What Is The Cost Of Long-Term Care Insurance? (2024)

Long-term care (LTC) insurance helps pay for long-term care like nursing homes, hospice care, adult day care and getting assistance with activities of daily living, such as bathing, dressing and eating.

Long-term care insurance costs differ based on multiple factors. LTC rates aren’t set and can increase as you age. People with pre-existing conditions or health problems may have trouble finding long-term care insurance or face hefty long-term care insurance costs.

Average Cost of Long-Term Care Insurance

The average cost of long-term care insurance is $1,200 a year for a 60-year-old man for $165,000 coverage, according to the American Association for Long-term Care Insurance (AALCI). The average long-term care insurance cost for a 60-year-old woman is $1,960 for the same coverage.

Married couples can buy a more affordable joint policy. For instance, married couples who are 60 years old pay $2,550 annually on average for a joint policy with $165,000 coverage, but that comes with a combined coverage limit rather than two separate limits.

LTC costs increase over the years. Long-term care insurance policies can factor in future inflation costs, such as adding 1% to 5% to the benefits each year. Adding that provision increases your LTC rates, but provides a bumper to help offset inflation growth.

Average Long-Term Care Insurance Costs by Age

Buying a long-term care insurance policy doesn’t mean that’s the rate you will pay for the next 20 or 30 years, though. LTC insurance costs may increase over the years and rate hikes can be significant.

Factors That Affect the Cost of LTC Insurance

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	Age Costs increase as you age. The younger you buy coverage, the less you will pay for coverage initially.
	Coverage Amount Long-term care insurance policy specifics influence costs, including a policy’s pre-set daily limit, maximum benefits and the elimination period.
	Gender Women pay more for long-term care insurance because they tend to live longer than men and are more likely to need long-term care.
	Health If you have pre-existing conditions, long-term care insurance companies may deny coverage or charge you more coverage than a healthier person.
	Individual or Joint Coverage If you’re married, a joint long-term care insurance rather than two individual policies can save money. The difference is that a joint policy is one pool of money a couple can use to pay for long-term care insurance. Having two individual LTC insurance policies costs more because they are two separate policies with separate coverages.
	Insurance Company Just like other types of insurance, long-term care insurance rates vary by company. It’s wise to get quotes from multiple long-term care insurance companies for the same level of coverage, so you can compare costs accurately.
	Riders Long-term care insurance policies may have riders that provide additional coverage. One example is inflation protection, which increases long-term care coverage amounts based on an annual percentage, such as 1% or 5%.

Long-Term Care Costs Without Insurance

Long-term care insurance can be expensive, but that’s because long-term care, like nursing homes and assisted living, can be pricey.

The federal government’s Administration for Community Living says the exact cost of long-term care varies by the duration and type of care, the providers and where you live. Other factors that influence costs include the time of day when home health and home care services are needed.

When To Buy Long-Term Care Insurance

It’s wise to buy long-term care insurance before your 50s, so you can have it in place if you need long-term care.

The bulk of long-term care insurance claims happens after a person turns 75. The AALTCI says only 19% of LTC insurance claims begin before a person is 75 years old.

Pros and Cons of Long-Term Care Insurance

Long-term care insurance can play an important role in your long-range financial plan, but long-term coverage isn’t cheap.

Long-Term Care Insurance Pros

• Helps supplement health coverage. Medicare covers medical issues but may not help pay for long-term care needs.
• Offers long-range financial security. Living on a fixed income in retirement years is hard enough without having to fork over thousands each month for long-term care.
• Helps your loved ones. If you wind up needing long-term care, your loved ones may have to figure out a way to pay for care.

Long-Term Care Insurance Cons

• Not everyone is eligible. A long-term care insurance company may reject coverage if you have pre-existing conditions, in poor health, over 70 or already in long-term care.
• LTC insurance can be expensive. If you’re in poor health, an insurer may charge you higher rates than other members.
• Not many insurance companies offer LTC coverage. The AALTCI says only six insurance companies offer these policies: Bankers Life, Mutual of Omaha, National Guardian Life, New York Life, Northwestern Mutual and Thrivent.

How to Deal With LTC Insurance Rate Increases

A sudden long-term care insurance cost increase can leave you scrambling to find money to pay for coverage, but there are ways to keep your policy and not pay the full rate hike.

The National Association of Insurance Commissioners offered solutions that can soften the blow:

• Reduce the policy’s daily benefit, which is the maximum amount the policy will pay by day.
• Decrease the benefit period, which is the length of time a policy covers LTC claims, and maximum benefit, which is the amount of the policy.
• Reduce inflation protection. Long-term care policies may have increased coverage based on inflation. You can lower the amount to save money but may not have enough coverage later when you need it.
• Increase the elimination period, which is the time before a policy begins paying for LTC claims.

If you’re wondering how save for long-term care without LTC insurance, consider these options:

• Add a long-term care rider to life insurance: Life insurance policies sometimes offer life insurance riders that you can add to a policy when you buy it. One type of rider is a long-term care rider, which lets you tap into your policy’s death benefit to pay for long-term care while you’re still alive. Money taken from a life insurance policy means your survivors will get a lower death benefit.
• Pay with savings: You can pay for long-term care by using savings, a pension, retirement account or other account.
• Health savings accounts: HSAs are accounts connected to high-deductible health insurance plans that help you save for future healthcare needs. Long-term care is one of many types of healthcare eligible for HSA funds.
• Medicaid: Medicaid may pay for long-term care services if you’re eligible.
• Medicare: Medicare only covers specific long-term care programs, including a portion of care in a skilled nursing facility and care provided by a home healthcare agency if you’re confined to your home. Medicare doesn’t cover other long-term care costs.

Cost of LTC Insurance Frequently Asked Questions (FAQs)