Trying to figure out how long you’ll live and how much money you’ll need in retirement is a hard calculation to make for most people. That’s why many adults consider purchasing long-term care insurance.
Long-term care insurance isn’t the same as health insurance (which covers hospital stays, annual check-ups, medical procedures and prescription medication). This insurance policy covers costs associated with nursing home care, in-home care, assisted living or an adult day care facility. Someone who needs long-term care may need help with:
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Cleaning
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Cooking
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Eating
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Getting dressed
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Managing medical equipment
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Showering or bathing
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Mobility (like standing up, sitting down or walking)
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Taking medications
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Using the restroom
While long-term care can be vital to healthy living, it can be very expensive. According to SeniorLiving.org, the median cost of a private nursing home room is more than $10,300 per month in 2025. While assisted living and home health care are generally less expensive, the bills can still add up quickly.
What is long-term care insurance?
Long-term care insurance pays for some or all your long-term care costs. It’s additional insurance on top of your standard health insurance plan.
While health insurance pays for your medical care, long-term care insurance will pay for home health aides, nursing home stays or other forms of long-term care. Covered services vary by policy, so it’s a good idea to discuss your options with your insurance professional.
Should you buy long-term care insurance?
Statistically speaking, most people will need long-term care for some portion of their life. It may be for just a few weeks after surgery or injury, or for many years in old age.
People in poor health or those who previously received long-term care services may not qualify for this insurance. Additionally, if you rely heavily on Social Security and/or supplemental income, the insurance premiums may be overly burdensome to your budget.
However, if you have plenty of retirement savings in addition to your Social Security, then long-term care insurance can help protect your assets in the event you need long-term care. If the premium fits easily into your budget, then you might consider purchasing long-term care insurance.
When should I buy long-term care insurance?
Unfortunately, if you already have a medical condition that may result in your needing long-term care, such as cancer, diabetes or heart disease, you may be denied long-term care insurance coverage. If you’re interested in long-term care insurance, you should consider purchasing it before you are older and more at risk for these conditions.
You should also consider purchasing insurance when you are younger because your premiums will be lower.
How much does long-term care insurance cost?
Long-term care insurance premiums depend on a number of factors, including:
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How long you will receive long-term care benefits
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How long you will wait before the benefits are paid (elimination period)
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Location
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The maximum benefit the policy will pay per day
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Types of long-term care services that are covered
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Your age when you purchase the policy
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Your health
A trusted insurance professional can help you create a policy that is right for you and your budget.
What does long-term care insurance cover?
Services covered by long-term care insurance vary greatly. Typically, they cover stays in a nursing home or assisted living facility. They may or may not cover services such as physical therapy, home health care or medical equipment.
Some policies don’t cover certain conditions such as:
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Addiction
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Attempted suicide
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Injuries from war
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Mental health disorders
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Treatment in a government facility
Policies can also differ on when benefits are triggered, meaning when the insurance company will start paying for your care. Some require certification from a physician, a certain length of stay or confirmation that the policyholder can’t perform certain activities of daily living like eating or showering.
When choosing your policy, make sure it covers the type of care you want and need. You can compare services, prices and other coverage information between different plans with the help of your insurance professional.
What types of long-term care policies are available?
Most people purchase individual long-term care insurance policies. This means they buy them on their own, not through an employer or as part of a group.
However, more and more employers are beginning to offer long-term care insurance as a benefit. These group policies may have lower premiums and more coverage options than individual plans.
There are different types of policies:
Reimbursement policies — You are reimbursed for what you spend on covered care expenses, up to a daily or monthly cap.
Per diem policies, including indemnity and disability or cash policies — These typically pay a set dollar amount per day, regardless of your actual expenses.
Life insurance policies combined with a long-term care rider — These allow you to pull some or all of the money from your death benefit to use on long-term care expenses.
You can also purchase joint policies for you and your partner or spouse. While these policies have a lower premium than two separate policies, you’ll also have to share benefits. That may mean that one spouse ends up using all the benefits, leaving the other without coverage.
A trusted insurance adviser can help you understand all aspects of long-term care insurance and help you pick a plan with the right amount of coverage for you. With the right level of coverage and the right premium, long-term care insurance can be a worthwhile investment to protect your assets.
If you would like to know more, feel free to reach out to Catrena Charles.
