How to know if you need long-term care insurance

Byron Moore long-term care

Byron Moore

Moore for your Money


Question: How do I know if I need long-term care insurance? It’s so expensive.

Answer: What’s so expensive? Long-term care insurance…or long-term care?

I think the first question anyone needs to ask when considering the purchase of any kind of insurance is, “What am I trying to protect myself against?”

What outcome are you trying to avoid?

Some might say they want to have access to the broadest array of services available if they ever need long-term care. For example, people regularly say to me, “I don’t want to go into a nursing home – I want to stay at home as long as possible.”

Others will say, “I don’t want to spend all my money at the end of my life on a nursing home.”

Still others will say, “I don’t want to leave my spouse impoverished because long-term care expenses spent on me ate up all our assets and left her broke.”

And still others will say, “I want my kids to get my money, not some hospital or nursing home.”

All these are valid reasons for obtaining long-term care insurance, but they are not all the same reason. Knowing which kind of long-term care insurance and in what proportions requires a customized evaluation of your circumstances.

Let me see if I can give you a few parameters to get your thinking started. But before the process is over, you’ll need to find an experienced, qualified insurance agent that can guide you through your choices.

  1. What is your best case scenario? Of course, best case is that you never need long-term care and never spend a dime on long-term care insurance. You live a long happy life and slip comfortably into the night. As an example, let’s say you live to age 90 and die with a $1,000,000 net worth.
  2. What is your worst case scenario? Worst case is your needing long-term care for a long period of time, not having any insurance, and costing you a significant portion of your wealth. If someone is determined to avoid a nursing home, it is possible to receive long-term care services in one’s home. It’s a shock to most to learn that this is not the least expensive way to receive care, but is actually the most expensive way. It would be a little like trying to staff a nursing home for one person. The biggest cost is personnel. If you have to hire someone to “be there” 24 hours a day, seven days a week, you’re looking at spending around $100,000 per year!
  3. What is the next best scenario? Again, this would be you never needing a nursing home, but incurring the cost of long-term care insurance all along the way. No doubt the cost of long-term care insurance would reduce your ultimate wealth. But by how much? What if it cost you $100,000, such that your lifetime net worth reduced from $1,000,000 to $900,000? Would you take that deal?
  4. What is your next worst scenario? Wouldn’t this be your needing long-term care, but then having the long-term care insurance to cover it? You should expect that long-term care insurance would not cover every dime you would spend one long-term care, so there would be some erosion of your estate. Maybe even up to a fourth. Let’s suppose your lifetime outcome is $700,000 in this scenario.

It is important that you work with a professional to calculate your four scenarios – the ones I have written about above are only for illustrative purposes, not as representative of anyone’s situation, certainly not yours.

My point is that most people, once they have estimated these four situations, can make smart choices about their own long-term care.

As one wag has written, if you have not allocated any money to long-term care, you have essentially allocated all your money to long-term care.

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Byron R. Moore, CFP® is Managing Director / Planning Group of Argent Advisors, Inc. Mike Jones is Managing Director / Investment Group of Argent Advisors, Inc. Write to either at 500 East Reynolds Drive, Ruston, LA 71270 or call (318) 251-5800. This newsletter is available via email on a free subscription basis. You can subscribe by clicking here. Direct any questions, comments or suggestions to Byron Moore at or to Mike Jones at
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Argent Advisors, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Argent Advisors, Inc.. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.
Argent Advisors, Inc. is a registered investment adviser registered with the Securities and Exchange Commission. Argent Advisors, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. Argent Advisors, Inc does not offer tax, legal or insurance advice. If you are a Argent Advisors, Inc. client, please remember to contact Argent Advisors, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Argent Advisors, Inc.’s current written disclosure statement discussing our advisory services and fees is available upon request.


Argent Financial Group

Celebrating its 30th anniversary in 2020, Argent Financial Group (Argent) is a leading, independent, fiduciary wealth management firm. Responsible for more than $30 billion in client assets, Argent provides individuals, families, businesses and institutions with a broad range of wealth management services, including trust and estate administration, investment management, ESOPs, retirement plan consulting, funeral and cemetery trusts, charitable organization administration, oil and gas (mineral) management and other unique financial services. Headquartered in Ruston, Louisiana, Argent was formed in 1990 and traces its roots back to 1930.

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