Understanding the Basics of Long-Term Care Insurance

Man with nurse

By Nathaniel McKissick

No one likes getting old, it’s true. Unfortunately, it’s a fact of life, and about as certain as taxation. According to the Administration on Aging, 70% of people 65 or older will require long-term care in some capacity.[1] This care can be day care or an assisted living facility.

So, what is long-term care insurance? What does it cover? When is the best time to purchase a policy? How do you select a policy? Continue reading below to gain insight into all of these questions and more.

What is long-term care?

For starters, let’s talk about long-term care. The National Institute on Aging defines long-term care as a variety of health and personal care services for older adults.[2] These services help them live safely and independently after they reach an age where they are unable to perform everyday activities autonomously.

As we get older, our likelihood of needing long-term care increases. Commonly, older adults begin using nursing home care around the age of 85. Women tend to live an average of five years longer than men, meaning they need long-term care more often than them as well.[3]

Assisted living communities help with activities of daily living and provide restaurant-style dining options and apartment-style living options for residents. Nursing homes, on the other hand, provide extensive, around-the-clock medical care, meal assistance, and private or shared rooms for residents. Adult day care or respite is what it sounds like. They act as centers for older adults to receive care and companionship or supervision during the day.

How much does long-term care cost?

Long-term care can be expensive. In Colorado, the average cost of in-home care, assisted living facilities, and nursing homes are all higher than the national average. Nationally, the average cost of a private room in a nursing home facility is $108,405. A semi-private room runs around $94,900. In Colorado, a private room averages 116,709, and a semi-private one goes for $102,810.[4]

Assisted living facilities, adult day care, or in-home part-time care can be cheaper, but for those with psychological impairments like Alzheimer’s or Dementia, this isn’t a realistic option.

What is long-term care insurance and what does it cover?

Long-term care insurance works like this: you pay premiums every month now, so that if you require long-term care later, what you’ve paid will cover part or all of your care. Long-term care insurance isn’t like traditional health insurance. Typically, health insurance policies won’t cover the things long-term care insurance will.

Long-term care insurance reimburses policyholders for services to assist them with the activities of daily living or care in their own home, an assisted living facility, or a nursing home.

The cost of your policy depends on a few factors like your health, your age at date of policy purchase, the maximum amount of your policy, and other optional benefits.[5]

When should I purchase long-term care insurance?

What’s the perfect age to start looking into buying long-term care insurance? Long-term care insurance premiums are cheaper at a younger age, so many believe the best time to buy a policy is in their late forties or early fifties.

But if most Americans don’t make use of long-term care until they’re in their eighties, you could be paying premiums for decades. According to AARP, the best time to start shopping for a policy is between the ages of 60 and 65.

Waiting too long can be consequential as well, too, though. Premiums for a 70-year-old were nearly double that of a 60-year-old.[6]

How do I select a long-term care insurance policy?

To get started in purchasing long-term care insurance, it helps to outline a few things. For starters, you should know how much you can afford. The average cost of an annual long-term care policy is $1,400 for a 65-year-old man and $2,100 for a 65-year-old woman.[7]

From there, shop for quotes from different companies.

Understanding long-term care and long-term care insurance can help ensure you’re prepared for changes in your Golden Years. For more information, please visit AARP’s page on long-term care (www.aarp.org/caregiving/long-term-care/) or the Administration on Aging’s resources at long-term care (www.LongTermcare.gov).



Nathaniel McKissick is a non-registered representative of Cetera Networks LLC. The opinions contained in this material are those of the author, and not a recommendation or solicitation to buy or sell investment products. This information is from sources believed to be reputable, but Cetera Advisor Networks LLC cannot guarantee or represent that it is accurate or complete.

[1] “How Much Care Will You Need?” Administration for Community Living, n.d., https://acl.gov/ltc/basic-needs/how-much-care-will-you-need. Accessed 30 Oct. 2023.

[2] “What Is Long-Term Care?” National Institute on Aging, n.d., https://www.nia.nih.gov/health/what-long-term-care. Accessed 30 Oct. 2023.

[3] Shmerling, Robert H. “Why men often die earlier than women.” Harvard Health Publishing, 22 Jun. 2022, https://www.health.harvard.edu/blog/why-men-often-die-earlier-than-women-201602199137. Accessed 30 Oct. 2023

[4] “Cost of Care Survey.” Genworth, n.d., https://www.genworth.com/aging-and-you/finances/cost-of-care.html/. Accessed 30 Oct. 2023.

[5] “What is Long-Term Care Insurance?” Administration for Community Living, n.d. https://acl.gov/ltc/costs-and-who-pays/what-is-long-term-care-insurance. Accessed 30 Oct. 2023.

[6] Shell, Adam. “Buy Long-Term Care Insurance at the Right Age to Get the Best Value.” AARP, 01 May 2020. https://www.aarp.org/caregiving/financial-legal/info-2019/when-to-buy-long-term-care-insurance.html. Accessed 30 Oct. 2023.

[7] Nazario, Brunilda. “How to Choose Long-Term Care Insurance.” WebMD, 16 Mar. 2021. https://www.webmd.com/healthy-aging/features/long-term-care-insurance. Accessed 30 Oct. 2023.

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