Why is accounting for unpaid help in any analysis of long-term care costs important?

Two reasons:

1. A great deal of help at home is unpaid - a spouse, a child, a friend; in fact, unpaid help is much more commonly used than paid help.  This represents a great burden on the helpers.  But the need for long-term care (whether it is needed and, if needed, how much help is needed) is uncertain.  In planning, it is critical to have an analysis of the likelihood and  magnitude of the needed help, both for the retiree and for the potential helpers.

2.  In any sale of long-term care insurance (be it policy or rider), a selling point often used is the pointing out to the prospective purchaser that the insurance can help him/her avoid being a burden on their family/friends.  But in many instances, depending on the amount of help needed as well as the premium for the insurance, there still may be a need for significant unpaid help.  An analysis of the insurance is critical to any retirement plan.