Is Long Term Care Insurance Worth It?

Let’s talk about something that affects many of us and our loved ones—long-term care. The reality is sobering: seven out of ten senior Americans will need long-term care support as they age. For women like us, this conversation becomes even more important. We typically need care for nearly four years, while men usually require support for just over two years.

The numbers can feel overwhelming at first. Private nursing home care now costs over $108,000 each year. That’s enough to make anyone pause and wonder about their future security. But here’s the good news—long-term care insurance offers a way to protect the savings you’ve worked so hard to build. A 55-year-old woman might pay around $1,500 yearly for a policy offering $165,000 in benefits, while men typically pay about $950.

Time matters more than you might think with these decisions. Waiting until you’re 65 could mean paying 50% more in premiums. That’s why, as your financial planner, I want to help you understand if this coverage makes sense for your unique situation. Together, we’ll look at the real costs, explore what matters most in making this choice, and find the right timing to protect your financial future.

Understanding the True Cost of Long-Term Care Insurance

Money talks—especially when it comes to long-term care insurance. Let’s pull back the curtain and look at what this coverage really costs. After all, understanding the true price tag helps you make choices that align with your financial goals.

Average premium costs by age group

Your age plays a huge role in what you’ll pay for coverage. Think of it like this: the earlier you start, the more you save. For a $165,000-benefit policy, a 55-year-old woman pays about $1,500 yearly [1], while a man of the same age pays $950. Married? You’re in luck—couples often get better rates, paying around $2,080 annually when both spouses are 55 ^[1].

Here’s what the numbers look like across different age groups:

Age	Single Male	Single Female	Married Couple
55	$950	$1,500	$2,080
60	$1,175	$1,900	$2,600
65	$1,700	$2,700	$3,750

Hidden fees and potential rate increases

You deserve to know the whole story. That initial premium? It’s just the beginning. Many policyholders see their rates change over time. Recent data paints an interesting picture:

10% to 19% increase affects 29% of policies
20% to 29% increase impacts 31% of policies
40% to 49% increase occurs in 14% of policies [2]

What’s driving these changes? Three main factors tell the story:

Fewer people dropping their policies than expected (31%)
More claims than anticipated (29%)
People needing care longer than predicted (20%) [2]

Cost comparison across different providers

Here’s something you might not expect—prices can vary dramatically between insurance companies. A 55-year-old man might pay anywhere from $1,876 to $3,081 yearly for the same $164,000 worth of coverage ^[3]. This is why shopping around and knowing what might be the right policy for you matters so much.

Different companies structure their policies in unique ways. Some offer sweet spots of savings—like couples’ discounts ranging from 5% to 15% or healthy lifestyle rewards ^[4]. And while inflation protection might bump your premium up by 30-40%, it helps your benefits grow with rising care costs.

Remember, these numbers aren’t just statistics—they’re about protecting your future and maintaining your independence. The right policy at the right price can make all the difference in your long-term financial well-being.

Key Factors That Determine If LTC Insurance Is Worth It

Money decisions feel personal because they are indeed very personal. Your choice about long-term care insurance depends on your unique story—your income and asset level, your family health history, and your future goals. Let’s look at what to look at when making this decision.

Your current financial situation and assets

Here’s something many advisors won’t tell you straight away—long-term care insurance isn’t right for everyone. If you have assets worth less than $30,000, the premiums might actually cost more than the policy’s worth ^[5]. Your premiums should feel comfortable, not crushing—often keeping them under 7% of your income ^[6].

Think about where you stand:

Below $30,000: Medicaid might be your better path
$30,000-$75,000: Take a closer look at your full picture
Above $75,000: You’re likely in the sweet spot for LTC insurance ^[6]

Family health history and risk factors

Let’s be honest—our family trees tell important stories about our future. The numbers speak clearly: 52% of people who reach 65 will need long-term care ^[7]. And here’s something that hits close to home for us women—we’re more likely to need care (52%) than men (42%) ^[7].

