June 23, 2024
Long Term Care Insurance Cost

Traditional long-term care insurance costs by age

The following tables include stand-alone long-term care insurance policy costs by age based on data from the AALTCI. The costs are based on policy applicants with “select” health. The AALTCI notes that individuals with “preferred” health — i.e., people with few or no medical conditions — may get discounts for being in good health.

Linked benefit long-term care insurance costs

The AALTCI provides sample pricing data for linked benefit policies, as shown below. These figures are from one insurance company and should only be used as examples. Keep in mind that policy details can vary significantly by company. You can find more examples on the AALTCI’s Linked Benefit Price Index page.

Factors that influence LTC insurance costs

Your long-term care insurance premiums can vary based on the following factors:

 

Your age and health: Rates are lower when you are younger and healthier. When you apply for a policy, the company will require you to undergo a health screening, which can involve reviewing your medical records or an in-person health assessment. Some health conditions may make you ineligible for coverage — for example, you may be denied a policy if you have Alzheimer’s disease when you apply.

Your gender: Women typically pay higher premiums than men because they tend to live longer and are more likely to require long-term care.

Benefit period: Your policy’s benefit period is how long it will help pay for your long-term care. Companies typically offer policies that cover one to five years of benefits, and some offer lifetime benefits. The longer the benefit period, the more expensive the policy will be.

Daily benefit: The daily benefit amount is how much your policy covers each day. Higher limits cost more.

Elimination period: The elimination period is the time you must wait from the moment you’re eligible for coverage to when your policy starts paying. You’ll have to pay for your care out of pocket during this waiting period. Elimination period options typically include 0, 30, 60, 90,180 or 365 days, with the longer periods costing less.

Inflation protection: The cost of long-term care increases over time. Adding inflation protection to your policy will help your benefit grow (typically by 1% to 5% annually) to keep up with inflation. Understandably, adding this optional benefit will increase the overall cost of your policy.

Number of people insured: Married couples can save money on their policies by applying for coverage together. Companies typically offer a higher discount percentage if both individuals qualify for coverage, but they can still get a premium reduction if just one is approved.

Your insurance company: Rates can vary significantly by insurance company. It’s especially important to shop around by getting quotes from multiple companies before making a decision.

Costs of long-term care services without insurance

While long-term care insurance may appear expensive, Howard Sharfman, senior managing director at NFP Insurance Solutions, says you must consider the cost of care.

 

Long-term care expenses range from a median of $1,690 per month for adult day care to $9,034 per month for a private room in a nursing home, according to Genworth’s Cost of Care survey. What’s more, the cost of living increases each year, and Genworth predicts that a private nursing home room will cost $11,787 per month by 2030.

Long-term care coverage is expensive when we only look at the premium. However, the value is exceptional. First, the premium is not expensive when compared to the financial cost of long-term care and home health care,” says Sharfman.

He also notes that having a policy that allows you to get appropriate long-term care can help alleviate the strain on your family members, who would otherwise need to be your caregivers.

The table below includes the monthly and annual median costs for various types of long-term care if you don’t have insurance.

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