What Is Long-Term Care Insurance?

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Long-term care insurance can help pay for impaired individuals to receive assistance with activities of daily living (ADLs) such as eating and bathing up to the policy’s daily and lifetime coverage limits. Coverage may apply whether the individual moves into an assisted living facility or stays at home.

Read below to see what your options are for coverage and how you can prepare for the future in case you need long-term care as you age.

Key Takeaways

  • Long-term care insurance pays for you to receive care in your home, a retirement community or an assisted living facility if you are unable to perform multiple activities of daily living (ADLs) on your own.
  • You may be able to purchase coverage for long-term care as a standalone policy or as an add-on to a life insurance policy.
  • Long-term care is both expensive and necessary for many people but Medicare provides limited coverage and you may not be eligible for Medicaid depending on your financial status.
  • Annual long-term care insurance premiums can range from around $1,000 to $10,000 per year depending on your age, sex, health, marital status and policy details.
  • Before your insurance company will start paying out long-term care benefits, you may have to pay for care out of pocket during a waiting period lasting 30 to 100 days.

How Does Long-Term Care Insurance Work?

Long-term care insurance is a subset of health insurance that covers medical services and personal care for elderly people or those with disabilities who need regular support in performing their typical living activities. It may be available as a standalone policy or as a rider for a life insurance policy.

By combining long-term care insurance with life insurance, you can guarantee that you get some benefit from the policy, whether that be payment for long-term care services or a death benefit for your beneficiaries after you die. Alternatively, you could purchase a life insurance policy with an accelerated death benefit rider, meaning you are allowed to collect a death benefit while you are still alive if you contract a terminal illness or develop a need for long-term care services.[1]

Some long-term care insurance policies may have an elimination period ranging from 30 to 100 days, during which you must pay for covered services out of pocket before your insurance provider will start paying. This is effectively the deductible for a long-term care insurance policy.[2]

What Does Long-Term Care Insurance Cover?

Long-term care insurance covers expenses related to receiving help with the following activities of daily living (ADLs):[2]

  • Eating
  • Bathing
  • Getting dressed
  • Going to the bathroom
  • Controlling your bladder and bowel movements
  • Getting out of a chair or bed

To be eligible to claim long-term care insurance benefits, you may need to show impairment in at least two of these six ADLs.[2] This coverage can pay for care you receive in your home or in a retirement community, nursing home or similar assisted living facility. It can also cover hospice and respite care.

What Isn’t Covered?

After you buy a long-term care insurance policy, your insurer might not cover expenses related to a preexisting condition for a set period of time. Your policy could also exclude coverage for services related to some mental illnesses, although it generally won’t be allowed to limit benefits for neurological conditions like Alzheimer’s disease and other types of dementia.[3]

Other common exclusions for long-term care insurance policies include treatment for intentionally self-inflicted injuries, treatment related to alcoholism and drug addiction, care you receive in government nursing facilities and care you receive outside of the United States.[3]

A long-term care insurance policy will typically come with a limit on the amount of money it will pay per day and the number of days it will pay for care, adding up to a maximum lifetime coverage limit.

The time limit for a long-term care insurance policy could be as short as two to five years, although some policies will provide coverage for the rest of your life.[4]

Why Buy Long-Term Care Insurance?

Long-term care insurance may be worth buying due to the prevalence of long-term care needs and the high costs that accompany them. A 2017 study found that 70% of adults in the United States who live to age 65 eventually develop a need for long-term services and supports (LTSS) but only 48% actually receive paid care over the course of their lives.[5]

Paying for LTSS out of pocket might not be an option for most people because of how expensive long-term care is. For example, the median price for a nursing home room in 2021 was around $100,000 per year.[6] While many elderly people receive health coverage through Medicare, Medicare only provides coverage for LTSS for up to 100 days.[2]

Meanwhile, Medicaid is responsible for the majority of long-term care coverage across the United States.[7] However, individuals in most states aren’t eligible for Medicaid unless their countable assets are worth $2,000 or less, meaning it is only available to low-income individuals and those who have already spent most of their savings on care.[8] As a result, private long-term care insurance is a more broadly available way to receive financial support in the event that you develop LTSS needs without draining all of your financial resources.

How Much Does Long-Term Care Insurance Cost?

Long-term care insurance rates depend on factors like your age, sex, health conditions and lifetime coverage limit along with whether your benefits grow yearly and whether you file as an individual or as a couple. For example, prices for $165,000 in coverage for adults ages 55 through 65 ranged from $950 to $7,225 per year for individuals and $2,080 to $9,675 per year for couples in 2022.[9]

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

To determine whether long-term care insurance would be a worthwhile investment for you or your family members, you should consider the following pros and cons of buying coverage.



Allows you to receive LTSS benefits without first draining all of your financial resources

Policies typically require medical underwriting so you may not qualify for affordable coverage if you are already elderly, in poor health or in need of long-term care[4]

Coverage amount may automatically increase over time to account for inflation

Insurers can dramatically raise premiums or require you to reduce your benefits in order to keep your premiums the same[10]

Premiums may be waived once you start receiving benefits[2]


How Do I Buy Long-Term Care Insurance?

As you search for the right long-term care insurance policy, it’s ideal to obtain quotes from at least three to five insurance companies. Consider in advance whether you would like a standalone policy or a life insurance policy with a long-term care rider. To make this process go as smoothly as possible, you should consider taking advantage of an online insurance marketplace like SmartFinancial.

Simply insert your zip code below and you’ll be directed to a questionnaire about your coverage needs and budgets. We’ll then share the information you provide with insurance agents in your area who can offer you health insurance quotes or life insurance quotes for free.

Receive a Free Health Insurance Quote Today!


Can I combine long-term care with life insurance?

You can purchase life insurance with a long-term care rider or an accelerated death benefit rider that allows you to collect money early if you contract a terminal illness or develop a need for long-term services and supports (LTSS).

Are there tax advantages if you buy long-term care insurance?

Your long-term care insurance premiums may be tax-deductible if your policy meets certain federal standards.[2]

Is long-term care insurance worth it?

Long-term care insurance may be worth purchasing if you would like to receive LTSS coverage without having to burn through all of your money in order to qualify for Medicaid. However, long-term care insurance may not be worth the cost if you would have to spend more than 5% of your annual income on premium payments.[11]


  1. Administration for Community Living. “Using Life Insurance To Pay for Long-Term Care.” Accessed September 7, 2023.
  2. California Department of Insurance. “Long Term Care Insurance.” Accessed September 7, 2023.
  3. New York State Department of Financial Services. “Long Term Care: Comparing LTC Policies.” Accessed September 7, 2023.
  4. Administration for Community Living. “What Is Long-Term Care Insurance?” Accessed September 7, 2023.
  5. Office of the Assistant Secretary for Planning and Evaluation. “What Is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports?” Accessed September 8, 2023.
  6. Genworth. “Median Cost of Nursing Home, Assisted Living, & Home Care.” Accessed September 8, 2023.
  7. Medicaid.gov. “Long Term Services & Supports.” Accessed September 8, 2023.
  8. Administration for Community Living. “Medicaid Eligibility.” Accessed September 8, 2023.
  9. American Association for Long-Term Care Insurance. “Long-Term Care Insurance Facts - Data - Statistics - 2022 Reports.” Accessed September 8, 2023.
  10. National Association of Insurance Commissioners. “Long-Term Care Insurance Rate Increases and Reduced Benefit Options: Insights from Interviews With Financial Planners,” Page 8. Accessed September 8, 2023.
  11. National Association of Insurance Commissioners. “Long-Term Care Insurance.” Accessed September 8, 2023.

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