When Should You Apply for Long-Term Care Insurance?

As they age, older adults may need help completing basic activities like getting dressed and taking baths. Unfortunately, traditional health insurance plans rarely cover this kind of care. This is where long-term care insurance comes into play.

For a full financial roadmap, consider working with a financial advisor. 

What Is Long-Term Care Insurance?

Most long-term care insurance policies cover custodial and personal care when you cannot perform at least two activities of daily living (ADLs). These include bathing, dressing, eating, toileting, continence and transferring.

Covered services often include:

• Home health aides
• Adult day care
• Assisted living facilities
• Memory care units
• Nursing homes

Policies generally also cover care coordination services, respite care for family members and some home modifications, such as ramps or grab bars, if medically necessary. Hospice care and care for dementia or Alzheimer’s disease are also typically included.

What long-term care insurance does not cover are standard healthcare costs, such as doctor visits, hospital stays, surgeries and prescription drugs. Most policies also exclude coverage for care provided by family members, treatment for mental or nervous disorders (other than dementia) and services outside the United States unless you purchase an international rider.

Coverage limits apply. Many policies pay a daily or monthly maximum benefit, such as $150 per day or $4,500 per month, and set a total lifetime cap, often three to five years of coverage. ¹

Once you reach those limits, you must cover the remaining costs out of pocket.

Should You Apply for Long-Term Care Insurance?

Predicting whether you’ll contract a disease or become disabled when you grow older can be nearly impossible, even if you know you’re genetically predisposed to develop a certain medical condition.

Part of the problem with long-term care insurance is the fact that it’s usually expensive. After all, senior care isn’t cheap.

According to the latest data, in 2025, the median annual cost for full-time homemaker services in the U.S. was $6,673 per month. ² The costs climb to $9,581 a month for a semi-private room and $10,798 a month for a private room in a nursing home.

Medicaid is one alternative to long-term care insurance, but it’s only available to low-income individuals. Does that mean you’re stuck buying a long-term care policy?

Research indicates that most people don’t need to apply for long-term care insurance. While many seniors will need access to some form of extended care, some studies suggest these services are often only necessary for a short period.

While 56% of seniors will require some type of long-term care (LTC) within their lifetime, but LIMRA estimates just 3% of Americans over age 50 have any LTC insurance protection. Instead, most older adults receive this support from family and other caregivers.

If you can afford to pay for long-term care insurance premiums, it may be worth purchasing. The AARP recommends applying for long-term care insurance if you have more than $75,000 in assets (not counting your home). ³  

When to Apply for Long-Term Care Insurance

If you’ve decided that you want long-term care insurance, it’s best to enroll in a policy sooner rather than later.

Seniors should begin looking for LTC insurance in their mid-50s, according to the American Association of Long Term Care Insurance (AALTCI). ⁴  This is because premiums increase both with age and inflation, so what you pay today will likely be less than the cost in five or 10 years.

Insurers consider many factors when deciding whether to offer someone insurance coverage. If you’re an older adult and your health isn’t great, you could be denied a policy. If you are eligible for coverage, you could get stuck with high insurance premiums.

Your best bet is to buy long-term insurance coverage while you’re still relatively young and healthy. This way, you’ll qualify for more affordable premiums.

How to Enroll in a Long-Term Care Insurance Plan

Before applying for long-term care insurance, it’s important to compare policies and rates. You must also figure out how much insurance you need. 

Some popular companies that offer long-term care insurance include these leading insurers.

• Northwestern Mutual
• Genworth Financial
• Transamerica

When you call for a quote, you can speak with an insurance agent who can help you find a long-term care insurance product that meets your needs.

After you purchase a policy, you usually can’t access your benefits until you’re unable to complete two or more activities of daily living, such as dressing, eating, bathing and walking. That is something you should keep in mind before moving forward with any specific policy.

What Long-Term Care Insurance Actually Costs

The price of a long-term care policy depends on a handful of variables. The range is wide enough that two people the same age can end up paying very different premiums based on their choices when setting up coverage.

Age

Age at purchase is the single biggest factor.

These are the average prices for LTC insurance, according to 2025 data from the AALTCI. ⁵

Average Long-Term Insurance Premium Cost*

Source. American Association of Long Term Care Insurance.

*Based on $165,000 level benefits.

Waiting until 70 or later pushes premiums higher still, with many applicants facing medical underwriting that can result in a denial or a rated policy with significantly higher costs.

Health

Health status matters nearly as much as age.

Insurers evaluate several factors before approving your policy:

• Medical history
• Current medications
• Weight
• Cognitive function
• Family history

Conditions like diabetes, heart disease or a history of stroke can lead to higher premiums or a flat-out rejection.

