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Best Long-Term Care Insurance Companies of January 2024

Jan 2, 2024 at 10:08 PM

Our team has been writing about long-term care insurance for nearly a decade. After extensive research, we’ve determined that Nationwide, Mutual of Omaha and New York Life are among the industry’s best long-term care insurance providers. This analysis is based on customer satisfaction ratings, financial stability and benefit payment options.

Money’s Main Takeaways

Long-term care insurance can protect your assets from the high costs of extended care

The two main long-term care insurance options are traditional and hybrid policies

Only about nine insurers offer traditional long-term care insurance plans

More companies now offer hybrid policies, yet those tend to be more expensive

Our list features traditional and hybrid policies with different disbursement options

Why Trust Us?

Our editors and writers evaluate insurance companies independently, ensuring our content is precise and guided by editorial integrity. Read the full methodology to learn more.

10 insurers reviewed
6 categories scored
25 authoritative sources consulted

Our Top Picks for the Best Long-Term Care Insurance Companies

Nationwide: Best for Policy Customization
Mutual of Omaha: Best for Stand-Alone LTC Insurance
New York Life: Best for Financial Stability
Northwestern Mutual: Best for Couples
GoldenCare Insurance: Best for Comparing Multiple Providers

Best Long-Term Care Insurance Reviews

Pros

Offers universal and variable universal life insurance policies with an LTC rider
Provides inflation protection riders and flexible payment schedules
Hybrid policies pay cash benefits
Unlicensed caregivers permitted

Cons

No stand-alone long-term care policies
Policy with shared pool of benefits not available in NY or CA
LTC rider isn't available in Montana or U.S. territories

Why we chose it: We chose Nationwide as the best long-term care insurer for policy customization because its CareMatters® II plan is one of the best hybrid policies available. Its numerous terms and customizable design make it stand out from its competitors.

CareMatters® II is a flexible hybrid policy tied to a fixed-premium universal life insurance plan that will pay out a guaranteed minimum death benefit — even if you receive long-term care. Unlike other LTC policies, which require you to pay out of pocket and submit a claim for reimbursement, CareMatters® II pays cash benefits, so you can avoid all the monthly paperwork.

Couples looking for long-term care coverage can opt for Nationwide’s CareMatters Together℠ plan, which offers a shared pool of benefits that can be used by either spouse or partner. For example, if a couple buys a policy with 6 years of shared benefits and one spouse needs care for one year, the other spouse would still have five years of coverage remaining.

Regardless of which of these products you choose, you have the option of funding the policy through a one-time payment or monthly or annual payment for five years, 10 years or up to a specified age. Benefit period options range from two to seven years. As an alternative to LTC insurance policies, Nationwide also offers an LTC rider that can be added to some of its life insurance policies.

Nationwide is one of the largest insurers in the United States and was ranked second best for customer satisfaction in J.D. Power’s 2023 U.S. Life Insurance Study. Additionally, the National Association of Insurance Commissioners (NAIC) reports the company has a low complaint index.

Read Nationwide Long-term Care Insurance Review

HIGHLIGHTS

AM BEST RATING: A+ (Superior)

J.D. Power Rating: 840/1000

Issue Ages: 40-75 (as of last birthday)

Benefit Amount: $2,500 to $20,833 per month

Benefit Period: 2-7 years

Elimination Period: 90 calendar days

Pros

Offers three types of discounts to policyholders
LTC policies include care coordination services
Option to change your preferred benefit payment method
Several optional benefits available, including return of premium and inflation protection

Cons

Couples discount is only available if married or living together for 3 years
Premiums are likely to increase over time

Why we chose it: Mutual of Omaha is our choice for the best long-term care insurer for stand-alone LTC policies because it’s one of just six companies currently offering stand-alone long-term care plans. Moreover, its higher-tiered policy is highly customizable, even allowing policyholders to choose between cash benefits and reimbursement.

Mutual of Omaha offers two stand-alone long-term care plans, MutualCare Custom Solution and MutualCare Secure Solution. These include:

The two stand-alone policy options are MutualCare Custom Solution and MutualCare Secure Solution, which include:

Monthly benefits from $1,500 to $10,000

Home care benefits like caregiver training, durable medical equipment, home modification and more

International benefits for up to 12 months

Alternate care benefit when the policyholder uses care coordination

Bed reservation benefit and covers hospice and respite care

Optional benefits such as inflation protection, return of premium, shared care, waiver of elimination period and nonforfeiture

While both policies are relatively similar, MutualCare Custom Solution allows for greater customization. For example, policyholders can choose whether to get cash benefits or opt for a reimbursement-based structure.

And while Mutual Care Secure Solution offers coverage for 24, 36, 48, or 60 months and elimination period options between 90, 180 and 365 calendar days, Mutual Care Custom Solution provides greater flexibility through a pool of dollars that can go from $50,000 to $500,000 in $500 increments and even more elimination period options (0, 30, 60, 90, 180 or 365). Plus, survivorship and joint waiver of premium add-ons are only available with the custom plan.

