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Long Term Care Health Insurance Guide

It’s easy to take for granted the ability to perform daily tasks like dressing, feeding and bathing yourself. But if you live long enough or become incapacitated by illness, you may reach a point when you can no longer do these things on your own. And paying someone to help you with these tasks can get quite expensive, and quickly.

Purchasing long term care insurance earlier in life can offer a solution to help you avoid having to pay for these costs out of pocket. Since long term care costs are usually not covered by health insurance, buying a long term care insurance policy can be an important investment to protect you as you age. According to the U.S. Department of Health and Human Services, 70% of people age 65 and older will need some type of long-term care in their lives.

This guide is a resource of information to help you learn about long term care insurance options and plan for the future.

What is long term care insurance?

Long term care insurance, by definition, is coverage that pays for help for someone who is unable to care for themselves. Disabled adults and individuals living with a chronic illness or debilitating injury are examples of people who would require this care.

What Does Long Term Care Insurance Cover?

Does long term care insurance cover assisted living? Will it pay for in home care or a health aide? In most cases, the answer is yes.

Long-term care policies usually offer comprehensive coverage, so you can apply the benefits of long term care insurance to various types of care. Long term care policies may cover the following:

  • Assisted living facilities: This may include resident care or alternative care.
  • Nursing home care
  • Adult day care
  • Independent living
  • In-home care: Policies may cover help from a home health aide who can assist with everyday home care tasks, as well as nursing care, physical therapy and medical equipment.
  • Hospice: Long term care insurance coverage may pay for short-term hospice care for terminally ill individuals. However most hospice care does not qualify as long-term care and may be covered by Medicare.

It’s important to note that your long term care insurance policy may not cover pre-existing conditions during its exclusion period, which can last for several months after you buy your policy.

Long term care insurance also does not cover medical care costs, although Medicare will cover these if you qualify.

How Does Long Term Care Insurance Work?

As with any other insurance policy, you start by filling out an application. You’ll also need to answer some interview questions about your medical history, and you may need to supply your medical records so the insurer can determine your eligibility. There are no age requirements for buying long term care insurance.

With most policies, these are the reasons you would qualify for long term care insurance below if you meet the criteria for benefits

if you are unable to do at least two of six “activities of daily living,” or ADLs. These include:

  • bathing
  • dressing
  • eating
  • getting in or out of a bed or chair
  • getting on or off the toilet
  • bladder and bowel control

When to Buy Long Term Care Insurance

So when should you buy long term care insurance? The consensus among financial advisers is that the ideal age for when to buy coverage is between 60 and 65. According to the American Association for Long-Term Care Insurance, January 2019, 76.4% of long-term care insurance buyers were between the ages of 50 and 69.

While it’s true there is no age limit for purchasing long term care insurance, costs vary by age. Young adults will pay much lower rates than seniors. But you need to strike a balance between cost and risk.

Long term care insurance for a 30 or 40 year old may be much cheaper, but you could be paying premiums for 20 or 30 years before you actually file a claim. Yet if you wait too long, your risk goes up dramatically. According to the American Association for Long-Term Care, January 2019, people over 70 file over 95 percent of long-term care insurance claims. And 7 in 10 claims were filed by people over 80 years old. You may also be interested in learning about the benefits of buying long term care insurance for women.

How Much Does Long Term Care Insurance Cost?

So how much does long-term care insurance cost?

The American Association for Long Term Care Insurance offers a breakdown of long term care insurance rates for 2021 by age. For 60-year-old individuals purchasing a policy with a level benefit of $165,000, here is the average cost of long term care insurance annually:

• Single male: $1,175

• Single female: $1,900

• Couple: $2,600 combined

You’ll also want to make the price of long term care insurance can fit into your budget, and factor in how much long term care insurance is per month under different scenarios. For example, a policy with level benefits for a 60 year old couple will cost $216 per month combined. But if that same couple wants a policy with benefits that grow at 5% yearly, they would be looking at a long term health care insurance cost of $729 a month, according to the American Association for Long Term Care insurance.

For a more precise estimate of exactly what does long term care insurance cost, a quick online search can help you obtain quotes for long term care insurance.

Once you know how much long term care insurance is on average, you’ll want to get an idea of how much different types of care cost in your state, as well as how those costs might change from year to year, so you can make sure you’re buying enough coverage. Genworth offers a cost of care survey tool to help you calculate costs across the United States based on ZIP code and type of care. You can also look at costs based on the frequency of care — down to hourly, monthly or yearly — as well as estimates adjusted for inflation in later years.