This is why buying while your health profile is still clean tends to result in a lower lifetime cost, even though you pay premiums for more years.

Benefit Amount

The benefit amount you choose also shapes your premium.

A policy paying $150 per day costs less than one paying $250 per day, but the lower premium may not cover the full cost of a nursing home in your area.

The benefit period, which is how many years the policy will pay out, is another lever. A two-year benefit period is cheaper than a five-year period. However, most people who enter a nursing home stay for less than three years, so a three-year period is a common middle ground.

Elimination Period

The elimination period is the number of days you must pay out of pocket for care before the policy starts paying. A 90-day elimination period is standard and produces lower premiums than a 30-day period.

Think of it like a deductible: the more you cover upfront, the less the policy costs per year.

Inflation

Inflation protection is the variable with the biggest impact on premiums, but it is also the most often underestimated.

A policy purchased at age 55 may not be used for 25 years. Without inflation protection, a $150 daily benefit bought today could cover less than half the cost of care by the time you need it.

Adding a 3% compound inflation rider can nearly double the annual premium, but it ensures the benefit grows each year to keep pace with rising care costs. For this reason, many financial advisors consider this the single most important feature in a policy.

Alternatives to Traditional Long-Term Care Insurance

The traditional standalone long-term care insurance market has contracted significantly over the past two decades. Several major insurers have exited the business, and those that remain have raised premiums on existing policyholders multiple times.

As a result, these alternatives and strategies have emerged to fill the gap.

Hybrid Life Insurance and Long-Term Care

These products combine a life insurance policy with a long-term care benefit.

You pay either a single lump sum or a series of premiums into the policy. If you need long-term care, the policy pays for it by drawing down the death benefit. If you never need care, your beneficiaries receive a death benefit when you die.

The appeal of hybrid insurance is that your money still goes somewhere, regardless of whether you ever file a claim. With a traditional policy, if you pay premiums for 20 years and never need care, you get nothing back. For this reason, hybrids have become the dominant product in this market.

The trade-off is that the long-term care benefit in a hybrid is typically less generous than that of a standalone policy for the same premium dollar.

Short-Term Care Insurance

For people who cannot afford or qualify for a full LTC policy, short-term care insurance covers a limited period of care, usually lasting six to twelve months. Premiums are lower and medical underwriting is often less stringent.

This type of policy will not cover a multi-year nursing home stay, but it can bridge a gap after a hospitalization or provide enough coverage for home health care during recovery from a fall, surgery or illness.

Self-Insuring

If you have substantial assets, paying for care out of savings may make more financial sense than paying premiums for decades.

The question is whether you can absorb three to five years of care costs without jeopardizing your spouse’s financial security or your other retirement goals. These can run from $300,000 to $600,000, depending on the type of care and where you live.

Self-insuring works best for households with a high net worth who can set aside a dedicated reserve specifically for potential care expenses.

Medicaid

Medicaid covers long-term care for individuals who meet strict income and asset requirements. Qualifying typically means spending down your savings to very low levels.

For married couples, there are spousal protection rules that allow the healthy spouse to retain a portion of the household’s assets and income. However, the thresholds vary by state. Some families plan ahead by restructuring assets years in advance to preserve wealth while qualifying for Medicaid, usually with the help of an elder law attorney.

There is no single option that works for everyone. Many people use a combination, such as a hybrid policy, for the first few years of care and then utilize Medicaid as a backstop if care extends beyond the policy’s coverage period.

How to Compare Long-Term Care Insurance Policies

Shopping for long-term care insurance without understanding the key variables is like buying a house without knowing the square footage. Two policies with the same monthly premium can provide very different levels of protection depending on their structure.

Daily or Monthly Benefit Amount

The benefit amount is the maximum the policy will pay per day or per month for covered care.

To choose the right number, look up your area’s current cost of the type of care you are most likely to need. If a semi-private nursing home room in your state costs $280 per day and your policy pays $150, you are responsible for the $130 difference every single day.

Starting with a benefit that covers at least 75% to 80% of current costs in your area, combined with an inflation rider, gives you a reasonable cushion.

Benefit Period

The benefit period is the length of time the policy will pay out once you start receiving benefits.

Common options are two, three, four and five years. Some policies offer lifetime coverage, though these are rare and expensive.

The Department of Health and Human Services reports that only 24% of older adults receive more than two years of paid long-term care. This suggests that a three-year period covers most scenarios.

A longer period adds cost but provides protection against the tail risk of extended care needs.

Elimination Period

The elimination period is the number of days you must pay for care yourself before the policy begins paying.

