The decision to purchase long-term care insurance is a big one. Protecting your future is your utmost priority, but you may be wondering if it’ll be worth it. Long-term care insurance is expensive, premiums usually increase as you age, and it’s hard to predict what will happen in the future. 

While there are certain drawbacks, long-term care insurance can be a safety net and source of comfort in older age. We’ll guide you through the pros and cons of buying this type of insurance and what you should consider when deciding whether or not long-term care insurance is worth it.

Key takeaways:

  • There are pros and cons to buying long-term care insurance. It can be expensive and the future is unpredictable, but it may benefit some people.

  • Long-term care insurance may or may not be worth it depending on your personal and financial situation. 

  • Alternatives to long-term care insurance include Medicaid, paying out of pocket, and some short-term services covered by Medicare.

What is long-term care insurance? 

Long-term care insurance protects you during a time in which you may not be able to take care of yourself or perform activities of daily living due to a chronic illness, disability, or aging. Depending on the policy you purchase, it can cover:

Unfortunately, long-term care isn’t covered by Medicare—and health insurance that covers it can be hard to find. Medicaid can cover long-term care, but eligibility requirements are strict and rules vary by state. Some exclusions apply for Medicaid’s coverage of long-term care. Depending on the situation, you may not receive coverage for custodial care, non-medical services, or services in facilities such as assisted living or nursing homes. That’s why companies offer long-term care as its own form of insurance. 

Types of long-term care insurance

There’s a variety of long-term care insurance options to meet several different needs. In general, each type of long-term care insurance has its own premiums, benefits, elimination periods, and benefit amounts that can also vary based on the insurance provider.

Here are the most common types of long-term care insurance:

  • Traditional long-term care insurance: Covers what you’d typically find in long-term care insurance (details above)

  • Hybrid long-term care insurance: Combines long-term care insurance with another insurance, like life insurance

  • Short-term care insurance: Covers long-term care services for a shorter period of time (usually up to one year)

  • Group long-term care insurance: Long-term care insurance offered by employers or other groups

Understanding the different types of long-term care insurance can help you determine whether long-term care insurance is worth it for you. 

How much does long-term care insurance cost?

The cost of long-term care insurance depends on a number of factors, like:

  • Whether you’re buying with a spouse

  • Your gender

  • How old you are

  • Your health status

  • Coverage amount

  • Inflation offsets

  • The insurance provider  

As a point of reference, we’ve broken down what average costs would look like at different ages, genders, and as a married couple or as a single person for a benefit amount of $165,000.

StatusAt age 55At age 60At age 65
Single woman$1,500$1,960$2,700
Single man$900$1,200$2,700
Married couple$2,080 combined$2,550 combined$3,750 combined

These premiums represent the base annual cost per year. Most long-term care insurance policies also offer you a choice to incorporate an annual inflation growth provision (1% to 5% each year) that’s tacked on to your premium. This makes long-term care insurance more expensive, but your premiums are protected against future inflation.  

As you can see, long-term care insurance can be expensive, especially for single, older women. Plus, these charts only show a benefit amount of $165,000 with no inflation growth provisions. Long-term care insurance can be even more expensive for higher benefit amounts and if you choose to add inflation growth factors.

Is long-term care insurance worth it?

Ultimately, it’s up to you to decide if long-term care insurance is worth it. There are many personal, health, and financial considerations that are unique to every person. This makes it hard to definitively say if long-term care insurance is or isn’t worth it for everyone. 

For example, it may be more worth it for someone who has dementia. It may not be as worth it for someone who has other caregiving options (like family). Below, we’ll highlight some pros and cons of long-term care insurance so you can make the right call for your situation.  

Pros of long-term care insurance

  • Provides a sense of comfort for the future

  • Relieves family burden/family caregiver duties

  • Helps protect personal savings and assets from the cost of long-term care

  • Can be beneficial to people with chronic conditions or people who have a high risk for developing chronic conditions in the future 

Cons of long-term care insurance

  • Expensive, especially with inflation protections

  • The future is unpredictable—you never know whether or not you’ll end up needing it

  • Can be complex and insurance providers may not have your best interest at heart

  • Other alternatives could better suit a person’s needs (discussed below) 

What to consider when deciding on long-term care insurance

When thinking about long-term care insurance, there are numerous questions you should first consider. Here’s a list to get you started:

  1. What is your health status? If you have chronic conditions or a history of medical issues, getting long-term care insurance might be the right choice. 

  2. Do you have alternatives? People who are eligible for Medicaid may receive long-term care coverage. You can also look into your personal caregiving options, the cost of paying out of pocket for services you need, and how Medicare coverage can help you manage medical conditions.

  3. What is your financial situation? Look over your savings, assets, and other sources of income to see if you can afford long-term care insurance. If you can, it may be worth it to also see what it may cost you to pay for services on your own and compare your costs.

  4. What do your retirement plans look like? Factor in estate planning and other financial considerations in retirement. Once you’re on a fixed income, you’ll want to think about which expenses are the most important. Similarly, if you decide to purchase life insurance, you may want to look into hybrid policies.

From here, it’s a good idea to research the right policy features for you, affordable premiums, and reputable insurance providers to really determine if purchasing long-term care insurance is the way to go. Keep in mind that planning for long-term care insurance as early as possible can save you money and help you prepare.

Alternatives to long-term care insurance

Not everyone purchases long-term care insurance, and you don’t need it in order to receive long-term care. If you do end up needing long-term care in the future and had chosen not to purchase long-term care insurance in the past, you may be able to reduce your costs. If you qualify for Medicaid, it may help cover the costs. Other options include:

  • Planning to receive support family or personal caregivers

  • Paying for services out of pocket

  • Relying on Medicare coverage for certain conditions

Understanding all your Medicare benefits can help you plan for the future as well. In the next section, we’ll explore some of the ways Medicare covers useful services that are often included in long-term care insurance. 

Medicare coverage for long-term care

While Medicare doesn’t cover long-term care services, there are certain services it does cover that could be beneficial to you.

Medicare covers:

If you have more questions about how your Medicare can cover your future needs, a Chapter Medicare Advisor would be happy to help. Call us at 855-900-2427 or schedule a time to chat to get answers today.

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