The average long-term care insurance policy is now a luxury purchase for many households, and the sticker shock keeps getting worse.
According to the American Association for Long-Term Care Insurance, a 60-year-old couple can expect to pay roughly $3,900 to $4,600 a year combined for a policy with modest benefits.
Wait until 65, and those premiums jump noticeably higher.
Insurers are paying out more claims as the population ages, and low interest rates over the past decade squeezed the investment returns they rely on to fund those payouts.
Several major carriers responded by hiking rates on existing policyholders, sometimes by double digits in a single year.
What you get for the money varies wildly.
A policy that pays $150 a day for in-home care might cover a few hours of a home health aide, while nursing home care in many states now runs $100,000 to $150,000 a year.
That gap is where families get squeezed, because Medicare generally does not cover extended custodial care.
Women pay more than men for identical coverage, since they tend to live longer and file more claims.
Couples who buy together often get a discount, and some employers offer group plans that cost less than individual policies.
Buying younger locks in a lower rate, but it also means paying premiums for decades before you might need the benefit.
There is a cheaper middle path that more families are choosing.
Instead of a traditional policy, some buy hybrid products that combine life insurance with a long-term care rider, so if you never need care, your heirs still get a death benefit.
Others simply self-insure by setting aside money in a dedicated savings account.
Before you sign anything, check the insurer's rate-hike history and financial strength ratings.
Ask whether premiums are guaranteed and what triggers an increase.
Read the elimination period, which is the number of days you pay out of pocket before benefits start, and confirm whether the policy covers home care, assisted living, and nursing homes.
If you already own a policy, do not ignore a rate increase notice.
You usually have options, including reducing your daily benefit, shortening the benefit period, or dropping inflation protection.
Calling the insurer and asking for a written list of alternatives is free and can save thousands over time. **The bottom line:** long-term care coverage is not getting cheaper, and waiting rarely pays off.
Final Thoughts
Run the numbers for your own budget, compare at least three quotes, and decide whether insurance, a hybrid product, or a dedicated savings fund fits your family best.