Your Complete Guide to Paying for Long-term care

Long-term care insurance: Understanding costs and key factors

Long-term care insurance helps pay for extended medical care if you develop a chronic illness, disability, or need help with daily activities. This guide covers what it costs, why prices vary, and what to consider before buying a policy.

What long-term care insurance covers

As people live longer, the risk of needing extended care increases. Long-term care insurance pays for services like home health aides, assisted living facilities, and nursing homes. Without it, these costs can deplete savings quickly.

What long-term care insurance costs

Premiums vary based on your age, health, and the coverage you choose. In 2022, a 55-year-old male paid about $950 per year (roughly $79 monthly) for a policy with $165,000 in lifetime benefits. Younger enrollees generally pay less.

What affects your premium

Several factors shape what you'll pay:

• Age at enrollment: Younger applicants qualify for lower premiums since they're less likely to need care soon.
• Health status: Your current health and medical history affect your rate. Pre-existing conditions can raise premiums.

• Coverage amount and length: More benefits and longer coverage periods cost more.
• Inflation protection: Adding inflation protection keeps your benefits from losing value over time, but raises your premium.
• Elimination period: This is the waiting period before benefits start. A shorter wait means a higher premium.
• Gender: Women have historically paid more because they tend to live longer and use care services more often. Some insurers are phasing out gender-based pricing.
• Location: Healthcare costs and cost of living vary by state and region, affecting premiums.
• Insurance company and policy type: Rates differ between insurers. Comparing options can save you money.

Making the decision

Long-term care insurance is worth considering as part of your overall financial plan. It can protect your savings from being wiped out by care costs in your later years. The key is to research your options early, when you're younger and healthier—and premiums are lower.

Understanding what you'll pay and why helps you choose a policy that fits your budget and needs.