Mutual of Omaha offers stackable discounts that could translate into considerable savings if you qualify for more than one. For example, if you qualify for the 15% insured couple’s discount or the 5% discount for married customers, you could get an additional 15% off your policy for being in good health.

Mutual of Omaha also earns consistently high customer satisfaction ratings. It ranked third in J.D. Power’s 2023 U.S. Life Insurance Study and has a solid A+ financial strength rating from AM Best.

Read Mutual of Omaha Long-Term Care Insurance Review

HIGHLIGHTS

AM Best Rating: A+ (Superior)

J.D. Power Rating: 805/1000

Issue Ages: 25-79 for traditional policies and 30-79 (75 in NY) for Asset Flex

Benefit Amount: $1,500-$10,000 per month

Benefit Period: 2-5 years

Elimination Period: 0, 30, 60, 90, 180 or 365 calendar days

Pros

Some policies can cover 100% of care costs
Premiums on stand-alone policies are guaranteed for the first three years
Offers a return of premium on linked-benefit policies
New York Life Secure Care and New York Life My Care are eligible for dividends

Cons

Benefit period options and covered benefits may vary by state
No online quotes are available at this time
Asset Flex is not eligible for dividends

Why we chose it: We chose New York Life as the best long-term care insurance company for financial stability because policyholders don’t have to worry about its ability to pay claims. The company has superior financial strength ratings from AM Best (A++), Fitch (AAA), Moody’s (Aaa) and S&P (AA+). It also ranks above the industry average in J.D. Power’s 2023 U.S. Individual Life Insurance Study.

It also ranks above the industry average in J.D. Power’s 2022 U.S. Individual Life Insurance Study.

New York Life offers two stand-alone long-term care insurance options, New York Life My Care and New York Life Secure Care. Here’s how they compare:

	NYL My Care	NYL Secure Care
Coverage amounts	$1,500-$12,000 per month OR $50,000-$500,000 per lifetime	$50-$400 per day OR $36,500-$1,022,000 per lifetime
Max reimbursement rate	80% of all eligible charges	100% up to the daily maximum ($400)
Benefit period options	Depend on the reimbursement rate and policy lifetime max -- plus four pre-designed plans available	2, 3, 5 or 7
Waiting period	None -- a one-time annual deductible	90, 185 or 365 days
Deductible	$4,500 to $144,000	None
Dividend eligibility	Yes	Yes
Discounts	Couples discount (up to 25%)	Couples discount (up to 25%)
Riders	Shared pool, inflation protection, nonforfeiture	Shared pool, inflation protection, nonforfeiture, partner's benefit, legacy benefit
Other features	Return of premium up to age 65, waiver of premium, international coverage, in-home support equipment coverage	Restoration of benefits, waiver of premium, international coverage, in-home support equipment coverage

New York Life My Care is structured to resemble a health insurance policy. That means it carries a one-time annual deductible and can reimburse policyholders for up to 80% of eligible LTC expenses. New York Life Secure Care, on the other hand, resembles other traditional policies in that it features a waiting period as opposed to a deductible. This policy also includes features such as return of premiums and restoration of benefits.

Lastly, Asset Flex is a linked benefit policy that offers a maximum life insurance benefit of $750,000 and long-term care benefits that go up to $1,750,000. The policy features a 90-day elimination period that can be waived completely for home care if the policyholder creates a personalized care plan with a New York life specialist. Asset Flex policies are not eligible for dividend payments.

Inflation protection options are available on all three plans, as is a nonforfeiture benefit that allows policyholders to continue receiving a reduced benefit amount if they don’t renew their policy after the third policy year. A couples discount is also available on all plans.

Read New York Life Long-Term Care Insurance Review

HIGHLIGHTS

AM Best Rating: A++ (Superior)

J.D. Power Score: 794/1000

Issue Ages: 30-75

Benefit Amount: $1,500-$7,000 per month

Benefit Period: 2, 3, 5 or 7 years

Elimination Period: 90 calendar days (0 for home care under Asset Flex)

Pros

Generous spousal or companion discount of up to 30% (if both are approved)
Option to waive premiums once you need care, even if you're not receiving benefits yet
Long-term care policies are "participating" policies eligible for dividends
Up to 20% of the maximum monthly benefit can be used for caregiver education and training

Cons

No online quotes available at this time
Only two benefit periods: three or six years
Covers care services rendered only by plan-approved providers

Why we chose it: We chose Northwestern Mutual as the best long-term care insurance company for couples because it offers a higher-than-average spousal discount of up to 30% if both individuals are approved for coverage and 10% if only one qualifies. Companion relationships of two or more years also qualify — even if they’re family — provided both partners are of the same generation and plan to continue living together in the future.

