What Is Long-Term Care Insurance and Is It Worth It?

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Long-term care insurance can help by covering some of the medical and support services that people with degenerative conditions, cognitive disorders or other long-term illnesses will need. 

While long-term care insurance can cover everything from assisted living services at home, adult day service centers, nursing homes, memory care facilities, respite and hospice care, or assisted living facilities, there are still gaps in what it may cover.

What Does Long-Term Care Insurance Cover?

Long-term care insurance covers the cost of a variety of services provided over an extended period of time.

Several types of policies are available, but the traditional one, called a standalone policy, typically provides comprehensive coverage, including:

• Personal care, such as assistance with bathing, dressing and toileting as well as incontinence care
• Skilled nursing
• Occupational therapy
• Speech therapy
• Physical therapy
• Rehabilitation

Unskilled services such as meal prep and housekeeping might be covered if you’re also receiving personal care services.

How Long Does Long-Term Insurance Coverage Last?

Coverage begins when you become unable to perform two out of six activities of daily living, or ADLs, independently or develop a cognitive impairment such as Alzheimer’s, as the National Council on Aging explains.

Before benefits begin, you’ll undergo an assessment to determine your needs. The insurance company will then create a plan of care listing the services you’re eligible to receive.

You can receive the services at home or in a facility such as:

• Adult daycare
• Hospice
• Respite care
• Assisted living
• Memory care
• Nursing home

Specific coverages and coverage limits vary by policy. For example, you might have a waiting period before coverage begins, and you might be subject to daily coverage limits and limits on how long you can receive benefits.

When To Buy Long-Term Care Insurance

John Crist, the founder of Prestizia Insurance, believes the best time to buy insurance is usually when you’re in your 50s or early 60s, if you anticipate a future need for long-term care. He has helped a lot of people determine the best insurance plan to meet their needs, including long-term care insurance.

Why that age? Premiums are more affordable when you’re younger. As the U.S. government’s Administration for Community Living explains on its website, long-term care insurance is usually medically underwritten, meaning that the insurance company will review your medical records to determine how likely you are to use your policy benefits.

The older you are, the more likely you are to develop health issues, which increases the chance that you’ll need to use the coverage. That increases the insurance company’s risk, so it charges you higher premiums. If the risk is too high, it might decline to issue you a policy.

Another factor to consider is whether your family’s medical history makes you more vulnerable to developing a disease that might require long-term care. Parkinson’s disease, Alzheimer’s disease, diabetes and several types of cancer are examples of chronic conditions that have or appear to have a genetic component.

And, of course, financial considerations impact when and if you can buy insurance.

Long-Term Care Insurance Costs and Premiums

The 2025 American Association for Long-Term Care Insurance Price Index for a $165,000 policy is $1,200 per year for a 60-year-old single male, or $1,900 per year for a 60-year-old single female. The combined benefit for a 60-year-old couple is $2,600 per year.

Insurance companies consider many factors when they determine premiums:

• Type of policy: Standalone policies are usually cheaper than hybrid long-term care and life insurance policies with death benefits, according to the NCOA.
• Age at purchase
• Health status
• Amount of coverage: Higher daily benefit limits and longer coverage periods — the length of time you can receive benefits — cost more.
• Elimination period: This is the waiting period before the insurance company starts paying for your care. It typically lasts 30 to 90 days, with shorter periods resulting in higher premiums.
• Optional coverages: Optional coverages, offered as riders, increase your premiums. For example, an inflation protection rider increases benefits to keep up with inflation.

Coverage is pricey, but considering that nursing home care is expected to reach $132,928 per year for a semi-private room by 2030, according to Statista, it could be a good investment. If you have a health savings account or a medical savings account, or both, you can use those funds to pay your long-term care insurance premiums.

What Disqualifies You From Long-Term Care Insurance?

Long-term care insurance coverage isn’t guaranteed. You’ll have to meet the insurer’s eligibility criteria in order to purchase a policy. Reasons you might be disqualified include:

• Age: While there’s no hard age cutoff, the older you are, the more likely you are to be declined because of likelihood that you’ll have disqualifying issues.
• Health: Pre-existing illnesses and disabilities are one of the biggest reasons people are declined, according to the NCOA. Conditions that can disqualify you from coverage include Alzheimer’s and other forms of dementia, advanced diabetes, severe arthritis, obesity, cardiovascular disease, Parkinson’s disease, cancer, kidney failure, spinal cord injury and history of stroke.
• Daily living activities: You must need help with at least two of six ADLs to qualify for benefits once you’re insured. But if you already need assistance when you apply, you can be declined coverage.
• Cognitive impairment: Even if you’ve not been evaluated for dementia, the insurance company might screen you for cognitive impairment as part of its application process. If it finds you to be impaired, it might deny you coverage.

How To Choose and Buy a Policy

Working with a trusted agent to evaluate the policies that will help address your needs and maintain your budget is essential to finding long-term care insurance that has real value. 

“Be sure to understand policy details like coverage amounts, length of benefits, and options to increase coverage over time,” Crist said. “With the right policy and planning, you can gain control and flexibility over your care during retirement.”

As you consider purchasing a policy, check whether your state participates in the Partnership for Long-Term Care program. If it does, you might be eligible to purchase a policy that lets you receive Medicaid coverage for nursing home care after you hit your insurance limit, without having to deplete your assets, according to the Insurance Information Institute.

The exemption equals one dollar for every dollar the insurer pays out. If your coverage limit is $100,000 and the insurance company pays out the entire $100,000 in benefits, Medicaid will take over the cost. When it does, $100,000 of your assets will be exempt from the Medicaid spend-down requirements.

Is Long-Term Care Insurance Worth It?

According to Daniel Morris, founder of Senior Living Interviews, one of the biggest factors into whether long-term care insurance is worth the price is your own family’s history — especially if that history includes Alzheimer’s, Parkinson’s disease, dementia or other chronic conditions requiring extended care.  

“The cost of long-term care can be exorbitant, and without insurance, it can quickly deplete savings and other financial resources,” he said. 

Crist said that for most clients, the peace of mind that comes with having a good long-term care policy in place can be worth the cost. “You never want to find yourself needing care with no way to pay for it,” he said. 

He encouraged you to evaluate the cost of care in your area, along with your assets while conducting an honest assessment of how long you’ll require care. 

“If you have a sizable nest egg you want to protect or prefer higher-end care, get a policy that will adequately cover those costs,” he said. “Those with few assets or in poor health may find the premiums too expensive to benefit.”

Consider working with a Certified Financial Planner or other fiduciary advisor — that is, one required by law to work in your best interests. They can help you evaluate your overall financial picture and options for paying for long-term care.

Conclusion

Long-term care insurance protects your assets by covering some or all of the exorbitant costs of long-term care you receive in-home or in a nursing home or other facility. However, as Morris noted, there are some instances where long-term insurance is not suitable — specifically for people with limited assets, or who might qualify for Medicaid, since Medicaid can cover long-term costs for these people. 

Gabrielle Olya contributed to the reporting for this article.

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