The High Costs of Nursing Homes: Why Care Is Becoming Unaffordable for Many and Some Solutions Part 3

Here’s a breakdown of what Long‑Term Care Insurance (LTC insurance) typically costs — and what drives those costs — in the United States today.

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💵 How much does LTC insurance cost?

Costs vary based on your age when you buy the policy, gender, coverage level, and whether the policy includes inflation protection

Here are some recent typical premiums for a common LTC insurance policy (benefit pool: $165,000):

• Age 55: single male — about $950/yr; single female — about $1,500/yr.
• Age 60: single male — about $1,200/yr; single female — about $1,900/yr.
• Age 65: single male — about $1,750/yr; single female — about $2,700/yr.
• For a couple (both 55): roughly $2,080/yr combined.

If the policy includes inflation protection (so benefits grow over time), premiums are higher — sometimes significantly.

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🔎 Why costs vary: What affects your premium

Your LTC insurance premium depends on several factors:

• Age at purchase — younger buyers generally pay less.
• Gender — women tend to pay more because statistically they may live longer and need care longer.
• Coverage amount and benefit pool — larger benefit (e.g. more years of coverage, higher daily/weekly benefit) raises the premium.
• Inflation protection — adds cost but helps maintain benefit value over time.
• Type of care covered — home care, assisted living, nursing home care, etc.; more comprehensive coverage costs more.
• Policy design (waiting periods, benefit limits, riders) — more generous or flexible designs increase premiums.

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⚠️ What LTC insurance covers — and what it doesn’t

• LTC insurance is meant to help cover high costs of long-term care (e.g., nursing home stays, assisted living, at-home care), which — without insurance — can easily be many thousands of dollars per month.
• But having a policy doesn’t guarantee the same dollar-for-dollar coverage for life. Premiums may increase over time, and policies purchased later in life are often much more expensive.
• Also: if you choose a policy with no “inflation protection,” benefits may lose value over decades — even though care costs keep rising.

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🎯 When it makes sense — and when it doesn’t

LTC insurance tends to make more sense if:

• You buy relatively young (50s or early 60s) and are in good health.
• You want to protect your savings and assets in case of long-term care needs later on.
• You want to avoid relying solely on personal savings, family help, or government assistance.

But it may be less attractive if:

• Premiums are high for your age/health (especially if you buy later) and may continue rising.
• You fear you may never need long-term care (so benefits are never used).
• You prefer other strategies: e.g., self-funding, hybrids (life insurance + LTC rider), or relying on family support.

 

To discuss Insurance Based, Asset Based or Medicaid Planning solutions call Frederick Orentlich at Senior Financial Services (800) 679-2858