Northwestern Mutual‘s traditional LTC insurance policy, QuietCare, can be paired with a survivorship benefit rider that allows surviving partners to be exempt from future premium payments after the death of their spouse. To qualify, both spouses would have to be enrolled in a QuietCare policy with this rider. The plan’s maximum monthly benefit can range from $1,500 to $12,000 in $100 increments. You can also choose between four elimination period options: six, 12, 25 or 52 weeks.

One major drawback of this policy is that it will only cover services offered by providers approved by the plan, and not all approved care providers are certified in every state. However, reinstating your QuietCare policy is easy. Lapsed policies can be reinstated within a year if past-due premiums are paid. For those with a cognitive impairment, reinstatement is possible within just five months.

Northwestern Mutual holds superior financial strength ratings from all major credit rating agencies. It also has a remarkably low complaint index for long-term care policies and ranks above the industry average in J.D. Power’s 2023 U.S. Individual Life Insurance Study.

Read Northwestern Mutual Long-Term Care Insurance Review

HIGHLIGHTS

AM Best Rating: A++ (Superior)

J.D. Power Score: 790/1000

Issue Ages: 18-79

Benefit Amount: $1,500 - $12,000 per month in $100 increments

Benefit Period: 3 or 6 years

Elimination Period: 6, 12, 25 or 52 weeks

Pros

Shop and compare multiple long-term care providers
Specializes in critical care, life and long-term care hybrid policies, life insurance and annuities
Partners with multiple LTC providers

Cons

No online long-term care insurance quotes
The company is an insurance broker, not a carrier

Why we chose it: We chose GoldenCare as the best long-term care insurance option for comparing multiple providers because it partners with 18 well-known insurance carriers to help match customers with companies that can meet their needs. You can get multiple quotes in one place, and a Golden Care agent can guide you through the process.

As an online insurance broker, GoldenCare partners with some of the most prominent long-term care insurance providers. The company currently works with 18 insurers (some of which are among our top picks), including Mutual of Omaha, Transamerica, Aetna, Thrivent, Securian Financial, OneAmerica and National Guardian Life Insurance Company.

GoldenCare matches clients with a long-term care specialist who will work on their care plan and recommend the insurer that best aligns with their situation. It also offers various insurance products for Medicare clients.

For those who don’t qualify for long-term care insurance because of a pre-existing condition, GoldenCare offers critical illness insurance policies. These policies may cover loss of income, co-pays, rehabilitation, travel, lodging, home modifications and medical equipment such as wheelchairs and portable oxygen.

Read GoldenCare Long-Term Care Insurance Review

HIGHLIGHTS

AM Best Rating: N/A

J.D. Power Score: N/A

Issue Ages: Vary by company

Benefit Amount: Varies by company

Benefit Period: Varies by company

Elimination Period: Varies by company

Other long-term care insurance companies we considered

While the following carriers didn’t make our list of top long-term care insurance companies, they offer LTC coverage and with attractive features.

OneAmerica (State Life Insurance Company)

Pros

Sells hybrid life insurance and annuity plans with LTC benefits
Policies underwritten by State Life Insurance Company
Get LTC benefits for a limited period or opt for guaranteed lifetime benefits

Cons

No stand-alone LTC policies are available
High complaint ratio
Low financial strength ratings

OneAmerica is a financial services and mutual insurance company specializing in life insurance and annuity products. It offers hybrid life insurance policies and annuity plans with LTC benefits. It didn’t make our list because of its relatively high NAIC complaint ratio and low financial strength ratings.

Read OneAmerica Long-Term Care Insurance Review

Brighthouse Financial

Pros

Guaranteed death benefit and terminal illness benefit
Cash indemnity plan pays out base benefit regardless of the actual expense amount
Coverage up to $1,000,000 or more

Cons

No stand-alone LTC policies are available
Low customer satisfaction ratings

Brighthouse Financial is an insurance company specializing in annuities and life insurance policies. It sells an indexed universal life insurance policy called SmartCare that provides long-term care benefits through riders; it does not sell stand-alone LTC policies. Brighthouse Financial’s limited selection of long-term care products, below-average customer satisfaction score, relatively low AM Best rating and high NAIC complaint ratio disqualified it from our main list.

Lincoln Financial Long-Term Insurance

Pros

Benefits are available internationally
Two inflation protection options: simple (3%) or compound (3% or 5%)
Includes care coordination services

Cons

Product features and benefits may vary by state

Lincoln Financial offers two hybrid life and long-term care insurance policies with unusually high maximum issue ages (up 80 years of age). However, the applicant must be in good health and meet other underwriting criteria (which may include income or asset requirements). Despite its attractive product offerings and great financial strength ratings, Lincoln Financial’s score on the latest J.D. Power U.S. Life Insurance Study was 764/1000, ten points below the industry average.

