Protecting a retirement nest egg and leaving behind a legacy includes planning for long-term care (LTC). Without long-term care insurance (LTCI), the astronomical costs of nursing home care, in-home care, or other long-term care options can drain the savings of even well-off people to zero.

According to Family Care Giving Alliance, Medicare only covers 20 percent of LTC costs. LTC statistics show that assisted living costs between $20,000 and $70,000 annually, and nursing home care averages $92,376 annually. Just a few short years in a nursing home or assisted living facility can decimate the savings of those without LTCI.

By 2020, experts expect long-term care costs to increase by 123 percent. With people living longer, many retirees without LTCI are forced to draw these gargantuan sums from their savings, with many going on Medicaid after the money's gone. LTCI protects these hard-earned assets, but premiums have skyrocketed in recent years. Premiums also increase depending on one’s condition. If already diagnosed with illness, premiums are likely to be much higher. Women’s premiums are usually higher as well due to supply and demand. Since women have longer life-spans, they are more likely to need LTC, causing higher premiums for women. For these reasons, it is vitally important to plan. A majority of retirees, especially women, will need LTC at some point. The sooner LTC is planned, the easier it can be to accommodate costs.

Seventy percent of Americans will need LTC in the future. As premiums rise, many doubt the need for LTCI; however, LTC is costly, and without insurance, retirees will quickly drain their life savings before going on Medicaid. Running out of money limits their choices and robs them of their legacies; both of which are worth protecting. It is wise for those planning for long-term care to work with trusted financial advisors who specialize in LTCI to help them find affordable options.

LTCI Is Especially Important For Single Women

Single people often have difficulties affording LTC because they have just one income. They also may not have family to rely on or may not want to act as a burden on their children.

LTCI is an essential part of financial planning among singles with businesses and assets to protect. It is especially important for single women in the sandwich generation to invest in LTCI, as women typically live longer than men. This increases the likeliness they will need LTC during their retirement years. Along with this, between taking care of their children and their aging parents, they’ll have little funds left for themselves.

However, since most women will need LTCI, women’s premiums are usually higher. Still, 57 percent of women above the age of 65 will need LTCI for over four years, and 18 percent will require services for over five years. This makes LTCI an important investment for single women, even despite the high premiums.

The best age for women to buy LTCI is in the mid-50s. Premiums are far lower at this age than for those who buy LTCI in their 60s or 70s. Policy applications are also less likely to have been stricken by disqualifying health conditions.

Dealing With High Premiums

It's important to plan LTCI coverage carefully as premiums are expensive and on the rise. The average annual premium as of 2018 stands at $2,700. The rising premiums stem from insurers’ underestimation of their liability and the rising cost of care itself.

Thankfully, there are several ways to make LTC affordable.

Gap coverage. Those who have funds to cover some of the expense of long-term care can make premiums affordable by buying a less costly plan that provides partial coverage. This requires a careful calculation of funds available for LTC and the plan's coverage.

LTCI-life insurance hybrids. Many financial advisors recommend this option as a way of saving on LTCI premiums while still carrying adequate coverage. LTCI-life insurance policies pay out whether or not you need care.

Unlike LTCI, the premiums never change. Single women get the most benefit from these plans.

Policy changes. As policyholders' age and their health status change, insurers have the right to increase premiums, a dangerous situation for those on a fixed income. Also, insurance companies are gaining government approval for increases due to their underestimation of liability.

For example, regulators granted Genworth permission for a 58 percent premium hike. Those facing premium hikes they can't afford must reduce the benefit amount, benefit period or inflation rate.

Experts recommend policyholders under age 70 reduce the benefit amount. The inflation rate clause requires the insurance company to increase benefit amounts each year. Younger people are likely to regain the benefits they reduced over time.

Older policyholders are better off reducing the inflation rate because they are more likely to file a claim sooner. Experts caution against reducing the benefit period. With people living longer, the possibility of outliving the coverage has become too great.

Americans, as a whole, are ill-prepared for LTC expenses. This creates a dangerous situation where lower-income people are limited to options provided by Medicaid, and retirees with hefty savings can lose it all, destroying any plans for a legacy.

Working with a trusted financial planner can help pre-retirees and retirees create an effective LTCI strategy. It is important to remember that although LTCI might seem out of reach, there are always options.

Lisa Odoski is the Vice President at TFG Wealth Management, an independent financial advisory firm headquartered in Newtown Pennsylvania. To learn more about TFG Wealth Management, please visit tfgwealth.com. Follow TFG Wealth Management on Twitter @TFG_WealthMgmt.