| Monthly benefits are $3,000 | $5,000 monthly benefits | $7,000 monthly benefits | $9,000 monthly benefits | |
|---|---|---|---|---|
| male | $128 | $214 | $299 | $385 |
| woman | $215 | $359 | $503 | $646 |
Note: A three-year benefit multiplier means your policy will pay up to three times the monthly or daily benefit amount. Benefit multipliers can give an idea of how long your policy benefits will last.
Factors Affecting Cost
Gender (in most states)
As of 2013, women paid higher rates than men for long-term care insurance in states that do not have a legal requirement for unisex insurance. This is because women live longer than men, and generally use long-term care facilities more often, accounting for the majority of requests for benefits.
age
The older you are, the more long-term care insurance will cost. But if you buy too young, you’ll pay premiums over a much longer period of time, which may not be affordable. AARP recommends that you buy long-term care insurance in your early to mid-60s, and that couples buy at age 55. Individuals may pay more in monthly premiums than they would if they started in their late 40s or early 50s. Lower overall premium till age 80. About 70% of people over age 65 will need long-term care.
Health and smoking status
If you are a smoker, your rate will likely be higher. If you were in excellent health when you purchased your policy, your rates should be lower. You may pay more for having certain health conditions, or you may be denied coverage altogether because of those conditions. The likelihood of this happening increases with age, so, if you’re worried about needing long-term care in your 60s, you may want to buy insurance in your 50s and in good health.
Maximum daily or monthly benefit amount
Long-term care insurance policies come with a maximum amount that the insurer will pay for care, usually expressed on a per-day or per-month basis. Increasing your coverage limit will also increase your premium.
Maximum benefit period
The maximum benefit period can be restricted after a certain number of years or Based on the maximum dollar amount that can be carried over in any given year. In some states, like California, insurers use a pull-of-money method that multiplies your daily or monthly benefits by a certain number of years to determine your net benefit. For example, if your policy pays $5,000 per month and has a three-year multiplier, your maximum benefit would be $180,000. If you use the full benefit every month, your benefits will last for three years. But if you use less than the total monthly benefit, your policy may last for more than three years.
When choosing the benefit period, keep in mind that 43% of claims are for one year or less, while 15% are for five years or more.
elimination period
Most policies also come with a elimination period, which is the amount of time you must pay for care before your policy benefits begin. Choosing a longer elimination period, such as 90 days, can help lower your premiums. Make sure you have enough savings to cover the cost of care during this time.
Riders
Many long-term care insurance companies offer riders, such as inflation protection or premium waivers, that prevent you from having to pay long-term care after you receive it. In most cases, adding these benefits will increase your premium.
Top Long Term Care Insurance Companies
The best long-term care insurance for you will depend on your rates and individual factors that affect your coverage needs. Here are some of the top long-term care insurance companies you can consider.
- Nationwide: Nationwide offers a linked-benefit long-term care policy that pays 100% of the monthly benefit to eligible policyholders and a minimum death benefit of 20% to the beneficiary even if you exhaust all of the long-term care funds. Benefits are flexible and can be used to pay an informal care provider, as long as a licensed health care practitioner approves the informal care. Nationwide has an A+ (superior) financial strength rating with AM Best.
- New York Life: New York Life offers both traditional long-term care insurance and a combination policy with life insurance. Policies can be customized to include the type of care you want, including home care. You will need to speak to an agent for details. AARP also offers long-term care insurance through New York Life. New York Life has an A++ (superior) financial strength rating with AM Best.
- Mutual of Omaha: Mutual of Omaha offers a traditional reimbursement policy that pays for your actual care costs based on receipts (after an exclusion period), or you can choose a cash benefit that pays you a set dollar amount each month. Omaha Mutual offers online cost estimates. The company has an A+ (superior) financial strength rating with AM Best.
- Lincoln Finance: Lincoln Financial offers long-term care benefits only through its hybrid universal life insurance policies. There is no elimination period, and the company uses streamlined underwriting, so you won’t need a medical exam. Lincoln Financial has an A (Excellent) financial strength rating from AM Best.
- Brighthouse Financial: Brighthouse offers a hybrid life insurance product that offers a guaranteed death benefit and a monthly cash benefit if you need long-term care (the latter reduces your death benefit). Unlike a reimbursement policy, you don’t have to submit receipts to receive benefits. You can choose to link your account to an index or indexes to increase your benefits through investments. Brighthouse Financial has an A (Excellent) financial strength rating from AM Best.
