If you’re one of the 70% of Americans expected to need long-term care services, then long-term care insurance can be a lifesaver.

Long Term care insurance can be super expensive, and costs are expected to rise really fast in the coming years.

Long-term care insurance coverage can give you and your family peace of mind.

how does long term care insurance work

As life expectancy continues to increase, the probability of needing long-term care is also likely to rise. 

In this guide, I'll share more information about what long-term care insurance is, what it covers, and which companies offer the best policies.

​In This Article



What is Long-Term Care Insurance?

"In Plain English," long-term care insurance is protection against the loss of you being able to perform your activities of daily living.

Unlike traditional health insurance Long-term care insurance provides the assistance you need to carry out your daily routines, where as health insurance is designed to treat medical conditions.

As we get older, we become vulnerable to conditions that rob us of our independence.

Lack of mobility, injuries, chronic medical conditions, Alzheimer’s disease, and dementia can make performing the “activities of daily living,” also known as ADLs, difficult or impossible.   

There are 6 ADLs that, if you’re unable to perform at least two of them without assistance, qualify you to receive benefits from your long-term care insurance.

They are:

  • Eating
  • Bathing
  • Dressing
  • Caring for incontinence
  • Toileting (getting on and off the toilet)
  • Transferring (moving to and from a bed or chair)

While none of us want to be in a situation where we can't do just 1 of those things; the truth is that as we age, not being able to do some of those things will be a reality. 

What Does LTC Insurance Cover?

Considering the high cost of assistance and care (ranging from $52 to $280 depending on the level of care you need), it’s most likely worth paying the average annual premium of $2,727.

Coverage falls into two main categories:

  • Home care assistance
  • Residency in a nursing or assisted living facility.

Most policies sold today are very comprehensive. They usually allow you to use your daily benefit in a variety of settings, including:

  • Your home
  • Respite care
  • Hospice care
  • Nursing homes
  • Adult day service centers
  • Alzheimer’s special care facilities
  • Assisted living facilities (also called residential care facilities)

At your home, a comprehensive policy will generally cover services such as:

  • Skilled nursing care
  • Help with personal care, such as bathing and dressing
  • Occupational, speech, physical, and rehabilitation therapy

The price of assisted living facilities has risen drastically since the figures started getting tracked in 2003.

Every year, these service fees are expected to grow from 1.8% to more than 7%. As of 2019, it costs an average of $90,155 to have a semi-private room in a nursing home. 

Want a private room? Now you’re looking a six-figure price tag.

On average, claims for long-term care insurance last two years or less, but 14% of recipients need care for periods that exceed five years.

3 Best Long-Term Care Insurance Companies

Though the number of long-term care insurance providers has dropped from more than 100 to less than a dozen since the year 2000, you still have a variety of choices, and premium prices vary widely.

We identified the top three long-term care insurance companies in business today, so you can narrow down your search and pick the one that best fits your needs and budget.

Golden Care

As an independent agency representing top-rated carriers, you can get the best coverage when you shop for policies with Golden Care.

When you work with one of their agents, they’ll match you with a company and policy that fits your needs. Choose from big names like Blue Cross Blue Shield, Kemper, Aetna, and more.

Features and Benefits

  • No elimination period
  • Reputation for knowledgeable and helpful agents
  • Cost-of-living adjustments available
  • High max benefits coverage at reasonable prices
  • Option to pay premiums in monthly or yearly installments
  • Hybrid life insurance and long-term care insurance policies available
  • Available in all 50 states

LTC Resource Centers


LTC Resource Centers offers access to a variety of long-term care policies, including asset-based long-term care, which means you pay a single lump premium to begin coverage.

There are several pros to this approach, including premiums that never go up and being eligible for a refund if you don’t use your benefits during your insurance term.

Plans purchased through LTC Resource Centers are also equipped with a Partnership Program, which allows you to go on Medicaid while “spending down” your assets.

Features and Benefits

  • Option to waive the elimination period
  • Sample pricing available on the website
  • Inflation protection available at 3% and 5%
  • Refundable premium if you never use care
  • Shared benefits and survivorship available
  • Option to transfer premiums to a beneficiary
  • Option to “pay-as-you-go” or fund your plan upfront
  • Flexible elimination periods, including 30, 60, 90, 180, and 365 days
  • Hybrid life insurance and long-term care insurance policies available

New York Life

As a recognizable name in the insurance world, you cannot go wrong with New York Life.

If you’re on the fence about whether you need coverage or not, use their interactive long-term care cost estimating tool to see what your potential financial obligation will be. 

The costs are broken down by state and region, so you get an accurate picture of what the cost of care is for eight different services.

The list includes the hourly rate for home health aides, per-visit rates for registered nurses, and monthly and annual rates for a variety of categories of assisted living and nursing facilities.

One of the main reasons that New York Life tops our list is their high financial strength rating.​

It’s no secret that long-term care insurance companies are feeling the burn of lower interest rates (which prevents them from getting the investment yield on their premiums that they’ve grown accustomed to), longer life expectancies, and ever-increasing costs. 

It’s smart to consider the financial strength of an insurance company because if they go out of business when you need to cash in on your policy, then you’re out of luck.

Given that New York Life has been in business for 175 years and has maintained steady financial strength, New York Life offers the greatest peace of mind.

