The average long-term care insurance policy isn't cheap, and it isn't getting cheaper.
According to industry data, a 60-year-old couple shopping today can expect to pay somewhere between $3,000 and $5,000 a year combined for a solid policy — and that's before any rate hikes hit down the road.
Carriers have raised premiums repeatedly over the past decade, citing low interest rates, longer lifespans, and claims that outran their original assumptions.
Some policyholders have seen increases of 50% or more on policies they bought years ago.
Long-term care insurance helps cover things Medicare mostly won't — help with bathing, dressing, eating, and other daily activities, whether at home, in an assisted living facility, or in a nursing home.
Medicare covers skilled nursing for short recovery periods, not months or years of custodial care.
A younger buyer locks in a lower rate but pays for more years.
A couple's policy costs less per person than two individual policies.
A longer benefit period, a bigger daily benefit, and inflation protection all push premiums up.
A policy with a 90-day waiting period and a three-year benefit window will cost far less than one with a five-year window and compound inflation growth.
Genworth's annual cost survey puts a private nursing home room north of $100,000 a year in many states, and assisted living around $60,000.
Medicaid only kicks in after you've spent down most of your assets, and it limits where you can receive care.
That's why some advisors still recommend coverage — but not for everyone.
If you have modest savings, Medicaid may be your realistic path, and a policy could be money down the drain.
If you're wealthy enough to self-fund, you may not need insurance either.
The squeeze hits the middle: people with a house, a retirement account, and a spouse who'd otherwise drain both to pay for care.
What's the daily benefit, and does it have inflation protection?
And what triggers payouts — usually you need help with two of six daily activities or a cognitive impairment.
One alternative worth a look: hybrid policies that combine life insurance with a long-term care rider.
You pay a lump sum or fixed premiums, and if you never need care, your heirs get a death benefit.
They cost more upfront but carry less risk of rate hikes, since the premiums are typically locked.
Also check whether your state offers a Partnership policy, which lets you keep more assets and still qualify for Medicaid after your policy pays out.
Shop at least three carriers, and use a broker who represents multiple companies rather than one.
Rates for identical coverage can vary by 30% or more.
And if a policyholder rate increase lands on you, you usually get options — reduce inflation protection, shorten the benefit period, or pay more.
Never just cancel without weighing those choices.
Our take: long-term care insurance isn't a slam dunk, and the premiums have gotten genuinely painful.
But for a 55-to-65-year-old couple with retirement savings worth protecting, a well-designed policy can still make sense — as long as you're buying for the right reasons and not out of fear.
Final Thoughts
Run the numbers with a fee-only advisor before you sign anything.