Alternative funding options available

Before you decide on long-term care insurance, you should know all your options. Right now, Medicaid covers 42.1% of long-term care services in our country ^[7]. But there’s a catch—you’ll need to spend down to about $2,000 in assets to qualify, though your spouse can keep up to $148,620 as of 2023 ^[8].

What about paying from your own pocket? If you’ve built substantial savings, self-funding might work. Here’s what to weigh:

Factor	Consideration
Asset Level	Higher assets give you more choices
Risk Tolerance	How comfortable are you with big unexpected expenses?
Legacy Goals	What do you want to leave for your loved ones?

Your choice needs to feel right for today and tomorrow. Remember, 64% of people don’t need care until after 80 ^[5], but planning ahead puts you in control. What matters most is creating a strategy that makes you and your family feel confident about your financial future without compromising the quality of life.

When Is the Best Time to Buy Long-Term Care Insurance

Time isn’t just money when it comes to long-term care insurance—it’s about having comfort for life’s unexpected moments. You might think waiting until retirement makes sense, but your future self will thank you for looking at this decision differently.

Age considerations and premium impacts

The numbers tell a powerful story about timing. Each birthday brings steeper costs for the same coverage:

Ages 50-59: 2-4% increase per year
Ages 60-69: 6-8% increase per year ^[9]

Picture this reality: a 65-year-old man pays $3,135 yearly for coverage that would have cost just $2,075 at age 55—that’s 51% more ^[10]. For women like us, waiting until 65 means paying 43% more than at age 55 ^[10]. Those aren’t just numbers—they’re your hard-earned dollars.

Health qualification requirements

Your health today opens doors that might close tomorrow. The approval rates paint a clear picture:

Age Group	Declined for Coverage
Ages 50-59	14%
Ages 60-69	23%
Ages 70+	Nearly 50%

Life stage timing strategies

Your mid-50s often represent the sweet spot for purchasing coverage ^[9]. Why? The math works in your favor:

Health Discount Eligibility
- Ages 40-49: 62% qualify for good health discounts
- Ages 50-59: 46% qualify
- Ages 60-69: 38% qualify^[11]
Premium Lock-in Benefits Think about this advantage: buying at 55 with $172,600 in benefits grows to $276,000 by age 65. Wait until 65? You’re looking at $3,275 yearly for that same coverage—if you qualify ^[11].

Waiting until retirement might feel comfortable now, but it could close doors you didn’t even know existed. While most of us won’t need care until our 70s or 80s, managing your future with confidence starts with the choices you make today ^[9]. What would feel better: knowing you’re prepared, or hoping everything works out?

Common Misconceptions About Long-Term Care Insurance

Let’s talk about the stories we tell ourselves about long-term care insurance. Sometimes these beliefs feel comforting, but they might leave you vulnerable when you need protection most.

Medicare coverage myths

Here’s a reality check that might surprise you—Medicare won’t be your safety net for long-term care. You’re not alone if this catches you off guard. 56% of middle-income Baby Boomers believe Medicare will cover their ongoing care needs ^[12]. The truth often comes as a shock when they discover what Medicare actually covers.

Let me show you what different types of coverage look like:

Type of Care	Medicare Coverage	Long-Term Care Insurance Coverage
Custodial Care	No	Yes
Home Health Aid	Limited	Yes
Nursing Home	Only first 100 days	Yes

The ‘self-insurance’ fallacy

“I’ll just save for it myself”—I hear this often in my practice. It sounds logical, but let’s look at what you’re really facing:

70% of people age 65 or over will need long-term care services ^[13]
A semi-private room in a nursing facility costs $108,259 yearly ^[14]
23% of family caregivers end up in debt caring for loved ones ^[15]

Premium increase concerns

You might worry about premium increases—and yes, they happen. Recent patterns show:

5% to 9% increases affect 6% of policies ^[2]
10% to 19% increases impact 29% of policies ^[2]
20% to 29% increases occur in 31% of policies ^[2]

What drives these changes? Three main factors tell the story:

Fewer people dropping policies than expected (31%) ^[2]
More claims than predicted (29%) ^[2]
People needing care longer than anticipated (20%) ^[2]

Here’s some good news—newer policies come with stronger safeguards. Policies issued in 2014 have just one-quarter the risk of rate increases compared to those from 2000 ^[16].