For an idea of how much long term care insurance you might need, here is a snapshot of the annual median cost of a private room in a nursing home in 2020 in a handful of states, in order of most to least expensive:

• New York state: $155,125

• California: $137,240

• Oregon: $134,138

• Washington state: $131,400, assisted living facility

• Maryland: $127,750

• Florida: $117,804

• Virginia: $105,850

• Ohio: $98,550

• Arizona: $98,550

• Texas: $76,650

• Kentucky: $95,265

• Georgia: $86,082

• Kansas: $84,315

Types of Long Term Health Care Insurance

Life Insurance with Long Term Care

The high costs of long-term care insurance can deter people from buying it, and some people don’t like the idea of paying for coverage they might not ever use. One of the alternatives to long term care insurance is a combination policy for life insurance with long term care rider.

A hybrid long term care insurance policy provides long-term care if you need it; and if you don’t need it for care, the policy will pay out a death benefit. Individuals who want a guaranteed benefit may consider this to be their best long term care insurance option.

With this type of long term care insurance, you pay for coverage either in a lump-sum premium or a limited number of large annual premiums.

With some combination policies, you won’t be able to obtain a combination life and long term care insurance policy without supplying your health records and taking a medical exam.

Hybrid long term care insurance has its pros and cons:


• You will get a benefit from your policy either way.

• If you pay for this coverage in a lump-sum, you won’t have to deal with the premium hikes that often accompany traditional long-term care insurance policies. And paying with limited number of payments could guarantee that your premiums stay the same.

• Some hybrid policies offer a money-back guarantee if you decide you don’t want the policy anymore.


• Combination policies are expensive. A single-premium hybrid policy costs $75,000 on average, according to the American Association for Long-Term Care Insurance.

• If you don’t want permanent life insurance, or you only need life insurance, you will be paying for more coverage than you need with a hybrid policy.

Federal Long Term Care Insurance Program

Among the types of long term care insurance options available, the Federal Long Term Care Insurance Program provides coverage to most federal government and U.S. Postal Service employees and annuitants. Active military and veterans of the uniformed services and their qualified relatives are also eligible to apply.

Pros & Cons of Long Term Care Insurance

Maybe you’re wondering: Is it worth it to buy long term care insurance? To inform your decision, let’s look at some of the pros and cons of long term care insurance:

Pros of Long Term Care Insurance

• Peace of mind. Long term care insurance is a good idea if you don’t want to worry about who will take care of you — and how to pay for it — if you’re unable to take care of yourself.

• You can buy as much of as little as you need. You can customize your policy to your needs and budget, whether that means purchasing a policy with a level benefit or paying more for long term care insurance with inflation protection options.

• It’s a good investment if you’re pretty sure you’ll need it. If your family medical history points to chronic illnesses that run in your family, there’s a pretty good chance that long term care insurance is worth it.

Long term care insurance is tax deductible. Long-term care insurance offers tax free benefits. That means you can file your long term care insurance premiums as a tax deduction.

Cons of Long Term Care Insurance

• It’s hard to pinpoint your needs. You may be wondering: “How much long term care insurance do I need? That’s a good question. No one has a crystal ball to figure out whether you’ll need care, and for how long.

• Pricing is uncertain: Premiums are not guaranteed and can rise dramatically from year to year,

• You may never need it. Some people may ask: Why should I buy long term care insurance if it’s just going to be a waste of money? Although 7 out of 10 seniors will need long-term care at some point in their lives, that still leaves 3 in 10 who won’t.

• There’s no guarantee as to who qualifies for long term care insurance. Insurers usually require you to pass a physical before granting coverage, and as many as 1 in 5 applicants are denied coverage. Then even if you qualify, your claim could be denied. Reasons for long term care insurance rejection may include conditions that are exclusions, conflicting opinions between your doctor and your insurer, missed premium payments and care facilities that are ineligible under your policy.

• You might not get your benefits fast enough: Every insurance policy has an elimination period, the length of time between the injury and the release of benefits, and it’s possible that period could be longer than the amount of time in which you need care.

Who needs long term care insurance?

So now the big question: Do I need long term care insurance?

While there’s no way to predict the future, the odds point to yes.

Even if you are over 65 and have Medicare or private health insurance, Medicare will not pay for custodial care, and private insurance usually doesn’t cover long-term care.

According to the advice of the Insurance Information Institute, you should consider getting long term care insurance unless you have so little money that you qualify for Medicaid — which will pay the long-term expenses of low-income individuals — or so much money that you can pay your bills out of pocket. Most people fall somewhere in the middle.

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