How much does long-term care insurance cost in 2023?

A home caregiver holding the hands of an older woman while they talkImage: A home caregiver holding the hands of an older woman while they talk

In a Nutshell

Many factors can affect the cost of long-term care insurance, including age, health status and the level of coverage you desire.
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Long-term care insurance can be expensive, and nearly 70% of people over 65 need this type of aid. Long-term care insurance can provide coverage for in-home care, community-type care and care in various facilities should you need assistance in everyday life.

The average annual cost of long-term care insurance when purchasing $165,000 of immediate benefits for a 55-year-old man is $900. For a 55-year-old woman, the cost is $1,500. But what does this type of health insurance cover?

What is long-term care insurance?

Long-term care insurance provides financial assistance to those who require long-term services and support. LTSS includes care of people that need support because of physical, cognitive, developmental or chronic health conditions.

LTSS can include care provided in the home, a community-based setting or various facilities and can include help with eating, grooming, walking, cooking, bathing and more.

Qualified individuals can use long-term care insurance to pay for assistance to maintain their well-being. They can enable those in need to afford the care that would likely be unaffordable if they were forced to pay out of pocket.

Average cost of long-term care insurance

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Knowing what you’ll have to pay to receive the care you need is a good idea for financial health and wellness. The following are annual estimates of long-term care insurance premiums in 2023, according to the American Association for Long-Term Care Insurance.

StatusAgeAnnual premium
Single male55$900
Single female55$1,500
Single male65$1,700
Single female65$2,700

When underwriting insurance policies, providers may consider the following:

  • Age — Long-term care insurance premiums typically increase as you get older.
  • Health Current personal health and family health history can affect annual premiums.
  • Family situation Long-term care premiums maybe be lower if family members are available and willing to provide care as necessary.
  • Gender Women pay higher premiums on average due to their longer life expectancy.

Long-term care costs without insurance

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The monthly cost of long-term care insurance can take away from retirement savings. For example, the median yearly cost of living in a nursing home reached over $100,000 in 2021. To get more insight into what paying these bills could look like, here are typical monthly costs of long-term care services in 2021:

Long-term care serviceMonthly cost
Homemaker services$4,957
Home health aide$5,148
Assisted living facility$4,500
Adult day health care$1,690
Nursing home care$9,034

How to buy long-term care insurance

Each state regulates which companies can sell long-term insurance policies, and finding the right amount of coverage for your situation may be complicated. Many people buy long-term insurance from an insurance agent, broker or financial planner.

Additionally, state partnership programs can link some private insurance providers with Medicaid — which can help people purchase shorter-term insurance and may include inflation protection. Some employers may even offer group long-term care programs as a voluntary benefit.

Most long-term care policies have an “elimination period,” requiring you to pay out of pocket for 30, 60 or 90 days before the insurer begins reimbursing funds.

Tax benefits of long-term care insurance

Depending on your provider, you may be eligible for tax-deductible premiums when investing in long-term care. Remember that there are often requirements to meet, like choosing a tax-qualified insurance plan and/or spending a certain percentage of your adjusted gross income (or AGI) on annual medical expenses.

If you qualify, here’s an idea of the maximum yearly deductible amount by age.

AgeMaximum deductions
40 and under$480
71 and above$5,960

FAQs about long-term health insurance costs

What is the best age to purchase long-term care insurance?

According to the AALTCI, the best time to purchase long-term health insurance is in your mid-50s. This time frame helps make your policy more cost effective and increases approval odds.

What are the pros and cons of long-term care insurance?

Here are common benefits and drawbacks of long-term care insurance:
Pros of long-term care insurance include …
●      Flexible benefits
●      Reduced out-of-pocket costs
●      Savings/asset protection
Cons of long-term care insurance include …
●      High monthly payments
●      Delayed reimbursements
●      Approval requirements
●      Potentially unused services

Is long-term care insurance the same as life insurance?

No. Life insurance policies provide a financial payout to your beneficiaries after your death. Long-term health insurance policies provide financial assistance to those who need help with everyday activities.