The older you get, the more likely you will have long-term care needs like help with activities of daily living, such as getting dressed. If you live at home or in a care facility like a nursing home or assisted living, the costs of these services can be expensive in the long run. Having a long-term care insurance plan in place can help you afford care that suits your future needs.

What is long-term care insurance?

Long-term care health insurance is a special type of insurance policy that gives you benefits to pay for services such as in-home care or skilled nursing care. Depending on your plan and benefits it may also cover some of the following options:¹

Similar to car insurance, you will need to pay a monthly premium. A premium is a fee that you pay to maintain your policy. Once you actually need your policy benefits, you can file a claim with your insurance company.

Long-term care insurance can help Medicare enrollees pay for nursing home care since Medicare only pays for stays up to 100 qualified days.² It is also an alternative for people who are ineligible for their state’s Medicaid program to pay for their long-term care.³

How do I get long-term care insurance benefits?

After filing a claim to get your long-term care insurance benefits, you must reach a benefit trigger. A benefit trigger is the standard the insurance company uses to see if you qualify for benefits.⁴

A nurse or social worker will evaluate your cognitive abilities—how well you’re able to think and make decisions—and your ability to do activities of daily living, such as:⁵

After the evaluation, your insurance company’s care manager will approve a care plan that lists what benefits you should receive.⁴ Depending on your coverage, your insurance will usually pay benefits if you have trouble with cognitive abilities, or trouble with two or more activities of daily living.⁴

After the benefit trigger, you must next meet the elimination period. Also known as a “benefit waiting period” or “deductible period,” an elimination period is how long you must wait after the benefit trigger before you receive your benefits.⁴ You will have to pay for any long-term care or in-home care services during this period, which could range from one to three months long.⁴

Once the elimination period ends, most long-term insurance plans pay benefits for your long-term care up to a daily limit until you’ve reached your policy’s maximum lifetime limit.6 Some policies also allow married couples to share long-term care insurance coverage. This means a spouse who has reached their maximum lifetime limit could use their spouse’s benefits.⁶

When do I need long-term care insurance?

Since one out of every five adults age 65 and older will need insurance for long-term care,⁷ it’s recommended to buy a policy between the ages of 50 and 65.⁸

Insurance companies will evaluate your health before deciding whether to approve or deny you for a policy. If you wait until you need long-term care or have ongoing health issues, you might not qualify.⁹

How much does long-term care insurance cost?

The cost of your long-term care insurance will depend on the company you choose and the following factors:⁶

• Age
• Health
• Gender
• Marital status
• Level of coverage

For example: For a healthy 55-year-old man, the average cost of long-term care insurance is $900 a year for a $165,000 policy.¹⁰ However, a healthy 55-year-old woman would pay an average of $1,500 annually for the same policy.¹⁰ This is because women tend to live longer and will need more long-term care services.⁶

For your level of coverage, you can choose to pay higher premiums to cover more long-term care services, or to increase daily limits for how much your policy pays for your care.⁶

Keep in mind that an insurance company cannot promise that your premiums won’t go up and it must inform you when they do.¹¹ When comparing policies, make sure to look for information about premiums in the outline of coverage.¹¹ If you see the term “level premium” in a potential policy, it does not mean your premium will stay the same.¹¹ 

There are many options for where you can get long-term care insurance from, which include:¹²

