Long-Term Care Insurance for Seniors: Costs and Considerations

long-term care insurance for seniors

You’ve no doubt heard of long-term care insurance for seniors (LTC), and you may have even debated whether or not you should sign up for a plan. While not everyone can afford long-term care insurance, knowing what your options are and what factors influence the cost is important.

For many seniors, LTC insurance is appealing. The coverage makes up for gaps that Medicare plans leave open, like nursing home costs and in-home or assisted living care. When paid for on their own, these services quickly add up to tens of thousands of dollars. But seniors living on a fixed income might not be able to add this much-needed support and are left in a tough predicament. They either need to figure out a way to pay for the high premiums of an LTC plan they may never need, or they have to take a gamble on potentially high out-of-pocket costs.

How much does long-term care insurance for seniors cost?

Annual costs for long-term care keep growing. In 2020 the average annual premium for a single male ranged from $1,400 to $2,100, and a single female from $2,100 to $3,100. Typically, women live longer than men and tend to file more claims, so their premium costs are higher. These costs are also affected by your overall health and your predicted future medical needs. When you consider paying this in addition to existing Medicare premiums, it’s no wonder many seniors are concerned with the price tag.

How are LTC prices determined?

Knowing how the prices are determined can help you make an informed decision about how you approach your health care spending. In general, LTC policies look at three factors: age, gender and health.

    • Age: The older you are when you sign up for LTC insurance, the higher your premiums will be. To get the best rates, start looking at policies when you’re in your 50s.
    • Gender: On average, women live six to nine years longer than men. This means policies for females usually pay out significantly longer than policies for males. Unfortunately, this means higher prices for women.
    • Health: Many policies offer quotes for those in a “preferred health” group and those with “some health issues.” The healthier you are, the lower your premium. Unfortunately, some conditions like muscular dystrophy or dementia can disqualify you completely from a plan—all the more reason to start shopping early!

Other factors that can affect cost are your marital status and the benefits provided. Married couples buying two policies will qualify for discounts that single buyers won’t. 

How can you find the best deal?

Once you decide an LTC policy is the best choice for you, it’s time to start shopping. But first, educate yourself on all your options. Here are some factors to keep in mind:

  • Medicaid could be an option: Some beneficiaries may qualify for LTC coverage under Medicaid. In fact, Medicaid is the largest payer of LTC premiums in the country
  • Consider a whole life policy: Look for whole life insurance policies that allow you to draw funds for LTC coverage, known as a hybrid model. Unlike traditional LTC policies that often see rate hikes, you can lock in rates with a whole life policy. And, if you end up not needing the extra care, your beneficiaries will see a larger payout. But these tend to be more expensive than a stand-alone LTC policy.
  • Start shopping early: The younger you are when you start a policy, the lower your rates will be. While LTC may seem like overkill in your 50s, you’ll be avoiding potential rate hikes due to age or your level of health. This isn’t to say that your premiums won’t go up, but you’ll start off at a lower price point. 
  • Shop around: Always compare rates of at least three different plans before deciding on one. Of course, this is true when you shop for any insurance policy!

If you have questions about LTC coverage or need help choosing the best-fit plan for you, contact us at 877.255.6273 for more information.


image credit: shutterstock/bangoland

Pete Blasi