Cost of Long Term Care Insurance Coverage
Long Term Care coverage premiums are based on your age at the time you apply for coverage, so the premium you would pay goes up with each birthday. Once you’ve purchased Long Term Care insurance, the insurer can only raise your premium on a class basis — not because of your age or health.
The graph below shows how a typical policy gets more expensive based on the age of the applicant.
Other factors affecting your Long Term Care coverage premium rate, are:
- Your health when you apply
- The length of time during which covered benefits would be available
- Specific policy features, benefits and optional benefits you select
- Any discounts for which you are eligible. (Discounts can add up to 40% or more depending on the company you choose.)
It is important to note that while Long Term Care insurance can seem expensive, just one year in a nursing home is often more expensive than 20 or 30 years of Long Term Care insurance premiums. (1)
1 "Long Term Care — Your Finacial Planning Guide, " Phyllis Shelton, April, 2003.
See the charts below to see how quickly Long Term Care policyholders can recoup their premium compared to daily nursing home costs.
| Total Premiums Spent | Daily NH Cost in 2020* | Days To Recoup Premium |
|---|---|---|
| $20,000 | $376.29 | 53.2 |
| $30,000 | $376.29 | 79.7 |
| $40,000 | $376.29 | 106.3 |
| Total Premiums Spent | Daily NH Cost in 2030* | Days To Recoup Premium |
|---|---|---|
| $30,000 | $612.93 | 48.9 |
| $40,000 | $612.93 | 65.3 |
| $50,000 | $612.93 | 81.6 |
| Total Premiums Spent | Daily NH Cost in 2040* | Days To Recoup Premium |
|---|---|---|
| $40,000 | $998.40 | 40.1 |
| $50,000 | $998.40 | 50.1 |
| $60,000 | $998.40 | 60.1 |
* Based on MetLife Mature Market Survey, Aug. 5, 2003. Assuming five percent inflation.