Read Lincoln Financial Long-Term Care Insurance Review

Transamerica

Pros

Offers an LTC insurance rider for some of its universal life policies
Multiple riders available to customize its life insurance policies

Cons

No longer issues new long-term care insurance policies
LTC rider not available with all life insurance products
No online claims filing
Low J.D. Power Score

Transamerica is a financially stable insurer offering a great selection of life insurance policies and riders. However, its low J.D. Power score and high NAIC complaint ratio kept it out of our top picks. Moreover, it no longer issues long-term care insurance policies, and its LTC rider cannot be added to all of its life insurance products.

Read Transamerica Long-Term Care Insurance Review

California Long Term Care Insurance Services (CLTC)

Pros

Works with different carriers
Offers critical illness insurance, annuities and life insurance with LTC riders

Cons

Plan information on the site is lacking

California Long Term Care Insurance Services, also known as CLTC Insurance Services, is an independent insurance brokerage that specializes in selling long-term care insurance and related products in the state of California. Since CLTC’s services are limited to one state, it did not make our main list.

National Guardian Life (NGL)

Pros

Includes international benefits and emergency response system coverage
Joint pricing structure allows couples to share a policy and premium
Offers inflation protection and two return of premium riders
Shared benefit amount rider allows couples to access a third pool of money for care

Cons

Low daily benefit amount ($50 to $300)
Only two benefit period options, unless you purchase a rider
Waiver of premium only available when comprehensive benefits are selected
Not rated by J.D. Power

National Guardian Life offers a traditional long-term care insurance policy called EssentialLTC. The product includes unique built-in benefits such as international coverage for a maximum of 30 days per calendar year, caregiver training benefits and care coordination. It also covers respite care, bed reservations and emergency response systems and offers contingent benefits in the event of a policy lapse.

However, the plan’s daily benefit maximums are low compared to other plans on our main list — between $50 and $300 — and prospective policyholders only get two benefit period options, two or three years, unless they purchase a benefit period extension rider. Policy details also suggest that the option to waive premium payment while receiving benefits is only available to those who purchase comprehensive coverage.

Long-Term Care Insurance Guide

According to the Administration of Community Living (ACL), a branch of the U.S. Department of Health and Human Services, most people over 65 will require long-term care sometime in their lives. This statistic is especially relevant to women, as they tend to outlive men by about five years and are more likely to require care for longer.

Despite these statistics, long-term care insurance isn’t as widely known as other types of insurance. Keep reading to understand how long-term care insurance works, how much it costs and what services are eligible for coverage.

What is long-term care insurance?

Long-term care insurance is a type of policy that can help you cover the costs of extended care, whether it takes place at home, in a nursing home, assisted living facility or adult daycare center. Generally, coverage under long-term care policies begins once you’re diagnosed with cognitive impairment or can’t perform two or more Activities of Daily Living (ADL) without assistance. These include:

Bathing
Eating
Dressing
Walking
Toileting (using the bathroom)
Transfering (e.g., from chair to bed)

How does long-term care insurance work?

Long-term care insurance works similarly to health insurance in that you pay a lump sum or monthly premium and the policy will cover qualifying expenses once you require care. However, unlike most health insurance policies, LTC policies are intended to cover custodial or skilled nursing care for a year or more.

A healthcare provider must prescribe long-term care assistance for your insurance policy to cover the services.

Here are some points about how long-term care insurance works:

Coverage: It pays for assisted living or nursing facilities or in-home care.

Benefits: Benefits commence when you have a cognitive impairment or can’t perform two or more of the six activities of daily living (ADL).

Disbursement: Companies pay benefits to cover the cost of long-term services either daily, weekly or monthly.

Premium: The cost of a policy depends on many factors, but average monthly premiums are $75 per month.

What LTC insurance covers

Again, long-term care insurance policies cover the following types of care:

Custodial care: Refers to assistance with daily living activities such as bathing, dressing and eating. The caregiver doesn’t need to be licensed

Skilled nursing: Defined as care provided by a licensed medical professional such as a registered nurse (RN).

Despite popular belief, this care can take place in a variety of settings, whether that’s an assisted living facility, nursing home or your own home.

Jesse Slome, Director of the American Association for Long-Term Care Insurance, says “There are a lot of misconceptions about long-term care because it started as a product that primarily only paid for nursing home care, and that’s the scariest proposition out there. But most people don’t and won’t need nursing home care, or they might for only a short period of time towards the very end.”

He adds that the kind of care most of us will require is custodial care for things like getting up and about our own home. And that’s the reason you get long-term care insurance, to pay for services you would otherwise convince yourself you can do without.

LTC policies may also cover specialized services, such as:

Hospice care

Respite care

Alzheimer’s and dementia care

Family member training, medical equipment and home modifications

Keep in mind, however, that your policy may include restrictions on how long you can be covered for these specialized services or set limits on how much of your benefit can go toward them. Policies may also impose restrictions with regard to family caregiving, limiting coverage to a maximum of one year. Nevertheless, some insurers may allow exceptions in extraordinary circumstances (such as a global pandemic).