• Insurance specialist. An insurance specialist can be an insurance agent or insurance broker who helps explain different policies. An insurance agent works on behalf of an insurance company to find you the right plan, while an insurance broker works on your behalf to find the best plan. Both are licensed by your state’s department of insurance, which regulates the companies that offer long-term care insurance. The National Association of Insurance Commissioners offers a search tool to find your state’s department of insurance and ask about your options.
• Employer. Your job may offer long-term care insurance as a benefit. Instead of an individual rate, your company will offer coverage at a group rate to cover you and your co-workers, which may cost you less money. Contact your job’s benefits administrator to see if long-term insurance is a part of your benefits package.
• Government. The federal government also offers the Federal Long Term Care Insurance Program for federal government employees. Learn more about the program and when to sign up for the next enrollment period. 
• Long-term care insurance partnership programs. These plans are partnerships between your state’s Medicaid program and a private insurance company’s long-term care insurance policy. They offer inflation protection, which means you may receive benefits that exceed the policy coverage you bought. After you reach the maximum benefits on your policy, you may be eligible for Medicaid to continue paying for long-term care under certain state rules. You may also be able to keep more of your assets—the value of property or financial accounts you own—which you typically must spend down on long-term care expenses before you can qualify for long-term care Medicaid coverage. Not every state has partnership programs for long-term care insurance. Find your state’s department of insurance to check availability.
• Life insurance. Some life insurance policies also include long-term care insurance plans. These plans are called “combination” or “hybrid” policies. Hybrid policies typically include whole life insurance plans, rather than term life insurance which covers you temporarily. Instead of paying a monthly premium, you may either pay a higher premium a few times a year, or a large one-time premium.¹³ The average cost of a one-time premium is over $73,000.¹⁰ Paying only a few times a year or all at once means you are less likely to see your premiums increase with a standalone long-term care insurance plan.¹³ If you die before using your benefits, the money you paid in premiums would go to your family.¹³

Each state has its own laws and regulations for all types of insurance. State insurance departments enforce these laws, as well as give the public information about insurance. With that in mind, it is important to compare any and all insurance plans you’re considering to find the most affordable option to cover all of your long-term care health needs.

Sources

1. LongTermCare.gov. What Long-term Care Insurance Covers. Found on the Internet at https://acl.gov/ltc/costs-and-who-pays/what-is-long-term-care-insurance/what-long-term-care-insurance-covers

2. Medicare.gov. Skilled nursing facility (SNF) care. Found on the Internet at https://www.medicare.gov/coverage/skilled-nursing-facility-snf-care

3. National Council on Aging. Does Long-Term Care Insurance Cover Nursing Homes? A Comprehensive Guide. Found on the Internet at https://www.ncoa.org/article/does-long-term-care-insurance-cover-nursing-homes-a-comprehensive-guide

4. LongTermCare.gov. Receiving Long-Term Care Insurance Benefits. Found on the Internet at https://acl.gov/ltc/costs-and-who-pays/what-is-long-term-care-insurance/receiving-long-term-care-insurance-benefits

5. National Institute on Aging. Aging in Place: Growing Older at Home. Found on the Internet at https://www.nia.nih.gov/health/aging-place/aging-place-growing-older-home

6. NerdWallet. Long-Term Care Insurance Explained. July 7, 2023. Found on the Internet at https://www.nerdwallet.com/article/insurance/long-term-care-insurance

7. LongTermCare.gov. How Much Care Will You Need? Found on the Internet at https://acl.gov/ltc/basic-needs/how-much-care-will-you-need

8. National Council on Aging. Does Long-Term Care Insurance Cover Memory Care? A Comprehensive Guide. Found on the Internet at https://www.ncoa.org/article/does-long-term-care-insurance-cover-memory-care-a-comprehensive-guide

9. LongTermCare.gov. What is Long-term Care Insurance? Found on the Internet at https://acl.gov/ltc/costs-and-who-pays/what-is-long-term-care-insurance

10. American Association for Long-Term Care Insurance. Long-Term Care Insurance Facts - Prices - Data - Statistics - 2023 Reports. Found on the Internet at https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2023.php

11. National Association of Insurance Commissioners. A Shopper’s Guide to Long-Term Care Insurance. Found on the Internet at https://content.naic.org/sites/default/files/publication-ltc-lp-shoppers-guide-long-term.pdf

12. LongTermCare.gov. Where to Look for Long-term Care Insurance. Found on the Internet at https://acl.gov/ltc/costs-and-who-pays/what-is-long-term-care-insurance/where-to-look-for-long-term-care-insurance

13. NerdWallet. Ordering the Combo: Life Insurance with Long-Term Care Benefits. Found on the Internet at https://www.nerdwallet.com/article/insurance/combine-life-insurance-long-term-care