How shared long-term care insurance works for couples

One of the toughest parts of growing older can be seeing the person you've spent your life with get to the point where they need long-term care. This can be made even more difficult if there is a financial burden to bear as well as an emotional one. Long-term care can be expensive with the national average cost for a nursing home north of $100,000 per year, depending on where you live and what type of service you want.

Luckily, there is a way to mitigate some of the costs associated with getting older: long-term care insurance. If you're in a long-term partnership you can even share benefits with your partner, often referred to as "shared care."

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How shared long-term care insurance works for couples

Long-term care insurance could be the difference when it comes to getting the quality care you need in your old age.

"Long-term care insurance is a way to take greater control of your future while helping protect your loved ones from the impact of a possible long-term care event," says Jeff Beligotti, vice president and head of long-term care solutions at New York Life. "This type of policy gives you choices about the kind of care you can get, including whether you will receive care at home or in a facility."

If you are married (or in a domestic partnership), it could make sense to link your long-term care policies. Here's what you need to know.

Shared care basics

Long-term care insurance works like any other insurance policy – you pay premiums upfront in exchange for benefits later. In the case of long-term care insurance, the benefits consist of money to pay for services including nursing home care, in-home care, occupational therapy and even hospice care.

Shared care is often offered as a rider to a long-term care policy. Riders are essentially add-ons that enhance the benefits you get from your policy. Some other popular riders include a hybrid life insurance benefit, inflation protection and survivorship benefits. This rider will add a cost to your premium so be sure to shop around before committing to one provider.

To use a shared care rider, you and your partner first must both have a policy. You can buy them together, but technically each of you will have your own. The shared care rider links them and lets one partner use any unused benefits from the other. Let's say, for example, that you and your partner both have a $2,500 monthly benefit and a maximum lifetime benefit of $100,000. If your partner dies before using all of their benefits, the unused benefits are transferred to you at no additional cost. If your partner had used $25,000 in benefits and you hadn't used any at the time of their death, you'll now have $175,000 in benefits to work with when you need it.

Start looking for a long-term care insurance policy so you can feel more secure. 

Who should use shared care?

Any married couple or set of long-term domestic partners could benefit from using a shared care rider. The simple fact is that for a small monthly cost, you can make the most of the benefits you have already paid for if one of you were to die early or unexpectedly without having used all of the money available to you. If one partner thinks they might need extra care in old age shared care could be even more useful, giving them more money to pay for care once they no longer have the other partner to rely on.

How much long-term care insurance should you buy?

The question of how much coverage to buy is a personal one, driven by your own financial and medical situations. Getting help from a professional is often a good way to figure out your needs. 

"A good first step is a conversation with a trusted financial professional who can help you account for retirement assets, potential healthcare expenses in retirement and whether a stand-alone long-term care or linked-benefit policy may make sense for you," says Beligotti. 

After figuring out your retirement assets and how much you anticipate spending on healthcare, another thing to consider is where you plan to live in retirement – some states have their own programs to help with these costs. By taking these items into account you'll better be able to narrow down the correct amount of long-term care insurance to buy.

The bottom line

Long-term care insurance helps make sure you'll be able to pay for the services you need as you get older. If you have a partner, you can link your policy with theirs so that if one of you dies the other inherits their unused benefits. Not only does this potentially make life easier for the surviving partner, but it also makes sure you have the best chance to use the benefits you've paid for.