Features and Benefits

  • A+ BBB rating
  • Group Rates Available
  • Inflation protection available
  • Option to “pay-as-you-go” or fund your plan upfront
  • Hybrid life insurance and long-term care insurance policies available

No matter the company you choose, you will get excellent customer service and be able to find the long term care coverage you need.

Why Buy Long-Term Care Insurance?

Wondering who needs long-term care insurance and whether you should consider it for yourself or your loved ones?

The best time to buy this insurance is before you need it. If you wait until you’re in dire need, then you won’t get approved for a policy.

Still, if you begin paying premiums too far in advance, you could be throwing money away that you could use for retirement planning or a vacation you’ve always wanted to take.

The ideal candidate for long-term care insurance is going to be between the ages of 50 and 65.

Most companies require a health checkup or physical before you’ll get approved, so it’s wise to lock-in a policy before your health declines. 

If you are optimistic about staying healthy, then you can potentially wait longer.

what is long term care insurance

Waiting a little bit longer can potentially save you thousands of dollars because the chance of filing a claim in your 50s is much lower than in your 70s. 

89% of LTC insurance claims filed were by people over the age of 70, so the trick is to time your application so that you can get lower rates and get approved.

You don't need to spend 20 years paying premiums for coverage you don’t use.  A long-term care insurance policy is a smart way to protect your savings. 

Given how expensive daily assistance is, it won’t be long before the average savings account is wiped out.

Wouldn’t you instead maintain your nest egg in retirement or have something to leave to your heirs?

Before you decide that you can count on Medicare to provide this coverage, keep in mind that Medicare will only cover short term stays and limited amounts of nursing and rehab.

For long-term care, you’re on your own. 

While there is government assistance available in the form of Medicaid, recipients are going to have to hit financial rock bottom before becoming eligible.

Anyone that has more than $2,000 in assets would not qualify for Medicaid.

So, to receive government assistance for long-term care, you would have to spend virtually all of your savings and have nothing left to live on. 

There are exceptions, which is referred to as a state partnership plan, which we’ll explain in more detail later in this article.

Cost of Long-Term Care Insurance

The cost of long-term care insurance varies greatly, but there are a few general rules to keep in mind:

  • Women’s policies tend to cost more than men’s Because They Live Longer
  • The older you are, the more expensive your policy will be.
  • People with poorer health are going to pay more for the same coverage
  • Married people’s policies & Joint Policies are less expensive.
  • Adding features to your insurance coverage will increase your premium.

According to data from Genworth, you can get benefit coverage of $161 per day for an average of about $2,727 in annual insurance premiums. 

However, if you want to protect your benefits from inflation or you want to decrease the waiting period to become eligible for benefits, you’ll have to add a rider to your policy.

Any additional riders will usually increases the cost of your policy. 

Tax Advantages of Buying L-T-C Insurance

Do you itemize your taxes? If so, you can potentially claim your long-term care insurance as a tax deduction.

To qualify for this deduction, your total medical expenses (including this premium) must exceed 7.5% of your adjusted gross income. 

How to Buy Long-Term Care Insurance

The process of buying long-term care insurance is relatively straightforward.

The first step is to fill out an application (online is easiest) and then answer some questions about your health history.

Depending on the provider, you may need to talk with a doctor, either in person or on the phone. 

As you evaluate your options, consider your lifestyle and financial goals.

Do you want to pay more for coverage now to ensure that you have the most choices for care and amenities?

Or, would you prefer a more budget-friendly policy in exchange for sacrificing some options and perks? 

Only you know the answer to that question, but a chat with a licensed insurance provider can also help guide you in the right direction.

There’s also the potential to get a group rate discount by purchasing a plan through your workplace.

These plans often have more lax qualification standards, so it’s worth checking out if you have any health concerns that could stop you from getting a reasonably priced policy. 

We still recommend doing an independent search, however, and comparing all of your options. 

Understanding State “Partnership” Plans

It’s in the government’s best interest for its citizens to prepare for long-term care. To help provide support, some states offer a “partnership policy.”

These policies offer additional protection to policyholders by providing cost-of-living adjustments, which help protect your benefits from being eaten away due to inflation.

These policies also allow recipients to access Medicaid funding sooner than the traditional $2,000 asset threshold.

As a result, people that need long-term care can potentially qualify for Medicaid while preserving the bulk of their savings. 

For example, let’s say your long-term care policy qualifies as a partnership plan.

Due to a chronic medical condition, you’re receiving care from a full-time nursing facility, which costs $95,000 per year. 

If, after two years, you’ve exhausted all of your benefits, you would have to spend down your assets to $2,000 to qualify for Medicaid.

But, a partnership plan allows you to have $97,000 in assets to be eligible for Medicaid ($95,000 cost burden + $2,000 Medicaid asset threshold).

​Taking Action

Think of long-term care insurance as an investment that you hope you never have to use. 

Now that you understand what long-term care insurance is, how much it costs, and how it works then there is no need to waste any time.

Getting a policy should be a no-brainer and it's just as simple as clicking here to get a quote or one of the buttons above and don't forget to compare prices. 


Sa El

About the author

Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 11 years of experience in the industry.  He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. He is also an Official Member of the Forbes Finance Council, a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.


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