Long Term Care and the Sandwich Generation – Plans that Help!!

May 7, 2024 | AEB Insights, Employee Benefits, Strategy Design

First of all, what is the Sandwich Generation?

The Sandwich Generation is defined as “those adults with at least one living parent age 65 or older and who are either raising a child younger than 18 or providing financial support to a grown child age 18 or older.” [1]


“Sandwich generation” refers to individuals in the middle of two significant responsibilities: caring for young children and elderly parents. Both of these responsibilities can be exhausting. For instance, a study found that parents remain sleep-deprived for up to six years after having a child.  As time passes, the challenges increase, such as managing homework, driving kids to soccer practice, supporting kids through conflicts with friends, and dealing with the added challenges of eldercare at every stage of development. [2]

Approximately 12% of parents with young children also care for older adults, as per the Pew Research Center’s 2018 data. These family caregivers do not receive any monetary compensation, yet they spend an average of 2½ hours daily on caregiving activities. Their contributions, valued at around $470 billion annually, are critical to the well-being of their families, communities, and the economy.

Besides providing direct care, sandwich generation members may also act as advocates, healthcare specialists, volunteer coordinators, and more, often while juggling full-time paid employment.  It’s easy for them to feel like they’re working multiple jobs caring for both their children and parents.

The emotional and physical toll of caring for an elderly parent with healthcare needs can be particularly stressful. It is not uncommon for the caregiver to suffer not only emotional distress but also become physically ill from lack of sleep and overall self-care. People can find themselves without much left in the tank at the end of the day. It can often feel like a giant tug-of-war when confronting the needs of the elderly parent and their own household.

The sandwich generation may struggle with tending to children, getting to work, tending to seniors, and finding a spare moment to grab a dentist appointment or pay their bills. [2]  “It’s easy to feel like you’re endlessly running around and perhaps like you’re struggling to fill each role.” [3]

Additionally, lifestyles have changed dramatically over the years, and it is no longer that common to find multigenerational households where grandparents live in the home with their adult children and grandchildren. Families are typically more spread apart as people pursue careers and interests in different locations. This caregiver isn’t quite in the sandwich generation per se because of not living proximally to the elderly parent, but the emotional stresses still exist. Investing in long-term care planning is essential to avoid the additional crush of long-distance separation. AEB will discuss these issues in a future Long Term Care Planning article in July 2024. In the interim individuals who need more information, please contact us!

On a positive note, there are Long Term Care (LTC) plans that work!

Don’t fall into the trap of waiting too long. The financial implications of elder care, particularly with the escalating costs of long-term care, are not to be taken lightly. Many families find themselves swamped by these expenses, often realizing too late that government aid is limited and leaves significant gaps that can severely impact savings and assets.

A successful approach entails engaging in these discussions with the aging parent(s) while they are still capable, in conjunction with knowledgeable professionals such as a reputable insurance broker like AEB, financial planners, and estate planning attorneys.

The emotional relief of planning input with an elderly parent is real. Waiting too long may only bring about a very different reality: a parent cannot provide their input (if they are not mentally competent) or is too old for an insurance provider to accept their application for long-term care insurance.

Long-term Care (LTC) Insurance is an excellent component of a benefits plan in addition to health care insurance or Medicare plus supplemental health insurance plans. As people age, their premium costs rise, and their insurability may also be impacted. Ideally, purchasing these plans while in their mid-50s is the most cost-effective period, and waiting too long may make them ineligible based on advanced age or poor health.

What does a LTC Insurance Plan cost?

The actual costs of an LTC Insurance policy depend upon many variables, including the applicant’s age and existing health.

As a generic example, the cost of an LTC policy with $5,000 per month in benefits for a 65-year-old male or female is $150 to $250 per month. That’s $1,800 to $3,000 per year—a notable sum, but examine the projected 2024 long-term care costs in Table 1 (Nursing Home) and Table 2 (Assisted Living)  below. There is a significant shortfall in the coverage meeting the actual fiscal needs.

Is LTC insurance alone enough?

Let’s talk about the financial impact. The cost of a nursing home can be astronomical, reaching a six-figure annual difference compared to the cost of long-term care insurance. Over the average nursing home stay (AARP cites 2.3 to 3 years), one can realize a quarter-million dollars in expenses! If a parent plans to leave an inheritance to their children, not having an LTC policy could wipe out your savings and put the ability to leave any inheritance at risk.

It’s essential to be aware of the rising cost of long-term care, whether in-home care, assisted living, or nursing home facilities. This financial burden can be overwhelming, especially for families who are not prepared. While government programs like Medicare offer some coverage, it’s important to note that their long-term care coverage is limited. This could leave significant gaps in your financial protection, potentially affecting your savings and assets.

