From 2021 to 2022, home health aide costs rose by a whopping 12.5%, as the growing senior population ages into their care needs, and are increasingly seeking home and community-based care. Members of the sandwich generation, those who have experience caring for both young children and aging parents, face increasing financial responsibility and challenges as the cost of elder care rises. Family caregivers who leave the workforce  forego over $300,000, on average, in lost income and benefits, on top of more than $7,000 in out-of-pocket costs, such as transportation.

With these high and increasing costs for extended care, it is so important to have conversations with aging parents and loved ones about plans for affording necessary care. For the 84% of retirees who expect to rely on family members for care needs, insurance can be a good option for avoiding high out-of-pocket costs. When discussing long-term care needs, explore options for hybrid life insurance, long-term care insurance, and short-term home health care insurance. Depending on your loved ones’ ability to qualify and pass underwriting standards, and to afford premium payments, they may be able to manage coverage themselves, or you can discuss the possibility of adult children or loved ones who are still in the workforce paying for insurance.

The thought of buying life insurance for loved ones can create stress and tension, as no one wants to think about death and the ultimate loss of a loved one. It’s important to understand however, that the costs of care for family caregivers can create multi-generational financial challenges, as adult children continuously face the responsibility to care for parents and, in doing so,  deplete their own retirement savings. Hybrid life insurance can serve as an investment, offsetting costs for long-term care services and supports, and guaranteeing benefits will be paid to beneficiaries, typically the family caregivers themselves, even if long-term care is never needed.

Begin a conversation with your family members, so you can understand the current level of preparedness for costs with age across family members. Once you’ve established this base level of knowledge, discuss out-of-pocket affordability and, if this is not accessible, review insurance offerings that suit the setting and type of care your loved one wants, whether home-based or facility based. Initiating this conversation and possibly helping cover insurance premiums , can allow your loved ones to receive the care they want when they need it, and can offset the financial burden that arises from long-term care needs in a family.