Long term care insurance costs should be an integral component of your financial plan. With the likelihood that either you or a loved one may require long-term care in the future – something Medicare doesn’t cover – investing in long-term care policies may save your savings and assets from being depleted for costly care services, or require you to tap retirement accounts early due to costs incurred from this care.
How much your policy costs depends on a variety of factors, including age and health. As you get older, your claim frequency increases – leading to a higher premium if approved at all. Women typically pay higher premiums than men while those suffering from certain medical conditions such as muscular dystrophy or cystic fibrosis may face additional hurdles getting approved – all which impact how much it will cost.
Your policy type can also impact cost. A reimbursement policy, which reimburses actual care costs based on receipts, tends to have lower premiums than an indemnity or cash benefit policy which pays out a set monthly sum regardless of spending. And some policies provide optional features like inflation protection or waiver of premium riders that could add further expenses.
Your location can have an effectful on your premium as long-term care insurance companies must file their products with state insurance departments that each have different regulations and rules regarding filing policies with them.
Purchase later in life can cost more. For instance, purchasing between 55-60 years can increase annual costs by 24% as insurers take into account your increased likelihood of needing long-term care in calculating monthly premiums.
When making the decision about long-term care insurance, be sure to speak to an independent advisor and use a long-term care calculator in order to gain an idea of its potential cost. A good way to start exploring this subject matter would be by visiting multiple carriers’ websites and asking for quotes for policies that meet your criteria.
NerdWallet writers are subject matter experts, drawing from primary, trustworthy sources like peer-reviewed studies, government websites and academic research in their writing. Each writer adheres to high standards of journalism and fact checks are conducted as necessary.
NerdWallet’s team of journalists are passionate about finding you the most appropriate products, services, and advice tailored specifically to your individual needs. If you buy something through one of the links we provide on our site, NerdWallet may receive commission from that sale – learn more about our editorial process here.