Your policy comes with a free-look period that gives you a certain number of days to review your policy and cancel without losing money. For example, in Florida, you have a 30-day free look period.
How to save money on long-term care insurance premiums
- Choose an individual policy: Many companies offer a hybrid product that includes life insurance And Long-term care insurance. The advantage is that if you don’t need long-term care, your premiums will still pay for your beneficiaries. However, these policies usually have high premiums. You can reduce your premium by getting an individual policy.
- Choose a refund policy: An indemnity or cash-benefit policy doesn’t require you to submit receipts—you can pay your monthly benefits as you see fit. But these policies cost more and can come with tax consequences. To save money, choose a refund policy.
- Choose a longer elimination period: The elimination period of long-term care insurance affects your premium. A policy with a 90-day waiting period usually costs less than a policy with a 30-day elimination period. Just make sure you have savings to cover the cost of care while you wait for benefits to start.
- Choose a lower coverage limit: You can choose to buy less coverage than you need and cover the remaining costs from your savings. This will reduce your monthly premium.
- Compare quotes: Depending on individual factors, some companies may pay you lower premiums for the same coverage than others. That’s why it’s a good idea to collect a handful of quotes and compare your options. Just be sure to compare third-party ratings of companies like AM Best and JD Power when evaluating companies.
- Shop with your partner: You will usually save money if you buy a joint policy with your spouse.
- Buy in your 50s: Rates begin to rise between 6% and 8% annually in your 60s. If you buy in your 50s, your premiums will be lower than if you buy later. You are also less likely to be denied coverage for health reasons, and you can take advantage of the policy if you need care earlier.
Knowing when to buy coverage can be difficult. Buying early means lower premium payments, but can increase your total premium over time. Use your best judgment. And if you have a family history of health problems that may require long-term care (such as dementia), it’s probably wiser to get a policy sooner rather than later.
How to choose the best long-term care insurance
Decide if you want a hybrid or standalone policy
Hybrid life insurance policies with long-term care benefits give you more flexibility. If you die without needing long-term care, your beneficiaries will receive a benefit. Another advantage of a hybrid policy is that the premiums are locked in, which may not be the case with an individual policy. However, hybrid policies are more expensive than standalone long-term care insurance.
Determine how much coverage you need
The national average cost of a private room in a nursing facility is over $9,000 per month, but your long-term care costs will depend on where you live and the type of care you seek. Many insurance companies offer a calculator that estimates costs in your area. When deciding how much coverage to buy, consider the money you’ll also receive from Social Security and your pension.
Compare coverage types and features
If you don’t want your family members to deal with submitting receipts for reimbursement, consider a more expensive indemnity policy, which means benefits are paid directly to you and receipts may not be required. You’ll want to compare features like inflation protection and waiver of premium riders.
Compare company ratings
Check financial strength ratings, customer service reviews and National Association of Insurance Commissioners (NAIC) complaint indices for companies you’re considering.
Avoid choosing a company with an AM Best rating below A- (Excellent) or an expected NAIC Complaint Index (above 1.00).
Compare quotes
Try to collect quotes for the same coverage parameters so that you have a fair comparison. Pay attention to whether the premiums are guaranteed for a certain number of years or whether they can increase. You can request to review the company’s rate history.
What is long term care insurance?
Long-term care insurance pays the cost of care or provides a fixed cash benefit when a policyholder is deemed chronically ill by a health care provider. Long-term care insurance can cover the cost of long-term care in your home or a facility. Each policy sets limits on how the money can be used, how long the policy will pay benefits and the maximum amount the policy will pay.
Is long-term care insurance worth it?
In many cases, yes. According to the Administration for Community Living, more than 66% of 65-year-olds will need long-term care. By paying for long-term care insurance you can cover your long-term care needs for pennies on the dollar instead of depleting your life savings if you become chronically ill.
What disqualifies you from long term care insurance?
You generally won’t qualify for long-term care insurance if you currently receive long-term care or need assistance with activities of daily living (ADLs), which are six specific daily activities such as eating and getting out of a chair if you use a walker, wheelchair, multipurpose cane, crutches, or oxygen. You may not be eligible if you use or have a condition such as Alzheimer’s or Parkinson’s.
What does long-term care insurance cover?
Most long-term care insurance policies provide benefits for care received in a variety of settings, such as a nursing home, assisted living facility, or in your own home. To start receiving benefits, a health care provider typically must certify that you either need help with two of six ADLs or require supervision due to cognitive impairment. Some policies pay only the actual cost of care, while others provide a fixed monthly benefit.