What LTC insurance doesn’t cover

While long-term care insurance covers the cost of nursing and custodial care provided in a variety of settings, policies have some notable exclusions. These may vary by policy but generally include:

Treatment of mental illnesses, not including Alzheimer’s Disease or senile dementia

Self-inflicted injuries or conditions resulting from alcoholism or drug addiction

Care in government nursing facilities

Coverage outside the U.S. — yet some policies offer international benefits for a limited time, typically 12 months

Extended care provided by family members, except in extraordinary circumstances

Types of long-term care insurance

There are two main kinds of LTC insurance policies: stand-alone and hybrid. Understanding the differences between these policies can help you make the right decisions for you and your loved ones.

Traditional long-term care insurance policies

Traditional long-term care insurance policies, also known as stand-alone LTC insurance, can reimburse you for some of the cost of the care you receive at home, at a nursing home or in a residential care facility.

Generally, stand-alone long-term care insurance policies provide a daily, weekly or monthly benefit amount paid out during a predetermined benefit period that typically ranges from two to five years. Plan disburses the benefits after an elimination period ranging from 0 to 365 calendar days, depending on the plan.

You may add riders to your LTC policy that increase or modify coverage. For example, a popular rider for long-term care coverage is inflation protection, which keeps your benefit from losing value as the cost of living increases.

Hybrid long-term care insurance policies

Hybrid long-term care policies, also known as linked-benefit policies, typically combine two types of coverage: a life insurance policy or a qualifying annuity and a long-term care rider.

The advantages of a hybrid or linked-benefit policy include:

A guaranteed death benefit amount that goes to your beneficiaries, regardless of whether you use long-term care benefits.

Premium payments that are guaranteed to remain the same over the life of the policy.

Potentially less stringent underwriting and lower pricing for women (a medical exam is still required, though).

Surrender clauses that let you access the cash value the policy has accumulated over time.

The possibility of being refunded a portion of the premiums you paid — if you purchased a return of premium rider.

But hybrid long-term care insurance policies also have drawbacks, at least for some:

Premiums for hybrid policies can be much higher than for stand-alone LTC insurance.

Buying life insurance later in life is much more expensive than buying when you’re younger and healthier.

According to Slome, “a traditional long-term care insurance policy is always going to get you the most financial bang for your buck because it’s only doing one thing. People like [the hybrid policy], or they like the concept, because they’re being told ‘If you don’t use this policy, you get a death benefit.’ Well, the question you have to ask yourself is, ‘Do I want or need a death benefit 15-20 years from now?’ because you’re not getting it for free.”

Ultimately, the choice to purchase a stand-alone policy or a hybrid one will depend on your personal and financial goals. An insurance agent can guide you toward the best life insurance option for your long-term care needs.

Pros and cons of long-term care insurance

Pros

Protect your assets and savings against the high costs of long-term care
Most policies allow for flexibility in care options
Provide peace of mind knowing you'll be cared for later in life

Cons

Premiums are generally high
Some policies have "use it or lose it" benefits
All policies have exclusions and limitations

How much is long-term care insurance?

The cost of long-term care insurance can be very high, depending on your circumstances. Cost-determining factors include your age, health status, the type of coverage you need and whether you buy a policy with level benefits or inflation protection.

According to the 2023 Long-Term Care Insurance Price Index published by the American Association for Long-Term Care Insurance (AALTCI), the monthly premium for a policy with $165,000 in level benefits could range between $75 and $225. And policyholders who want their long-term care insurance benefits to grow annually and keep up with inflation should expect to pay twice as much.

Annual long-term care Insurance costs

Issue Age	$165,000 in level benefits	With 1% yearly increase	With 2% yearly increase	With 3% yearly increase	Wtih 5% yearly increase
55-year-old male	$900	$1,295	$ 1,650	$2,100	$3,500
55-year-old female	$1,500	$2,100	$2,725	$3,600	$6,200
55-year-old couple	$2,080 (combined)	$3,000 (combined)	$3,870 (combined)	$5,025 (combined)	$8,575 (combined)
60-year-old male	$1,200	$1,200	$2,060	$2,060	$3,820
60-year-old female	$1,960	$2,650	$3,325	$4,450	$6,800
60-year-old couple	$2,550 (combined)	$3,425 (combined)	$4,425 (combined)	$5,670 (combined)	$8,550 (combined)
Source: American Association for Long-Term Care Insurance

The age at which you enroll is crucial in determining policy costs. A single man purchasing a plan with $165,000 in level benefits could expect to pay $900 annually at age 55. At age 65, he could expect to pay $1,700 per year for the same policy. That’s a whopping 89% premium increase.

The age at which you apply for coverage will also affect your eligibility. As you get older, your chances of qualifying for coverage decrease. And if you already require assistance with activities of daily living, have dementia or a chronic or critical illness, your application will likely be denied.

