The New Big Thing in Long-Term Care Insurance? “Shared Care”

With costs of long term care mounting for people approaching retirement age, many are wondering how they are going to pay for ongoing costs associated with living in a retirement community or assisted living community. 

A relative up-and-comer on the long term insurance front, “shared care,” is gaining popularity, a Businessweek article wrote this week. This makes long term care insurance more feasible by providing expanded coverage for couples at a lesser cost than other options offer, Businessweek writes. 

Under these joint policies, couples purchase a combined pool of benefits that can be used by either or both spouses.


Like most everything in the world of long-term care insurance, it’s complicated. But what’s clear is that fast-rising costs have made shared care a more appealing option. New long-term care insurance policies cost 30 percent to 50 percent more than five years ago, according to the American Association for Long-Term Care Insurance.

“When I explain how it works and what you get, most people like shared care a lot,” says Brian Varian, long-term care insurance consultant for insurance brokerage Marsh Inc. in Woodland Hills, Calif. “It’s very favorable for couples.”

A look at the shared-care option within the broader context of changing long-term care insurance…


Q: How does shared care work?

A: Instead of purchasing a future pool of benefits for each spouse, the policies are combined into a pool they can each use. So, buying a three-year shared care policy each gives a couple up to six years of benefits; each buying a five-year policy gives them 10.

If one spouse develops a need for extended long-term care, such as from Alzheimer’s or a stroke, he or she could access most or all of the benefits. And if one dies without having used any coverage, the full benefits generally transfer to the surviving spouse.

Q: Does it cost extra?

A: Shared care costs more than separate policies with the same benefit period. But it can allow you to buy a shorter, less expensive policy, knowing that there ultimately is a larger combined pool of benefits to draw from.

For example, two typical three-year policies with the shared care rider will cost roughly 14 percent to 17 percent more than two separate three-year policies, according to Jesse Slome, the insurance association’s executive director. But that could still be more cost-effective in the long run by ensuring that one of them can get as much as six years of coverage if needed — double the length of the policy…. 

For more Q&A, read the full Businessweek article.  

Written by Elizabeth Ecker

Companies featured in this article: