Age is the prime factor in setting premiums for long-term care insurance. The older the policyholder, the more insurance companies charge for coverage. Age-based cost hikes are modest for younger applicants, but starting at age 60, premiums ramp up sharply with every birthday. Other factors, including gender and geography, can also influence premiums. And a policyholder who is not in good health may find it impossible to get coverage at all. However, age alone can cause premiums to nearly double from age 60 to age 79, the age at which some insurers stop offering long-term care coverage at all. A financial advisor can help you develop a comprehensive plan to pay for your long-term care.
Uses for Long-Term Care Insurance
Long-term care insurance helps provide protection against the financial costs of an extended stay in a nursing home or assisted living facility, as well as costs such as adult day care or in-home care. The coverage gives policyholders peace of mind that their retirement nest eggs won’t be shredded by sky-high bills for care that can last years and cost thousands of dollars a month.
Many retirement planners are concerned about the potential financial impacts of having to pay for long-term care. Medicare, the national government insurance plan for people 65 and older, does not cover long-term care needs such as staying in a nursing home or assisted living facility or for getting help day-to-day activities. Medicaid, the need-based government health insurance program, can pay for long-term care including care at home, as well as in a nursing home. However, because it’s designed for people of limited means, it can be difficult for many retirees to qualify for Medicaid.
That’s where long-term care insurance comes in. This private coverage sold by insurance companies helps individuals pay for stays in nursing homes, assisted living facilities, adult day care and in-home care services. Services covered include nursing care, physical, occupational or speech therapy and help with day-to-day activities.
Long-Term Care Insurance Costs
The obstacle to long-term care insurance for many retirees and planners is the cost of the premiums. In 2022, the American Association for Long-Term Care Insurance (AALTCI) estimated the annual premium a policy with $165,000 in benefits for a single 55,-year-old male policyholder at $950. Women pay significantly more, with the annual premium for a similar policy for a 55-year-old woman estimated at $1,500.
Geography can also be a factor. Mutual of Omaha’s online calculator estimates that the cost for a policy paying up to $4,100 monthly in benefits for a 60-year-old male would be $202 in Illinois, $218 in New York and $249 in California.
Long-Term Care Insurance Premium for Single Male, Age 60, By State
| Illinois | New York | California |
| $202 | $218 | $249 |
Age and Long-Term Care Insurance Costs
The biggest factor, however, is the age of the policyholder. The AALTCI says average annual costs for a common type of policy for a man increase from $950 at age 55 to $1,175 at age 60 and $1,700 by age 65.
The AALTCI doesn’t provide estimates for older ages, when coverage may be difficult or impossible to obtain. However, Mutual of Omaha’s estimator goes up to age 79. It shows that the monthly premium for a single man in California buying a new policy paying $4,100 per month in benefits would increase significantly, rising from $249 at age 60 to $313 at 65. For age 75, premiums would more than double and, by 79, the coverage would cost an estimated $676 per month.
Long-Term Care Insurance Premiums by Age for Single Male in California
| Age 60 | Age 65 | Age 70 | Age 75 | Age 79 |
| $249 | $313 | $410 | $536 | $676 |
For female policyholders, the increases tied to age are even steeper. From $425 for an applicant at age 60, premiums would rise to $524 at 65. For someone age 75, the monthly estimated premium would more than double, to $966 and, by age 79, it would be $1,396 per month, more than three times the premium charged to a 60-year-old.
Long-Term Care Insurance Premiums by Age for Single Female in California
| Age 60 | Age 65 | Age 70 | Age 75 | Age 79 |
| $425 | $524 | $662 | $966 | $1,296 |
What Long-Term Care Insurance Covers
A long-term care insurance policy pays for the cost of care due to a chronic illness, a disability, or injury. It also provides an individual with a means to pay for any assistance they may require as a result of the general effects of aging. This could include skilled nursing care as well as physical, occupational or speech therapy. It also can pay for help with day-to-day activities such as dressing and bathing.
Long-term care insurance doesn’t typically pay for medical care, such as doctor visits. Medicare, Medicaid and private health insurance are all options for getting assistance with these costs.
Bottom Line
Your age will impact how much you pay in premiums for long-term care insurance. An older person applying for a new policy will have to pay significantly more for coverage than someone just a few years younger. Premiums accelerate beyond age 60. By age 79, a male applicant may pay more than twice as much for a common type of policy as a 60-year-old. A woman getting a new policy at age 79 may pay more than three times as much as someone 19 years younger.
Tips for Retirement Planning
- A financial advisor can work with you to create a retirement plan to help cover healthcare costs in your golden years. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Healthcare can be one of the biggest costs for many retirees. SmartAsset’s guide to healthcare costs in retirement lays out the best available evidence about how much you may spend, along with ideas on how to pay for it.
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