The price of long-term care coverage keeps rising, and it's hitting older Americans right when they're trying to lock in a plan for retirement.
According to industry data and insurance analysts, new policies for a 60-year-old couple can now run well over $3,000 a year for a modest benefit package.
That's a jump many shoppers didn't see coming.
For a single 60-year-old man, a typical policy with a $165,000 initial benefit pool and 3% compound growth might cost around $1,500 to $2,000 annually, depending on the insurer and health history.
A woman of the same age often pays more, sometimes 20% to 40% higher, because women tend to live longer and file more claims.
Couples can sometimes qualify for a shared-care discount, but the combined bill still stings.
Insurers badly misjudged how long people would live and how much care would cost when they wrote policies decades ago.
Many carriers have since raised rates on existing customers or exited the market entirely.
Today's new policies are priced more conservatively, but that means higher premiums up front for buyers.
There's also the reality of what care actually costs.
A private room in a nursing home averages over $100,000 a year in many states, and in-home care runs $25 to $35 an hour.
Medicare generally doesn't cover long-term custodial care, and Medicaid only kicks in after you've spent down most of your assets.
That gap is exactly what long-term care insurance is meant to fill, which is why demand hasn't disappeared even as prices climb.
If you're shopping, don't just compare premiums.
Look at the benefit trigger, the elimination period, and whether the policy includes inflation protection.
Skipping inflation protection can save money now but leave you with a benefit that barely covers a few months of care in 20 years.
Also ask about shared care riders for couples and whether the insurer has a history of rate hikes.
Some buyers are opting for hybrid policies that combine life insurance with a long-term care benefit.
These often have fixed premiums and a death benefit for heirs if you never need care.
They cost more upfront, but they remove the fear of paying premiums for years and getting nothing back.
Others are self-funding by setting aside money in a dedicated account or health savings account.
Before you sign anything, check whether your state's insurance department has a rate history for the carrier.
A company that has raised rates repeatedly on existing policyholders is a red flag.
And if the premium feels tight now, remember that insurers can often raise it later on traditional policies, so build in some cushion.
The bottom line: long-term care insurance isn't cheap, and it's getting less cheap.
But for many families, the alternative, draining retirement savings to pay for care, is worse.
Run the numbers with a fee-only advisor who doesn't earn a commission on the sale, and decide based on your health, your assets, and what you can truly afford.
Our take: this is one of those costs where waiting rarely pays off, since premiums rise with age and health issues can make you uninsurable.
If you're in your late 50s or early 60s and have some assets to protect, it's worth getting at least one quote this year, even if you decide to pass.
Final Thoughts
Just don't let a salesperson rush you into a policy you don't understand.