Long-term Care (LTC) Insurance may not tick all the boxes and may be insufficient for the financial demands realized. Most LTC plans have a $250/day limit, and whatever isn’t covered by health care insurance or Medicare may be out-of-pocket.

Elder care is expensive. Many seniors think they have amassed significant savings in a large nest egg to cover their golden years; unfortunately, the amount often falls short of meeting the actual financial needs confronted. The cost of health care is rising, but it is usually the issue faced after a hospitalization where shortcomings are more pronounced. Planning needs to be better and more creative to protect family legacies and ensure sufficient funds cover the needs of an aging parent.  For those in the sandwich generation, both peace of mind and some respite care resources are essential to have on hand.

What tools can comprise a comprehensive long-term care plan?

To avoid potential pitfalls that force a family to confront liquidating assets, such as a forced sale of a home, in planning ahead, these are some of the tools to include in a comprehensive Long-Term Care Plan:

  • Long-term Care Insurance
  • Health Savings Accounts (HSAs)
  • Annuities that cover long-term care costs¹
    “Depending on the age and health of the buyer, the insurance company could pay up to 3x of the expenses of the premium. For example, a $100,000 deposit could cover up to $300,000 in LTC expenses.”[7]
  • Life Insurance Plans that include a rider allow elderly or sick policyholders to tap into their life insurance cash value for proceeds to cover LTC expenses.
Long-term care and the sandwich generation - plans that work 2

What are real Long Term Care Costs?

There are no restrictions on what a Nursing Home can charge.  Costs will vary based on location and the type of facility.  Not all facilities accept every form of insurance, Medicare or Medicaid plans.  Generally, when a patient is scheduled to be discharged from a hospital setting but requires short- or long-term care in a nursing home facility, social workers counsel families on available facilities that accept the patient’s insurance coverage.

Location, size, and age of the facility can impact rates that are often inclusive; however, extra services like physical or occupational therapy or memory care will likely incur additional fees. 

Table 1: Projected 2024 Nursing Home Costs

Monthly Cost

Annual Cost

Projected Cost for 2.3 Year Stay

National Median Costs

Semi Private Room$8,929$107,146
Private Room$10,025$120,304

Ohio Average Costs

Semi Private Room$8,616$103,394$237,806
Private Room$9,806116,672$270,645

Table 2: Projected 2024 Ohio Assisted Living Costs

Monthly Cost

Annual Cost

Projected Cost for 2.5 Year Stay



Proper long-term care planning is essential as it helps safeguard the family’s financial future, preventing the depletion of savings and assets earmarked for education, retirement, or other family goals. It also offers peace of mind for all generations, knowing that a plan is in place for potential long-term care needs, relieving emotional stress and uncertainty. Advanced planning also allows for more choices in the level and quality of care and the ability to stay home, if desired, ensuring quality care.

Several strategies can be used for long-term care planning, including purchasing long-term care insurance. This can provide financial coverage for future care needs. Importantly, it’s most cost-effective when obtained at a younger age, emphasizing the need for early planning and action.

Life insurance policies with long-term care riders (Hybrid Insurance Policies) offer flexibility, providing a death benefit that somebody can draw upon for long-term care needs. Health Savings Accounts (HSAs) offer those eligible a tax-advantaged way to save money for the use of qualified medical expenses, including long-term care. [6] [7]

Navigating the challenges of long-term care can be overwhelming for sandwich generation members. However, considering long-term care planning as an essential strategy not only safeguards savings and assets but also ensures the quality of care and can offer security and control for all generations involved.

Proper planning helps safeguard the family’s financial future, protects savings and assets meant for other goals, offers peace of mind, ensures quality of care, and provides more choices for the needed level and quality of care. Strategies for long-term care planning include:

  • Purchasing long-term care insurance.
  • Utilizing health savings accounts (HSAs) for eligible individuals.
  • Considering hybrid insurance policies with long-term care riders.
  • Annuities

Long-term care planning is not just a personal financial strategy but also a profound act of love and foresight that can ease caregiving burdens and secure a more stable, worry-free future for both the Sandwich Generation and themselves. With these complex responsibilities, the importance of long-term care planning cannot be understated—it’s essential.

Contact AEB to explore the options of long-term care insurance plans and other strategies to secure a stable and worry-free future.

Reference Sources²

Cited references with some as direct quotes.

  1. Pew Research
  2. Glenmeadow 
  3. Human Good
  4. Senior Living 
  5. AARP
  6. Prosperity Financial Group
  7. Top Life Insurance Company That Offers Single Premium Life Insurance With Long-Term Care Riders in 2024 

Other relevant external sources:

Review the following relevant AEB content:

Relevant AEB  Insight Articles:

¹ While AEB does not provide this service, we are happy to recommend providers who meet our clients’ needs.

²Outbound links all open in a new browser window or tab,

Data accuracy effective:  07 May 2024 (laws and statistics can change, and we will endeavor to update when they do)