Boomers may not be living in reality when making plans for their retirement. A survey conducted by Nationwide Financial finds the next generation of retirees not only underestimate how long they will live, but they also underestimate the cost of long term care by three times the actual price.

The survey may signal a serious problem for boomers who are nearing retirement age but don't have nearly enough saved to maintain their quality of life in the years to come. However, purchasing life insurance and long term care insurance may one strategy to pay for future expenses.

Boomers underestimate long term care costs

Nationwide Financial reports boomers anticipate their annual long term care costs to be $78,923. That figure is close to the actual annual cost of nursing home care today, but 37 percent of those surveyed say they neglected to consider inflation. When inflation is factored in, the annual cost of nursing home care is expected to be $265,000 in 2030, which is the year during which the last of the boomers will retire.

In addition to underestimating their long term care costs, boomers may also fail to properly plan for how many years they will live in retirement. At age 50, Americans say they believe they will live an average of 20.7 years in retirement. However, once they are done working, individuals says they expect to live 27.1 years in retirement.

Insurance may offer relief from high costs

While it may be too late for those already in retirement, younger boomers may want to consider purchasing long term care insurance or considering whether their permanent or whole life insurance policy can provide money for nursing home, assisted living on ongoing in-home care.

"The most commonly known long-term planning choice is the traditional stand-alone long term care policy. While it is very customizable, some people don't like the 'use it or lose it' nature of these products," said Kevin McGarry, director of the Nationwide Institute, in a written statement. "There are also some innovative products available -- including a long term care rider that can be added to life insurance coverage when purchased."

Even life insurance without a rider may be a source of money for long term care. Universal and whole life insurance policies build cash value that can be borrowed against for any reason. The ease of withdrawing money from these policies may make them an ideal back-up source of income in retirement.

However, before borrowing against a policy's cash value, individuals should consultant with a financial professional to determine how the withdrawals may affect their taxes or estate.