Financial Planning and Taxes
Is long term care insurance right for you? 

Is long term care insurance right for you? 

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long term care insurance

Are you worried about the cost of long-term care as you age? Long-term care, which includes services like nursing home care, in-home care, and assisted living, can be pretty expensive. Unfortunately, many people underestimate the cost of long-term care and are unprepared for the financial burden it can create. 

That’s where long-term care insurance comes in. With the right policy, you can protect yourself and your loved ones from the high costs of long-term care. But how do you know if long-term care insurance is right for you? 

In this blog post, we’ll explore what long-term care insurance is, how much it costs, and whether it might fit your unique situation. By the end of this post, you’ll have a better understanding of the ins and outs of the insurance policies and how to get started if you decide it’s right for you. So, let’s dive in! 

What is long term care insurance and how does it work? 

Long-term care insurance covers the costs of long-term care services that are typically excluded from regular health insurance. For example, traditional health insurance will not pay for assistance with activities of daily living (ALDs) such as grooming, preparing meals, housekeeping, etc. Long-term care insurances policies will take care of these expenses through reimbursement. 

If you require long-term care services, you might need to meet the policy’s eligibility requirements, such as being unable to perform a certain number of daily activities or having a cognitive impairment. Interestingly, the better condition you are in health-wise, the cheaper deal you will get. You may choose the amount of policy coverage you’d like throughout your lifetime. If the policy is issued, you will start paying monthly premiums. 

The amount of benefit you receive depends on the specific policy you purchase. Most policies pay a set amount for each day you receive long-term care services, while others pay a lump sum amount per month. Some policies also have a maximum benefit amount, meaning that once you reach that amount, the insurance company will not pay any additional benefits. 

When you make a claim on your long-term care insurance policy, the insurance company will typically require you to provide documentation to support your claim. This documentation may include medical records, bills from healthcare providers, and other evidence of the need for long-term care services. 

How much does long term care insurance cost? 

According to a 2022 study by the American Association for Long-Term Care Insurance, a 55-year-old male can expect to pay around $950 per year for a conventional long-term care insurance policy that provides $165,000 in benefits. For a 55-year-old female, the equivalent coverage would cost around $1,500 per year.  

However, premiums can range from a few hundreds to several thousand dollars per year, depending on your individual circumstances and the policy you are considering. 

Here are some of the factors that can affect the cost of long-term care insurance: 

  1. Age: Generally, the younger you are when you purchase long-term care insurance, the lower your premiums will be. Premiums tend to increase as you get older. 
  2. Health status: If you have a history of serious health problems or disabilities, you may be charged higher premiums or denied coverage altogether. 
  3. Gender: Women tend to live longer than men and are more likely to need long-term care, so they may have to pay higher premiums. 
  4. Benefit period: The benefit period is the length of time for which your policy will pay benefits. Policies with longer benefit periods tend to be more expensive. 
  5. Elimination period: The elimination period is the amount of time you must wait before your policy begins paying benefits. Policies with shorter elimination periods tend to be more expensive. 
  6. Inflation protection: Some policies offer inflation protection, which means that your benefits will increase over time to keep pace with inflation. Policies with inflation protection tend to be more expensive. 

What is the long term care insurance elimination period? 

The long term care insurance elimination period, also known as the waiting period or deductible, is the length of time you must wait between the onset of a covered condition and the start of your long-term care insurance benefits. During the elimination period, you are responsible for paying for your own long-term care services. 

The long term care insurance elimination period is typically expressed in days, and the length of the period can vary depending on the specific policy you have. Common elimination periods for long-term care insurance policies include 30, 60, or 90 days. 

The length of the elimination period you choose can affect the cost of your long-term care insurance policy. Policies with shorter elimination periods tend to be more expensive because they begin paying benefits sooner. However, choosing a more extended elimination period can help you reduce your premiums and make long-term care insurance more affordable. 

What disqualifies you from long term care insurance? 

Long-term care insurance policies vary depending on the insurer and the specific policy, but there are some common exclusions that policyholders should be aware of. Here are some of the most common exclusions in long-term care insurance policies: 

1. Pre-existing conditions 

Many long-term care insurance policies exclude coverage for pre-existing conditions. This means that if you have a health condition that requires long-term care, you may not be able to get coverage for that condition. 

2. Self-inflicted injuries

Most long-term care insurance policies exclude coverage for intentionally self-inflicted injuries, such as injuries resulting from attempted suicide. 

3. Injuries resulting from criminal behavior 

Long-term care insurance policies typically exclude coverage for injuries resulting from criminal behavior or unethical act. 

4. Treatment outside the United States 

Some long-term care insurance policies do not provide coverage for long-term care services received outside the United States. 

5. Care provided by family members 

Some long-term care insurance policies may exclude coverage for care provided by family members, unless the family member is a licensed healthcare provider. 

6. Care received in certain settings 

Some long-term care insurance policies could refuse to pay for care received in certain settings, such as hospice care or care provided in a government-run facility. 

7. Substance abuse

If you have a history of substance abuse, you may be disqualified from coverage or be charged higher premiums. 

8. Age 

Some insurance companies have age limits for long-term care insurance, and older applicants may be charged higher premiums or denied coverage altogether. 

It’s important to carefully review your long-term care insurance policy to understand what is covered and what is excluded. If there are exclusions that are concerning to you, you may want to consider looking for a policy that offers more comprehensive coverage. 

Long-term care insurance vs. self-funding 

With long-term care insurance, you pay a premium to an insurance company in exchange for coverage for long-term care services. On the other hand, self-funding or private pay means paying for long-term care services out of your own pocket. While both can be good options to cover long-term care expenses, some key factors must be considered. 

Pros and cons of having long-term care insurance: 



  • Financial protection against the high cost of long-term care 
  • Can be expensive 
  • Provide peace of mind 
  • May have limits on coverage 
  • Premiums may be tax-deductible 
  • Some policies may have waiting periods before benefits are paid out 
  • Unused insurance gets passed on to spouse or successors. 
  • If you stop paying your premium, you generally lose your benefits 

Pros and cons of having self-funding or private pay: 



  • Provides greater control over your long-term care choices 
  • May limit your options for long-term care services and providers 
  • May be less expensive in the long run if you don’t need long-term care 
  • Can be risky if you end up needing long-term care 
  • No need to worry about premiums 
  • May not provide the same peace of mind 

Final thoughts 

In conclusion, deciding whether long-term care insurance is right for you is a personal decision that depends on several factors, including your age, health, financial situation, and personal preferences. Long-term care insurance can provide financial protection and peace of mind, but it can also be expensive and may not be necessary for everyone. Consulting with a financial advisor or elder law attorney can also be helpful in making an informed decision about long-term care planning. 

We hope that this blog has helped you understand how long term care insurance works, the cost associated with it, and the potential risks of having or not having such insurance policies in place. If you need more information on this topic, please feel free to reach out for a free consultation. 

Related articles: 


  • Is long term care insurance worth it? 

Long-term care insurance can be a good option for those who want to protect their assets and ensure that they have access to quality long-term care services in the event of an illness or disability. However, it can also be expensive, and there is no guarantee that you will ever need long-term care or that the insurance policy will cover all of your needs. 

In short, if you have significant assets and income, you may be able to self-fund your long-term care expenses without jeopardizing your financial security. On the other hand, if you have limited assets and income, long-term care insurance may be a more affordable way to protect your savings and ensure that you receive the care you need. 

  • What happens to unused long-term care insurance? 

Unused long-term care insurance benefits are generally not returned. However, it gets passed onto the surviving spouse or family member. 

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