Long Term Care Insurance

Costs, Benefits, and Coverage

With 70% of seniors needing long-term care insurance (LTCI) at some point, planning ahead is crucial. Medicare doesn’t cover most nursing home or in-home care costs, leaving families with massive out-of-pocket expenses.

Long-term care insurance (LTCI) helps cover these costs—but is it right for you?

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What Does Long-Term Care Insurance Cover?

LTCI helps pay for services when you can’t perform daily activities (eating, bathing, dressing) due to:

  • Aging-related decline
  • Chronic illnesses (Alzheimer’s, Parkinson’s)
  • Severe disabilities

Covered Services

  • Nursing home care 
  • Assisted living facilities 
  • In-home care  (aides, therapists) 
  • Adult day care 
  • Home modifications  (ramps, grab bars)

Not Covered

Medical treatments (handled by Medicare/health insurance)

Who Should Buy Long-Term Care Insurance?

Best Candidates for LTCI

  • Ages 50–65 (before premiums skyrocket)
  • Savings between 250K–250K–2M (too rich for Medicaid, too poor to self-insure)
  • Family history of dementia/chronic illness

Who Should Skip It?

  • Low-income individuals  (Medicaid covers LTC if you qualify) 
  • Those with poor health  (may be denied or face high premiums)

2025 Long-Term Care Insurance Costs

Average Annual Premiums (2025 Estimates)

  • Age at Purchase: 55 years old → Annual Cost: $1,500-3,000
  • Age at Purchase: 60 years old → Annual Cost: $2,000-3,800
  • Age at Purchase: 65 years old → Annual Cost: $2,800-5,500

Medicare Part B Costs

  • Standard Premium: $174.70/month (may be higher based on income)
  • Annual Deductible: $240

Key Cost Factors

  • Age (cheaper if bought younger)
  • Health (pre-existing conditions raise rates)
  • Coverage amount ($150/day vs. $300/day)
  • Benefit period (2 years vs. lifetime)
  • Inflation protection (adds ~30% to cost)

Example:  A 65-year-old couple might pay $6,000–9,000/year combined for a solid policy.

How to Choose the Best Policy

Step 1: Decide on Coverage

Daily benefit: 150–150–350/day (average nursing home cost: $300+/day) Benefit period: 2–5 years (typical claim length) Inflation protection: 3–5% compound (critical for younger buyers)

Step 2: Compare Providers

  • Check AM Best ratings (A+ or better)
  • Look for rate increase history

Step 3: Apply Early

  • Approval gets harder after age 70

Alternatives to Long-Term Care Insurance

  • Hybrid Life Insurance + LTC Riders (e.g., Nationwide)
  • Annuities with LTC Benefits
  • Medicaid Planning (for low-asset seniors)
  • Self-Insuring (if you have $500K+ in savings)

Common Mistakes to Avoid

  • Waiting until 70+ to apply (denial risk)
  • Skipping inflation protection (benefits erode over time)
  • Assuming Medicare covers LTC (it doesn’t!)
  • Not reviewing policy details (some exclude Alzheimer’s)