Applicant age group	Percentage of applications denied
40 to 49	12.4%
50 to 59	20.4%
60 to 64	30.2%
65 to 65	47.2%
Source: American Association for Long-Term Care Insurance

Average costs of long-term care services

Long-term care costs increase annually. National Health Expenditure Data from the Centers for Medicare & Medicaid Services reveals the average cost of assisted living facilities is projected to grow at a rate of 4.7% annually until 2030. Home health care costs are expected to increase at an even higher rate — 7% each year, on average.

According to Genworth’s Cost of Care Survey, homemaker services cost an average of $163 per day, while home health aide services cost $169 per day. Assisted living costs are relatively lower, with an average daily expense of $78 for adult day care and $148 for assisted living facilities.

Nursing home costs, on the other hand, will depend on the type of room selected — whether private or semi-private. These costs can be considerably higher, averaging between $260 and $297 per day, due to the level of care provided in these institutions.

This chart shows the average annual costs of typical long-term care options:

Long-term care service	Average annual cost	Increase since 2020
Homemaker services	$59,488	10.64%
Home health aide	$61,766	12.50%
Adult day health care	$20,280	5.41%
Assisted living facility	$54,000	4.65%
Semi-private room in a nursing home	$94,000	1.96%
Private room in a nursing home	$108,405	2.41%
Source: Genworth's Cost of Care Survey

Factors that affect the cost of long-term care insurance

Age and health: While some insurers offer policies to individuals up to age 79, the reality is that your odds of approval decrease as you age and develop health conditions. Purchasing a policy in your late 40s or mid-50s can also help you secure a lower rate.

Gender: Statistics reveal women tend to outlive men by about five years, on average. This means women have a higher likelihood of requiring extended care in their later years. Because of this, they also pay more than men for long-term care insurance.

Marital status: Most insurers offer couples discounts and shared benefits to spouses who purchase long-term care insurance together.

Insurance company: Since insurers assess risk differently, premiums for similar LTC insurance policies can vary considerably between companies. Discounts, optional riders and other perks also vary by company.

Elimination period: Most LTC insurance policies have a waiting or elimination period, which is the time between when you require care and when the policy starts paying benefits. Opting for a shorter elimination period means you can start receiving benefits faster, but you’ll likely pay higher premiums.

Benefit amount: Your policy’s benefit amount is the most your plan will pay toward your long-term care expenses. The higher your policy’s maximum benefit, the higher your premium.

Optional add-ons: Optional add-ons or riders can significantly increase the cost of your policy. However, benefits like inflation protection may be highly beneficial if you want your benefit to keep up with the rising costs of care.

How to choose the best long-term care insurance

The best long-term care insurance policy for you will depend on your needs and priorities. With that in mind, make sure your long-term care preferences are well-defined and you have shared your concerns and wishes with loved ones before starting your search.

Once you’ve defined your needs, shop around and compare policies from at least three insurance companies to get the best price for the type of coverage you want. If you want to save time, a broker like GoldenCare could do some of the legwork for you.

When comparing policies, consider the following:

Coverage amount: Most long-term care insurance policies have daily benefit maximums as well as lifetime maximums. Consider how much coverage you would need to pay for the type of care you want to receive. Of course, a higher coverage amount will mean a higher premium.

Benefit triggers: Each policy will specify the conditions that must be met before the policy starts paying benefits. Most require a medical professional to certify the insured is unable to perform two or three activities of daily living (ADL) for coverage to kick in. Some plans also cover cognitive impairment (think Alzheimer’s) but may exclude other types of medical incapacity.

Benefit period: The benefit period is the length of time your policy will pay out. According to the Insurance Information Institute (III), the benefit period can range from two years to a lifetime. Opting for a longer benefit period will increase your premium.

Covered care settings: Read the coverage details carefully to determine whether the policy will pay out the same benefit amount regardless of where care takes place. The III states some policies may pay out half as much per day if the policyholder elects in-home care.

Waiting or elimination period: How long must you wait before your policy begins to pay benefits? The longer the waiting period, the higher your out-of-pocket expenses. Yet a policy with a shorter waiting period will generally cost more.

Reimbursement or indemnity model: Both indemnity- and reimbursement-based policies have their benefits. Under an indemnity policy, if your costs of care are less than your maximum benefit amount, you can use the difference in whatever way you see fit. Under a reimbursement model, spending less than the allotted monthly benefit amount could help you extend your benefit period. It could also ensure the benefit is used for your care if you develop a cognitive impairment and can’t manage your finances without assistance.

Inflation growth option: Inflation protection riders allow your benefit to compound at a fixed percentage year-over-year to keep up with rising costs of care. Adding this and other riders to your policy will increase its cost.

Alternatives to long-term care insurance

If private insurance isn’t the right solution for you, there are a few other long-term care alternatives available.

Medicare

Medicare does not cover extended nursing home stays. The program covers costs related to illnesses and injuries and will help pay for up to 100 days of rehabilitation or skilled nursing care after a major health issue, based on a doctor’s recommendation.

