Long-term care insurance (LTCI) covers the cost of care you may need if you can no longer perform basic daily activities on your own — bathing, dressing, eating, transferring from a bed to a chair — due to aging, illness, or disability. This kind of care — in a nursing home, assisted living facility, or at home — is not covered by standard health insurance or Medicare for most services. It is also expensive: the national median cost of a private nursing home room exceeds $100,000 per year. Long-term care insurance exists to protect your assets from being wiped out by those costs.
What Long-Term Care Insurance Covers
Policies typically cover care in multiple settings:
- Nursing home care (skilled nursing facilities)
- Assisted living facilities
- Home health care (a home health aide or skilled nurse coming to your residence)
- Adult day care centers
- Memory care facilities (specialized Alzheimer’s and dementia care)
Benefits typically trigger when you are unable to perform two or more Activities of Daily Living (ADLs) or when you have a severe cognitive impairment such as Alzheimer’s disease.
How Long-Term Care Insurance Works
You choose a daily or monthly benefit amount (how much the policy pays per day/month for care), a benefit period (how long benefits last — typically 2, 3, or 5 years, or unlimited), and an elimination period (a waiting period of 30, 60, or 90 days before benefits begin — like a deductible in time). You also choose whether to include inflation protection, which increases your benefit amount over time to keep pace with rising care costs.
How Much Does Long-Term Care Cost?
The 2025 Genworth Cost of Care Survey provides these national medians:
- Home health aide: ~$30 per hour (~$62,000/year for 8 hours/day)
- Assisted living facility: ~$5,800/month (~$70,000/year)
- Private nursing home room: ~$9,700/month (~$116,000/year)
Costs vary significantly by state. California, New York, and Massachusetts run considerably higher; rural Midwest states tend to be lower.
What Does Long-Term Care Insurance Cost?
Premiums vary based on age at purchase, health status, benefit amount, benefit period, and inflation protection. General ranges:
- Age 55: $1,700–$3,400/year for a single person; $2,800–$5,500/year for a couple (both covered)
- Age 65: $3,200–$6,800/year for a single person; significantly higher, and some applicants are declined due to health
Buying earlier means lower premiums, but you pay them for more years. Buying later means higher premiums and higher risk of being declined. The sweet spot for most people is age 55–60, when premiums are still reasonable and most people can still qualify medically.
Alternatives to Traditional Long-Term Care Insurance
Hybrid Life/LTC Policies
A life insurance policy with a long-term care rider. If you need long-term care, the policy pays benefits. If you die without needing care, your heirs receive a death benefit. Premiums are typically higher, but you are not “wasting” money if you never need care — a complaint many people have about traditional LTCI.
Annuities With LTC Riders
Similar concept: an annuity that doubles or triples its payout if used for long-term care expenses.
Self-Insuring
High-net-worth individuals (typically $3 million or more in liquid assets) can often self-insure by earmarking investment assets to cover potential care costs. This works if you have sufficient assets and can accept the risk of depleting them.
Medicaid Planning
Medicaid covers long-term care for people with very low income and assets. It is not a planning strategy to pursue intentionally — qualifying typically requires spending down most of your savings first. Some engage in Medicaid planning (transferring assets years before needing care) with legal guidance, but this has strict rules and look-back periods.
Who Needs Long-Term Care Insurance?
Consider LTCI if you have significant assets you want to protect and pass to heirs, cannot easily self-insure, and have family health history suggesting a higher likelihood of needing extended care (Alzheimer’s, Parkinson’s, stroke). Those with very few assets may qualify for Medicaid rather than needing private insurance. Those with $3 million or more may be able to self-insure comfortably.
Bottom Line
Long-term care is a financial risk most people ignore until it is too late to buy affordable coverage. Evaluate LTCI at age 55–60 when premiums are most favorable and qualifying medically is most likely. Compare traditional policies against hybrid life/LTC products, and work with an independent insurance broker who can compare offerings from multiple carriers.