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How Much Does Long-Term Care Insurance Cost?

Average Cost of Long-Term Care Insurance

As a baseline, the average cost of long-term care insurance for a 55-year-old man and 55-year-old woman annually is $950 and $1,500, respectively.

When it comes to your financial future, there’s nothing more responsible than staying prepared for the unexpected — including budgeting for long-term care insurance.

Nearly 70% of people over the age of 65 will need this type of aid in their remaining years, whether that means residing in a long-term care facility or having a live-in nurse help you with daily tasks. 

Use this long-term health insurance cost guide to answer common questions such as: What is long-term care insurance? How much does long-term care insurance cost? What does long-term care insurance cover? 

Here you’ll find average long-term care premiums and even information on how to secure a long-term care insurance policy that’s best for your wallet. 

What Is Long-Term Care Insurance? 

A definition explains what’s included in long-term care insurance policies.

Long-term care insurance provides financial assistance to those suffering from chronic health conditions, such as Alzheimer’s disease, dementia, or severe arthritis. Qualified individuals use these funds to pay for professional medical assistance needed to maintain their well-being. 

These long-term care policies also enable those in need to afford care that would likely be unaffordable if they were forced to pay out of pocket. In fact, consumer spending on out-of-pocket long-term care reached $64 billion in 2020, making “cheap” the last word used to describe this industry. 

What Does Long-Term Care Insurance Cover?

You can use long-term care insurance for medical and non-medical assistance. Medical assistance provided by long-term care helps with activities of daily living (or ADLs), including: 

  • Walking
  • Eating and drinking 
  • Using the bathroom
  • Transferring 
  • Dressing
  • Bathing 
  • Incontinence

Non-medical assistance extends to instrumental activities of daily living ( or IADLs), such as:

Once you learn the type of coverage you’re looking for, the next step is finding a long-term health insurance provider and policy that fits those needs.

How Long-Term Care Insurance Works + How To Buy It

Five illustrations depict factors that may impact your annual long-term car insurance cost.

Buying a long-term care policy doesn’t have to be overwhelming. You can break everything down into four simple steps:

  • Step 1: Research attractive long-term care insurance policies 
  • Step 2: Submit an application (medical records are sometimes required)
  • Step 3: Choose a coverage plan (if approved)
  • Step 4: Begin paying premiums

Depending on your coverage plan, you should be able to qualify for benefits if you’re unable to do two or more of the ADLs mentioned above. 

Keep in mind that most long-term care policies have an “elimination period,” requiring you to pay out of pocket for 30, 60, or 90 days before the insurer begins reimbursing funds.

Average Cost of Long-Term Care Insurance

It’s smart to get an idea of what you’ll have to pay to receive the care you need. The following are annual estimates of long-term care insurance premiums in 2022, according to the American Association for Long-Term Care Insurance (AALTCI).

Status Age Annual Premium
Single male 55 $950
Single female 55 $1,500
Couple 55 $2,080
Single male 65 $1,700
Single female 65 $2,700

As you research, remember that long-term care premiums depend heavily on a number of factors. All long-term health insurance providers typically take into account: 

  • Age: Long-term care insurance premiums typically increase as you get older. 
  • Health: Long-term care insurers prefer to approve those in good health because it reduces the chances of them needing the assistance their policy covers.
  • Marital status: Long-term care premiums are often lower if you and your spouse apply as a couple rather than individuals. 
  • Gender: Women pay higher premiums on average due to their longer life expectancy.
  • Carrier policies: Each provider sets their own long-term insurance rates depending on coverage plans offered. 

Sure, it might take a little work finding the right long-term care policy for your finances, but it’s better than overspending on unruly out-of-pocket costs.

Long-Term Care Costs Without Insurance

A chart breaks down the pros and cons of dealing with monthly long-term care insurance costs.

Unfortunately, the average monthly cost of long-term care insurance can quickly eat away at savings meant to be a cushion for when you get older or decide to retire

For example, the median yearly cost to live in a nursing home reached over $100,000 in 2021. That’s half a million dollars on living expenses alone if you need aid for more than five years, which is common. 

To get more insight into what these bills could look like, here are typical monthly costs of different longer-term care services this past year:

Long-Term Care Service Monthly Cost
Homemaker services $4,957
Home health aide $5,148
Assisted living facility $4,500
Adult day health care $1,690
Nursing home care $9,034

Tax Benefits of Long-Term Care Insurance

Investing in insurance for long-term care does come with its advantages — one of which being tax-deductible premiums, depending on your provider. Keep in mind that there are often requirements to meet, like choosing a tax-qualified insurance plan and/or spending a certain percentage of your adjusted gross income (AGI) on medical expenses each year.

But if you are able to meet these demands, here’s how much average deductions can save you monthly by age:

Age Maximum Deductions
40 and under $450
41–50 $850
51–60 $1,690
61–70 $4,510
71 and above $5,640

Insurance for long-term care offers you an opportunity to have more security when it comes to the future of your financial wellness. Use the Mint app to help you find the peace of mind you’re looking for by learning how to budget and better manage your money in your current day-to-day life. 

FAQs about Long-Term Health Insurance Costs

Still have some lingering questions about long-term health insurance? We have answers.

What Is the Best Age To Purchase Long-Term Care Insurance?

According to the AALTCI, the best time to purchase long-term health insurance is mid 50s. This time frame helps make your policy more cost-effective and increases your odds of approval.

What Are Alternatives to Long-Term Care Insurance?

Alternative options to long-term care insurance that you can explore include:

 

Life insurance policy featuring a long-term care rider

Personal savings

Annuity accounts 

• Family and friend care

What Are the Pros and Cons of Long-Term Care Insurance?

Here’s a breakdown of common benefits and drawbacks of long-term care insurance.

Pros of long-term care insurance include:

• Peace of mind

• Reduced out-of-pocket costs

• Savings/asset protection

Cons of long-term care insurance include:

• High monthly payments

• Delayed reimbursements

• Approval requirements

• Potentially unused services

What Are the Five Features You Should Consider When Buying Long-Term Care Insurance?

Here are five main factors to consider before purchasing a long-term health insurance policy:

• Current age

• Daily benefit amount

Inflation protection

• Length of benefit payments

• Elimination periods

Is Long-Term Care Insurance the Same as Life Insurance?

No. Life insurance policies provide a financial payout to your beneficiaries after your death. Long-term health insurance policies provide financial assistance to those suffering from chronic health conditions and/or diseases who can’t live independently.

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