Your Portfolio and Your Business are Not a Long Term Care Plan

Most successful founders believe they can self fund long term care.

They have liquidity. They have investments. They own a business. If care is ever needed, they will write the check and move on.

That sounds reasonable until you ask a better question. Why would you volunteer to pay one dollar for every dollar of care when a properly designed insurance contract may create two or three dollars of qualified care benefits for every dollar you choose to reposition?

The distinction matters because long term care is not an abstract retirement concern. Seventy percent of adults who survive to age 65 develop severe long term care needs before death, according to the United States Department of Health and Human Services. Forty eight percent receive some paid care during their lifetime. A separate 2025 survey found that 82 percent of consumers would prefer to receive care at home.

Choice is expensive. In 2025, the national median cost for a nonmedical caregiver was $80,080 a year at 44 hours each week. Assisted living was $74,400. A private nursing home room was $129,575.

A seven figure portfolio can absorb those bills. That does not mean it should.

I think about my friend Jonathon.

He built a plumbing company from the ground up. It became a small empire. The business supported his family, created jobs, and represented years of early mornings, missed dinners, and calculated risk.

Then Jonathon became seriously ill and needed real care.

The company that had been built to support the family suddenly had to support the crisis. Money that should have protected payroll, growth, succession, and the next generation was redirected toward his care. His attention disappeared from the business at the same time the business needed him most.

By the end, the company had suffered and the family wealth had been meaningfully drained.

His illness was personal. The financial consequences were not. They moved through the business, the family, and the legacy all at once.

Founders do not like thinking about this. We are wired for motion. We build, solve, hire, sell, and move to the next problem. Illness feels like an interruption that belongs to somebody else.

But if the founder is the economic center of the family, a care event is also a business continuity event. It can force distributions at the wrong time, interrupt succession, reduce working capital, and turn long term assets into short term cash.

Children of founders understand the other side of that risk. They may inherit responsibility before they inherit control. They can become caregivers, operators, and financial decision makers in the same week.

The plan should account for that before the family is under pressure.

This is not an investment. It is an insurance policy built around a fixed annuity contract with qualified long term care benefits.

The important caveat is that you do not simply write a premium check and watch the entire amount disappear. You reposition a portion of existing nonqualified assets into a contract that retains value and earns declared interest. Depending on underwriting, the amount available for qualified care may equal two or three times the contract value.

Consider a family with $2 million of investable assets. Repositioning five percent, or $100,000, could create $200,000 or $300,000 of potential qualified care benefits. A $150,000 contract could create $300,000 or $450,000. At the 2025 national median private nursing room cost, $450,000 equals 3.47 years of care before inflation.

If qualified care is never needed, remaining contract value may still be available to the owner or pass to beneficiaries. That is the structural difference. One pool of capital can retain contract value, create multiplied care capacity, and preserve a residual value for the family.

Conventional long term care insurance can still be the right answer. It can transfer meaningful risk with less capital committed at the beginning. But premiums can be substantial, policy features vary, and some designs provide little residual value if benefits are never used unless additional features were selected.

The asset based approach has tradeoffs too. It may involve surrender charges, withdrawal limits, monthly rider costs, a market value adjustment, reimbursement rules, maximum monthly benefits, and underwriting. Nonqualified withdrawals can reduce future care benefits. Guarantees depend on the claims paying ability of the issuing insurer.

That is why this is not a product conversation. It is a capital architecture conversation.

I am not in the business of pushing a policy. I am in the business of making sure founders know which tools belong in the war chest.

Maybe this strategy fits. Maybe conventional coverage is better. Maybe the right answer is to retain the risk and invest the capital elsewhere. The answer depends on age, health, liquidity, tax basis, family structure, business succession, and what the money needs to accomplish.

If this raised a question about your own plan, that is the point. The earlier conversation is the better one.