on income and credit — which can be harder once you’re retired. Monthly payments also create a new financial obligation, and interest costs can add up.
Quick Takeaway: A home equity loan or HELOC can be a smart backup plan for funding care, but it works best if secured early — while you still have the income and credit profile to qualify.
7. Sell Other Valuable Assets
Beyond retirement accounts and savings, some families hold valuable assets — artwork, collectibles, jewelry, antiques, land, or even a second home — that could be sold to help cover long-term care costs.
Pros: Selling a high-value asset can generate a large lump sum relatively quickly, providing another layer of financial protection without tapping into core retirement savings.
Cons: These assets are often tied to family history or sentimental value, making the decision emotionally difficult. In addition, non-financial assets can be hard to sell quickly, and their market value may fluctuate even more than stocks or bonds.
Quick Takeaway: Other assets can serve as a financial backstop, but selling them often comes with emotional trade-offs and uncertain timing. It’s best to consider this as a last-resort option rather than a primary funding strategy.
8. Get a Reverse Mortgage
If your long-term care needs can be met at home — often a more cost-effective and comfortable option — a reverse mortgage may help cover the costs.
Most reverse mortgages are offered through the federally insured Home Equity Conversion Mortgage (HECM) program. They allow homeowners age 62+ to tap their home equity as a non-recourse loan, meaning you can’t owe more than the home’s value.
The key is making sure your home is suitable for aging in place. As Weiss explains:
“If you’re going to do a reverse mortgage, you need to really make sure you can live in your house for a long period of time so that it makes sense.”
Pros: A reverse mortgage can provide cash while letting you remain in your home. For some, it’s an ideal way to fund care without selling.
Cons: Reverse mortgages come with costs and fees that can feel steep, and you must live in the home to keep the loan in good standing. That makes them less flexible if you later need to move into a facility.
Quick Takeaway: A reverse mortgage can turn your home into a financial safety net for in-home care — but it only makes sense if your house truly works for aging in place.
9. Run Through Savings and Qualify for Medicaid
For many Americans, this is the default path: use personal savings until they’re depleted, then turn to Medicaid for support. In fact, according to the Kaiser Family Foundation, Medicaid is the primary payer of long-term care, covering about 60% of all nursing home residents.
Pros: This approach ensures that you will not be left completely without care — Medicaid provides a safety net once your resources are exhausted.
Cons: The spend-down process can be financially devastating, eroding assets you may have wanted to preserve for a spouse or heirs. In addition, Medicaid typically limits your choice of facilities and services, which may mean accepting a standard of care below what you would prefer.
Quick Takeaway: Medicaid is a vital backstop, but relying on it means losing control over both your finances and your care options. It’s best considered a last resort rather than a primary plan.
Learn more about this option.
10. Rely on Family Members
For many households, long-term care is shouldered by family. Spouses, adult children, and sometimes extended relatives often step in to provide support — from daily tasks to full-time caregiving.
Pros: Relying on family can keep care more personal, familiar, and affordable. It may allow you to remain at home and avoid institutional settings.
Cons: Caregiving can place heavy emotional, physical, and financial strain on loved ones. It can affect their careers, health, and relationships. If this is your plan, it’s critical to have open conversations in advance and make sure everyone understands the responsibilities involved.
Quick Takeaway: Family care is common, but it isn’t free. It comes with real trade-offs, so be honest about whether it’s realistic for your situation — for both you and your loved ones.
11. Live in Cohousing
For those who want to age in place, senior cohousing offers a community-driven alternative. Charles Durrett, architect and author of Senior Cohousing: A Community Approach to Independent Living, describes it as a modern version of small-town care — neighbors supporting neighbors.
In cohousing communities, seniors often pool resources to hire caregivers who serve multiple residents. This shared approach makes professional support more affordable than hiring individual caregivers. Durrett notes the contrast: his father’s private caregiver cost $7,000 a month, while assisted living for his mother ran $4,500 a month. By comparison, residents in cohousing communities often report saving $200 to $2,400 per month, thanks to lower housing, energy, and transportation costs.
Pros: Cohousing can lower costs, reduce isolation, and provide day-to-day support that improves quality of life.
Cons: These communities can be hard to find, may lack consistent regulation, and require a strong commitment to collective living.
Quick Takeaway: Cohousing isn’t for everyone, but for those who value community, collaboration, and independence, it can provide both meaningful connections and a more affordable way to navigate long-term care needs.
While there are monthly fees to live in a cohousing community, it’s typically less expensive than facility-based long-term care, considering Genworth’s Cost of Care Survey.
Have a Plan, Make Sure it Works with Your Finances, and Communicate it to Family Members
All of the above options are viable ways to deal with a future long term care need. Use the Boldin Retirement Planner and run scenarios to help you assess which options is best for you.
And, whatever alternative to long term care insurance you choose, make sure your wishes are communicated to family members.
When the need for long-term care arises, it is an emotional experience for everyone involved. It is best that everyone know and have buy in on your desires.
Updated October 2025