Medicaid

As a joint federal and state public insurance program for low-income Americans, Medicaid is the largest public payer of long-term care services. Eligibility for the program is strictly needs-based. If you didn’t qualify for it in the past, you may qualify now or in the future if you spend a significant portion of your assets paying for care. Contact your state’s Medicaid office for more information on eligibility.

U.S. Department of Veterans Affairs (VA)

The VA offers a Veterans Aid & Attendance Pensions Benefit, which provides qualified veterans and surviving spouses an additional monthly amount on top of their pension if they are housebound or require help with ADLs. The benefit is tax-free and can be used for in-home, assisted living or nursing home care.

To qualify, the veteran must receive a VA pension and meet at least one of the following requirements:

Need help in performing daily living activities

Be bedridden due to an illness

Receive services at a nursing home due to a disability

Have limited eyesight even with glasses or contact lenses

Life insurance with accelerated death benefits

Adding an accelerated death benefit (ADB) rider to your life insurance policy allows you to access a portion — typically up to 50% — of the death benefit while you are living. Whatever you receive will be subtracted from the money disbursed to your beneficiaries upon your death, but you can use those funds to cover the cost of long-term care services. To qualify for benefits under an ADB, you must be diagnosed with a chronic or terminal illness.

Using an ADB to cover long-term care costs has advantages and disadvantages. On the plus side, any unused funds will go to your beneficiaries. The drawbacks are that the payout is usually lower than you would receive from a dedicated long-term care insurance policy and it could impact your Medicaid eligibility.

Savings

People with plenty of money saved for retirement can likely cover long-term care costs without help. That said, outliving their savings can be one of the biggest risks people face in retirement. According to Jay Zigmont, Ph.D., CFP® and Founder of Childfree Wealth, “In general, if you have $3 million or more in net worth you may want to consider self-insuring.” Otherwise, you may not have enough to cover the costs of care by the time you require it.

Of course, the best way to save for retirement is to invest. “The challenge is that you need to set aside money just for long-term care and keep in mind tax considerations. Long-term care is increasing by 5% each year on average, so you need to ensure any money you invest at least keeps up with that rate,” says Zigmond.

One tool that can help you maximize your savings is a health savings account (HSA). If you pay for care using this account, you don’t have to pay taxes on the medical expenses associated with long-term care. According to Zigmond, even if you require institutional care, some of your expenses may be tax-free. “Depending on the facility and their billing, there may be a separate cost for housing than medical care. The medical care is likely to qualify to be paid for by an HSA while the housing will not,” he adds.

Short-Term Care Insurance

As the name implies, short-term care insurance provides coverage for a limited period of time, often a year or less. And unlike some long-term care insurance plans, these policies generally offer a no-elimination-period option, which means you can start receiving benefits right away.

According to Slome, while short-term care insurance isn’t available in all states, it’s one of the industry’s best-kept secrets. “[Short-term care insurance] is an ideal product for several categories of people. First, people who are too old to qualify. Second, people who have health issues, since short-term care policies are generally easier to qualify for. They’re also less expensive because they pay benefits for up to a year, which is all the care that most people are going to need,” says Slome.

In fact, statistics show that about 49% of long-term care insurance claims last a year or less. With that in mind, short-term care insurance alone — or in combination with personal savings or other alternatives — could afford all the coverage you may need.

But there’s a specific demographic who could benefit the most from short-term care policies. “It is the best-kept overlooked opportunity for what I call women on their own. So single women who are older and either divorced, widowed or never married and so typically have less assets and savings,” says Slome.

Premiums for long-term care insurance are influenced by the applicant’s sex, so women pay more for equal amounts of insurance than men. However, Slome explains that “[With] short-term care policies, women basically pay the same as men even though women account for 60% of all long-term care claims. That would be the equivalent of people with a DUI paying the same money for car insurance as safe drivers.”

If you’re interested in this type of product, GoldenCare partners with insurers that offer short-term care coverage.

More About Long-Term Care Insurance

Long-Term Care Insurance FAQs

How much does long-term care insurance cost?

According to 2023 cost averages, a $165,000 level-benefit policy would cost between $900 and $2,700 per year. However, the actual cost of long-term care insurance will depend on several factors, including the policyholder's age and health when they purchased the policy, the daily benefit amount, the length of the benefit period and any optional benefits selected.

What does long-term care insurance cover?

Long-term care insurance can cover many services, including skilled nursing care, rehabilitation, personal care and services like meal delivery or transportation. LTC coverage generally includes care provided in various settings, such as nursing homes, assisted living facilities and at home.

When should you buy long-term care insurance?

The American Association for Long-Term Care Insurance (AALTCI) recommends you apply for long-term care insurance coverage in your mid-50s. This should improve your chances of qualifying for a policy and securing a good rate. As you age, you are less likely to qualify for health discounts and your policy application is more likely to get turned down.

Is long-term care insurance worth it?

