Why You Need Long-Term Care Insurance Once You Turn 65

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In 2015, 4.5 million individuals in the United States received home health care.1 For an individual turning sixty-five, there’s a seventy percent chance they will need long-term care services during the remaining years of their life.2 Currently, long-term care for older adults and people with disabilities is a critical need within the United State’s health care system. Recently, President Joe Biden put forward a proposal to invest 400 billion dollars into long-term care services over the next eight years.3

This article will help you prepare financially for the future while teaching you about long-term care coverage, the cost of insurance, and how it works.

Like Family Personal Care accepts long-term care insurance at our personal care agency in Southern Utah. We work to pair you with a loving caregiver that is perfect for your needs. Contact us here to learn more.


What Is Long-Term Care Insurance?

While traditional health insurance covers things like annual checkups or outpatient surgeries, long-term care insurance is specifically designed to cover long-term care services and supports. Therefore, long-term care insurance is a policy that is completely focused on personal or custodial care in different settings.4

 Woman buys long term care insurance

What Does Long-Term Care Insurance Cover & How Does It Work?

Long-term care insurance includes things like short-term and long-term home health care, skilled nursing, adult day health care, and more. Individuals can use long-term care insurance to receive assistance with the activities of daily living such as dressing, eating, and bathing.4 Typically, this type of insurance covers benefits in many settings, including your home, adult day service centers, hospice care, respite care, assisted living facilities, memory care facilities, and nursing homes.5

How Long-Term Care Insurance Works

With long-term care insurance, you will generally see benefits described in daily amounts with some form of lifetime maximum. Most long-term care plans pay on a reimbursement basis. For instance, if you have a $200 per day benefit but only spend $150 per day for a long-term care provider in your home, the policy only pays $150. The remaining $50 may go into a pool of unused funds to extend how long your benefits will last.

Other plays operate on an indemnity basis. In the same scenario with an indemnity policy, the plan would pay $200 per day regardless of the daily cost. Another critical policy provision to be aware of is called the elimination period. This refers to how many days you have to pay for care before the policy begins paying out. The industry standard for elimination periods is approximately 90 days.

Long-Term Care Insurance Vs. Medicaid & Other Insurances

First things first, ask yourself, do I have enough money to pay for more than four years of care in a nursing home or assisted living facility? If you’re low-income, you may qualify for Medicaid, which is medical and long-term care funded by the government. Unless you’re pretty confident you will qualify for Medicaid, it’s critical to invest in long-term care insurance. In some states, long-term care insurance provides additional benefits even for people on Medicaid. It’s important to remember, Medicare and private health insurance typically don’t cover custodial care or long-term care.7

How Much Does Long-Term Care Insurance Cost?

Your insurance premium for long-term care coverage depends on the following factors:4

● Your age when you buy the long-term care policy.
● Your health, gender, and marital status.
● The maximum amount the policy pays each day.
● The maximum number of days or years the policy will cover.
● The maximum lifetime amount the policy will pay.
● Optional added benefits such as inflation protection.

Although rates vary significantly, here are the average long-term care insurance rates for fifty-five-year-old individuals with standard health.8

Single Male: $1,700 Per Year
Single Female: $2,675 Per Year
Couple: $3,050 Combined Per Year

Is Long-Term Care Insurance Worth The Cost?

Whether long-term care insurance is worth the cost depends on factors like your age and financial situation. If you’re an older adult that makes too much to qualify for Medicaid and can’t afford to pay for long-term care out of pocket, long-term care insurance may be a good fit for you.7 To help you weigh the costs of insurance and care, here is a breakdown of potential out-of-pocket costs of care:9

● For a semi-private room in a nursing home, the price is about $225 per day.
● For a one-bedroom unit in an assisted living facility, the price is approximately $119 per day.
● For a home health aide, the price is about $20.50 per hour.
● For an adult day health care center, the cost is approximately $68 each day.

The Pros of Long-Term Care Insurance

As you can see, long-term care expenses can add up quickly. For older adults, it’s often a financially sound decision to buy long-term care. If you’re age 65, it’s essential to take a look at your financial situation when comparing insurance premiums versus the cost of care out-of-pocket.7 A significant benefit of long-term care insurance is that it is strategically designed to cover expenses that Medicare or private insurance companies don’t usually cover. For older adults, long-term care insurance can provide a vital safety net and peace of mind.10

Tips for Finding Long-Term Care Insurance

To find long-term care insurance for senior care or adult care, it’s helpful to work with an insurance specialist, state partnership program, or even your employer. For insurance agents or brokers, states regulate which long-term care insurance policies they can sell. State partnership programs are helpful because they can offer extras like inflation protection or asset disregard. Private and public employers also offer group long-term care programs at lower costs.11

What Should I Look for In Long-Term Care Insurance?

When you’re looking at policies, it can be overwhelming trying to figure out precisely what you need to look for. Duration of benefits is the first thing to check. Typically, a policy will pay benefits for anywhere from one to five years. Second, you should check into benefit triggers and what conditions must be met to receive care. For example, there may be a specific number of daily activities that you have to need help with before a policy pays for long-term care. Waiting periods, daily benefit amounts, and maximum policy benefits are also essential details to review.12 The professionals recommend requesting the insurance company’s premium rate history before locking in a plan. This way, you can have a general understanding of how often the company raises its premiums and by how much.4

What’s The Best Age to Buy Long-Term Care Insurance?

At a certain age, insurance companies begin refusing coverage for consumers. For this reason, the ideal age to apply for long-term care insurance is during your mid-50s. You may be wondering how this number is calculated. According to the American Association for Long-Term Care Insurance, once you turn fifty years old, it’s unlikely your health will begin to get better. It’s inevitable; as humans age, health changes. When you are in good health, you can qualify for long-term care insurance with health-related discounts. Statistically, the percentage of individuals eligible for a good health discount declines as a person ages. Premiums are determined mainly by age and health.13

Long-Term Care Insurance Statistics

If you’re still on the fence and deciding whether long-term care insurance is right for you, here are some eye-opening statistics about long-term care:14

● In 2018, 350,000 Americans bought long-term care insurance.
● In 2018, 10.3 billion dollars was paid in long-term care claims.
● Most long-term insurance claims begin at ages 86-90.
● Approximately 50% of all long-term insurance claims started with home care.
● The average age of policy purchasers is 66 years old.


1. https://www.cdc.gov/nchs/fastats/home-health-care.htm
2. https://acl.gov/ltc/basic-needs/how-much-care-will-you-need
3. https://khn.org/news/article/biden-seeks-400-billion-to-buttress-long-term-care-a-look-at-whats-at-stake/
4. https://acl.gov/ltc/costs-and-who-pays/what-is-long-term-care-insurance
5. https://acl.gov/ltc/costs-and-who-pays/what-is-long-term-care-insurance/what-long-term-care-insurance-covers
6. https://www.iii.org/article/what-features-long-term-care-policies-should-i-focus
7. https://www.iii.org/article/should-i-buy-long-term-care-insurance
8. https://www.aaltci.org/long-term-care-insurance-rates/
9. https://acl.gov/ltc/costs-and-who-pays/costs-of-care
10. https://www.assistedliving.org/long-term-care-insurance-benefits-and-advantages/
11. https://acl.gov/ltc/costs-and-who-pays/what-is-long-term-care-insurance/where-to-look-for-long-term-care-insurance
12. https://cahealthadvocates.org/long-term-care/items-to-consider-before-buying-long-term-care-insurance/
13. https://www.aaltci.org/long-term-care-insurance/learning-center/best-age-to-buy-long-term-care-insurance.php
14. https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2019.php#2019costs


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