Your guide to long-term care insurance + Calculate your potential costs

Find out how much yours or a loved one's care might cost you

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Susan Meyer

Senior Editorial Manager

Credentials
  • Licensed Insurance Agent — Property and Casualty

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

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Ross Martin

Insurance Writer

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  • 4+ years in the Insurance Industry

Ross joined The Zebra as a writer and researcher in 2019. He specializes in writing insurance content to help shoppers make informed decisions.

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Do you need long-term care insurance?

When you’re young and healthy, it can be easy to set aside thoughts of what will happen when you’re older. However, the cost of long-term care is a necessary factor for many Americans, as one study[1] found that 70% of Americans who reach the age of 65 will need some type of long-term care services in their lifetime[2].

And these costs are on the rise. According to a report by Genworth, the median cost of care in the U.S. was anywhere from nearly $60,000 to over $100,000[3].

Want to estimate the potential costs for yourself? Try out our long-term care estimate calculator. You can select the services you might need and the number of years you might need them to see your potential costs. You can even factor in how many years in the future you might need to care to see how the cost per year will likely change. Choose the state you live in or plan to live in when you retire or look at national averages. 

What is long-term care insurance?

There are a number of types of long-term care insurance, but essentially, it’s a type of policy offered by an insurance company that is intended to cover long-term care costs such as personal and custodial care in your home or at an adult care facility.

It differs from life insurance as it provides benefits during your lifetime. That said, you can use life insurance or annuities to help pay for care costs in one of two ways. It can often be added as a long-term care rider to a life insurance policy. Or it can be added as an accelerated death benefit which means you can use your life insurance death benefit to cover long-term care expenses while you’re still alive if you have certain qualifying health conditions.

Long-term care insurance also differs from health insurance or Medicare which will likely only cover your skilled care needs directly after a hospitalization, injury or illness.

With longer life expectancies and rising healthcare costs, preparing for potential long-term care needs becomes paramount. Long-term care insurance is an invaluable tool that offers financial protection and peace of mind, ensuring that individuals receive the necessary care and support without burdening their loved ones.

life insurance
Life insurance differs from long-term care insurance

Having a life insurance policy is a good idea for long-term planning. Learn more about life insurance or get a quote from our trusted partners

What does long-term care insurance cover?

Long-term care insurance policies are customizable and can be tailored to individual needs and preferences. While coverage may vary between policies and providers, typical LTC insurance plans include the following:

  1. Home healthcare: This covers human services provided in the comfort of your own home, such as skilled nursing care, personal care assistance and therapy services.

  2. Assisted living facilities: LTC insurance may cover the cost of residing in an assisted living facility, which offers support with daily activities while promoting independence.

  3. Nursing homes: Coverage often extends to nursing home care, providing comprehensive medical and personal assistance for individuals with more complex needs.

  4. Adult day care: This option covers daily care services provided in a group setting, offering social interaction and supervision for those who need help for a period of time but do not require 24/7 care.

  5. Respite care: LTC insurance may cover temporary care services, giving primary caregivers a much-needed break while ensuring continuity of care.

  6. Hospice care: Many policies include coverage for hospice care, which provides comfort and support to individuals with terminal illnesses.

It's important to carefully review and compare different LTC insurance policies to find one that best aligns with your needs and budget. Factors to consider include the coverage amount, duration of coverage, elimination period (waiting period before benefits start) and any optional benefits or riders that can be added to enhance the policy's scope.

What factors into the cost of long-term care coverage?

Your eligibility and the cost of your long-term care policy will depend on a few factors including:

  • Your age when you buy the policy.

  • Your health when you buy the policy. If you are in poor health, have a preexisting condition or are already requiring care for the activities of daily living, you may not qualify.

  • The maximum benefit amount the policy will pay.

  • Other long-term care benefits such as inflation protection (increasing the benefit amount based on rising costs)

It’s also important to know the limitations of your policy. Some insurance programs with long-term care plans will only pay for care for policyholders for a specified number of years. Others will pay your long-term care costs for as long as you live.

Why do you need long-term care insurance?

Here are four reasons you might want to consider investing in long-term care insurance.

  1. Addresses rising costs

One of the primary reasons to invest in long-term care insurance is the growing cost of care services. LTC expenses are often outside of the scope of other private insurance policies and can quickly deplete personal savings and assets, putting immense financial strain on families. Insurance helps offset these expenses and ensures you receive the level of care you require without compromising your financial security.

  1. Maintains independence and choice

By planning ahead and securing LTC insurance, individuals gain the flexibility to choose where and how they receive care. Whether at home, in an assisted living facility or at a nursing home, having the means to pay for quality care empowers seniors to maintain their independence and retain control over their care decisions. This can be particularly important for those who later suffer from Alzheimer’s disease or other cognitive impairment that can take these decisions out of their hands later.

  1. Eases the burdern on loved ones

Long-term care needs can be emotionally and financially draining for family members who often become caregivers. Having LTC insurance relieves your loved ones of this responsibility, allowing them to focus on emotional support rather than becoming full-time caregivers. This can preserve family relationships and prevent conflicts that may arise when deciding on caregiving responsibilities.

  1. Avoids spending down to access Medicaid

Without LTC insurance, many individuals may have to deplete their savings to qualify for Medicaid coverage, a government program designed to provide assistance for low-income individuals. With LTC insurance, you can protect your hard-earned assets and avoid the necessity of spending down to qualify for Medicaid. It’s worth consulting a financial advisor to see how this might affect you.

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Conclusion

Long-term care insurance is a vital tool for safeguarding your future and preserving your financial stability in the face of potential long-term care needs. By investing in LTC insurance, individuals can maintain control over their care decisions, avoid burdening loved ones and protect their assets.

As the cost of care continues to rise, planning ahead with long-term care insurance is a proactive step towards ensuring a comfortable and secure future during the golden years of life.

Sources
  1. Understanding Long-Term Care Insurance. AARP

  2. How Much Care Will You Need? Administration for Community Living

  3. Cost of Care Trends & Insights. Genworth