If you're concerned about who will care for you in your old age or fear becoming a financial burden to your loved ones, long-term care insurance can be well worth it. A healthy 55-year-old can expect to pay between $75 and $516 per month on a traditional policy, while the national average cost of care can range from $1,690 to over $9,000 per month, depending on the type and level of care you require.

What are long-term care insurance state partnership plans?

The Long Term Care Partnership Program is an initiative between the state governments of California, Connecticut, Indiana and New York and private insurers that aims to promote the purchase of private long-term care insurance policies. It also offers policyholders a way to protect their assets so they don't have to spend down their savings to qualify for Medicare.

You see, to be eligible for Medicaid, you must meet the income and asset limits determined by your state. If you exceed those limits, you must spend down your assets to qualify for Medicare. But if you purchase a partnership-qualified policy, you get dollar-for-dollar asset protection. So, for every dollar you spend on long-term care coverage, you get to protect a dollar of your assets from that spend-down requirement.

Who needs long-term care insurance?

Experts agree that long-term care insurance can be most beneficial for middle-income individuals who don't have enough savings and assets to self-insure but wouldn't qualify for government assistance (Medicaid) in their state. Those who can comfortably afford monthly long-term care insurance premiums and want to protect their retirement income from being depleted by potential long-term care costs should consider this type of policy.

How We Chose The Best Long-term Care Insurance Companies

To find the best long-term care (LTC) insurance companies in the industry, we extensively researched LTC products and their features, benefits and costs. With a clear understanding of the different types of policies available, we evaluated insurers based on the following criteria.

Customer satisfaction

Customer satisfaction scores provide valuable insight into how clients perceive a company’s services. To select the best long-term care insurers, we carefully considered the results of the J.D. Power 2023 U.S. Individual Life Insurance Study.

With the exception of Golden Care, a broker that offers the convenience of working with different carriers, all of our top picks have above-average customer satisfaction ratings based on J.D. Power’s latest findings.

Financial strength

In the U.S., insurance guaranty associations protect policyholders if an insurance company becomes insolvent by managing claims and transferring policies to financially stable carriers. Despite this protection, policyholders may be affected by delayed claims processing and administrative hassles if their insurer goes out of business.

With this in mind, we carefully vetted the insurance carriers on our list to ensure they have good or excellent financial strength ratings from major credit rating agencies like A.M. Best, Moody’s, S&P and Fitch Ratings. All of these carriers have a strong or excellent ability to meet their future insurance obligations.

Consumer complaints

In our thorough evaluation of carriers, we also reviewed long-term care insurance complaint data as collected by the National Association of Insurance Commissioners (NAIC).

We carefully reviewed NAIC Company Complaint Index report data from the various subsidiaries of the companies featured in our list. This was done to ensure the data didn’t exceed market averages or suggest significant issues with the companies’ service quality, underwriting, claims processes or sales and marketing practices.

Coverage options and benefits

There are three long-term care insurance options available to consumers:

Stand-alone LTC insurance
Hybrid policies that combine life insurance with LTC benefits
LTC insurance riders that can be added to select life insurance products

These three options have unique features and benefits, and product details may vary by company and state. So while it’s hard to make an apples-to-apples comparison of long-term care insurance products, we pared down our list of top providers by choosing those who offer several policy options, highly customizable plans or exclusive benefits.

Flexibility and customizability

Insurance policies aren’t one-size-fits-all products, and long-term care insurance is no exception. When it comes to choosing a policy, customizability is key. Having multiple different policy features to choose from can help you tailor your policy to your projected future needs.

With that in mind, we chose companies that offer several elimination and benefit period options and allow flexibility with regard to how premiums can be paid and benefits can be used. Several of our top picks also waive the elimination period for certain types of care and offer nonforfeiture benefits, so policy owners can receive a partial benefit or premium refund after a lapse in coverage.

Cost savings and inflation protection

We also considered projected future increases in the cost of care to narrow down policy features that safeguard consumers’ investments. One such feature is inflation protection. This optional add-on increases the benefit amount each year, typically by a fixed percentage, so your investment isn’t eroded by rising costs.

All of our selections offer inflation protection as well as other cost-saving benefits or add-ons, including potential for dividend payments, discounts or shared benefits for couples, guaranteed premiums and return of premium options.

Long-Term Care Insurance Price Index Data

When vetting companies, we referenced the latest Long-Term Care Insurance Price Index Data published by the American Association for Long-Term Care Insurance (AALTC) to understand cost trends within the LTC insurance industry.

We also spoke to experts like Jesse Slome, Director of the AALTCI, in order to understand which features consumers should focus on when purchasing long-term care coverage.

Summary of Money’s Best Long-term Care Insurance of January 2024

Nationwide: Best for Policy Customization
Mutual of Omaha: Best for Stand-Alone LTC Insurance
New York Life: Best for Financial Stability
Northwestern Mutual: Best for Couples
GoldenCare Insurance: Best for Comparing Multiple Providers