Planning & legacy

A Different Approach to Long-Term Care for Wealthy Individuals

Long-term care insurance can be an important part of retirement planning, but for individuals with substantial wealth, it may not always be the most efficient solution.

For someone with significant assets, a different strategy can be worth considering: self-insure the cost of long-term care and use permanent universal life insurance—without an LTC rider—to protect the family’s legacy.

Self-Insure What You Can Afford

Wealthy individuals often have enough investment assets to absorb a potentially large long-term-care expense without jeopardizing their financial security.

Instead of paying LTC insurance premiums for decades, those individuals can retain their assets and use them for care if it becomes necessary.

If long-term care is never needed, the assets remain available for retirement, other goals, or inheritance.

Use Life Insurance to Protect the Legacy

Permanent life insurance can serve a different purpose: creating a dedicated inheritance for beneficiaries.

By purchasing universal life insurance without an LTC rider, the policy’s death benefit is intended to remain intact for the next generation rather than being consumed for long-term-care expenses.

This creates a simple division:

The “Use It or Leave It” Advantage

Traditional LTC insurance primarily provides value when long-term care is required.

A permanent life insurance strategy can provide value under either outcome.

If care is needed, investment assets can fund it.

If care isn’t needed, those assets remain part of the family’s wealth, while the life insurance can provide a death benefit to heirs.

The objective isn’t necessarily to spend less. It is to make the family’s dollars useful under more possible outcomes.

The Bottom Line

For individuals with sufficient wealth, the better question may not be:

“How do I insure my long-term care?”

It may be:

“Can I comfortably self-insure my long-term care while using life insurance to ensure the legacy I want my family to receive?”

For the right wealthy individual, this approach can offer flexibility, control and a potentially more meaningful legacy than traditional LTC insurance.

It isn’t right for everyone. The decision should consider the family’s assets, retirement spending, health, longevity, liquidity needs, insurance costs, estate plan and the specific guarantees and risks of the life insurance policy.

In simple terms: self-insure the care you can afford, and insure the legacy you don’t want to lose.