Think about this: without coverage, your family might shoulder the burden. Already, 78% of family caregivers spend $7,000 yearly from their own pockets ^[15]. What would that mean for your loved ones?

Making the Final Decision: A Financial Planner’s Framework

Let’s get real about making this decision. After years of helping women like you plan for their future, I’ve developed a framework that cuts through the complexity. What matters most? Your unique story, your goals, and your comfort.

Risk assessment checklist

Before you decide, take a moment to consider these key pieces of your story:

Family history – do you come from a family of long-lived individuals? This might mean a higher chance of needing care ^[17]
Your nest egg – policies make more sense if you have assets between $75,000 and $2,000,000 ^[4]
Health picture – good health today opens more doors for coverage tomorrow ^[18]
Marriage status – couples have special opportunities for shared benefits that could save money ^[18]

Budget impact analysis

Money talks—but it should whisper, not shout. Here’s how to think about the costs:

Income Level	Premium Guideline	Recommendation
Under $30,000	Not recommended	Self-insurance may be impractical
$30,000-$75,000	Max 7% of income	Evaluate carefully ^[4]
Over $75,000	Within affordability	Most likely to benefit ^[4]

Here’s something you need to know: premium increases affect 70-80% of policyholders ^[6]. Think about whether your budget can handle higher payments down the road.

Long-term financial planning integration

Your long-term care decision doesn’t exist in a vacuum—it’s part of your bigger financial picture. Let’s look at how everything fits together:

Retirement Planning Alignment
- Will these premiums fit comfortably in your retirement budget?
- How might this affect your investment strategy?
- What’s the trade-off between self-funding and insurance? ^[4]
Asset Protection Strategy
- Do your assets need this extra layer of protection?
- Have you considered partnership policies that protect assets equal to benefits paid? ^[18]
- What are your legacy dreams for your family?
Tax Considerations
- Could qualified policies offer tax advantages?
- Might your health savings account help with premiums? ^[6]
- What tax benefits does your state offer? ^[18]

Your situation is unique. If you’ve built assets between $750,000 and $2,000,000, this insurance might be more about protecting your spouse’s future or leaving a legacy. But if your net worth sits below $250,000, we need to carefully weigh the impact of premiums on your current lifestyle ^[4].

Remember, for married couples, shared care options can stretch your benefits further by allowing transfers between spouses ^[18].

What matters most? Finding a solution that lets you sleep well at night, knowing you’ve protected yourself and your loved ones.

Conclusion

What does peace of mind look like to you? For many women, it means knowing their future care needs won’t burden their family or drain the savings they’ve worked so hard to build. Long-term care insurance represents more than just another financial product—it’s about protecting your financial future and your family’s well-being.

The numbers tell us a clear story. Nursing facility care averaging $108,259 yearly can quickly drain even substantial savings. While self-funding might feel like a simpler choice today, tomorrow’s reality could look very different.

Your mid-50s offer that sweet spot—the best balance of affordable premiums and qualifying probability. But this isn’t just about timing. It’s about understanding your unique situation including your assets, your health history, and those retirement dreams you hold close to your heart.

Don’t leave your future care to chance or assume Medicare will step in when you need it most. The framework we’ve explored together helps light the path forward. Ready to take the next step? Let’s talk. Book a complimentary call with us to create a care strategy that protects everything you value.

Remember, this decision isn’t just about numbers—it’s about maintaining control over your future and protecting the lifestyle you deserve. The choices you make today shape the story you’ll tell tomorrow. What chapter would you like to write?

References

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

Guarantees are based on the claims paying ability of the issuing company.