Ninety days is the standard, meaning roughly three months of out-of-pocket costs before coverage kicks in. A shorter elimination period costs more per year but reduces your exposure at the start of a care event.

Make sure you have enough liquid savings to cover the elimination period if you ever need to file a claim.

Inflation Protection

Inflation protection determines whether your benefit amount grows over time.

A 3% compound inflation rider increases your daily benefit by 3% each year. This roughly doubles it over 24 years. A 5% rider grows faster, but costs significantly more.

Some policies offer simple inflation protection rather than compound protection. This grows the benefit by a fixed dollar amount each year rather than a percentage of the current value.

Compound is more expensive but provides meaningfully more purchasing power over a long holding period. Without any inflation protection, you are betting that the benefit you buy today will still be adequate in 20 or 30 years, and care costs have historically risen faster than general inflation.

Shared Benefit Riders

Some insurers offer a shared benefit option for couples.

If one spouse exhausts their individual benefit, they can draw from the other spouse’s unused benefit pool. This provides additional protection without buying two separate policies with longer benefit periods.

It can be more cost-effective for couples where one spouse is more likely to need extended care than the other.

5 Ways a Financial Advisor Can Help With Long-Term Care Insurance Decisions

A financial advisor can help you determine whether long-term care insurance belongs in your financial plan, which type of coverage fits your situation and how to pay for it without undermining your other goals.

1. Decide Whether You Need a Policy, a Hybrid or Neither

An advisor will look at several factors to determine whether traditional coverage, a hybrid policy or self-insuring is the better path for your situation.

• Assets
• Income
• Health
• Family history
• Risk tolerance

Example:

A couple with $2.3 million in retirement savings and a paid-off home asks their advisor whether they need long-term care insurance.

The advisor models the cost of three years of nursing home care for each spouse. They find that even in a worst-case scenario, the couple could cover the costs from savings without running out of money.

The advisor recommends setting aside $400,000 in a conservative allocation earmarked for potential care costs, rather than paying $5,500 per year in premiums over the next 20 years.

2. Find the Right Benefit Amount and Period for Your Area

An advisor can research care costs in your state and compare them to different policy configurations. Based on this, they can recommend the right coverage without the risk of overpaying for benefits you are unlikely to use.

Example:

A client in a state where nursing home costs average $250 daily is considering a policy with a $150 daily benefit and a two-year benefit period.

The advisor points out that the $100 daily shortfall would cost the client $36,500 per year out of pocket on top of the premiums already paid. The advisor recommends increasing the daily benefit to $200, setting a three-year benefit period and adding a 3% inflation rider.

This raises the annual premium by $1,400 but closes most of the coverage gap.

3. Time the Purchase to Balance Cost and Insurability

An advisor can help you figure out the best age to buy based on your current health, family history and how premiums increase with age.

Example:

A healthy 52-year-old client is debating whether to buy now or wait until 60.

The advisor shows that buying now locks in a premium of roughly $2,800 per year. However, waiting until 60 could push that to $4,200 or higher, assuming no health changes.

Over the client’s lifetime, buying earlier results in higher total premiums but lower per-year premiums. It eliminates the risk of developing a condition that could later make coverage unavailable.

The client buys now.

4. Evaluate Whether Your Existing Coverage Is Still Adequate

An advisor can review a policy you purchased years ago and determine whether the benefit amounts, inflation adjustments and coverage terms still make sense given current care costs and your financial situation.

Example:

A client purchased a long-term care policy 15 years ago with a $100 daily benefit and no inflation rider.

The advisor compares that benefit to current care costs in the client’s area and finds that a semi-private nursing home room now costs $275 per day. The policy would cover only 36% of the actual cost.

The advisor explores whether the insurer offers a benefit increase option. If not, they recommend supplementing with a short-term care policy or increasing the client’s dedicated care savings reserve.

5. Fit the Premium Into Your Broader Financial Plan

An advisor can show you where long-term care premiums fit in your budget. They can determine whether paying them requires trade-offs with other goals, such as retirement savings or debt payoff.

Example:

A 58-year-old client wants a long-term care policy but is already stretched between maxing out retirement contributions and helping a child with college costs.

The advisor builds a cash flow projection showing that the client can afford a $3,200 annual premium starting in two years once the college payments end. In the meantime, the advisor recommends applying now to lock in the health-based rate while the client is still in good health. They set the first premium due date to align with the end of the college obligation.

Bottom Line

Long-term care insurance can help cover the cost of services such as home health care, assisted living and custodial care. However, premiums are often high and rise with age. Purchasing a policy earlier can lower the annual cost, though it also means paying premiums for many years before benefits may be used.

The best long-term care insurance for you often depends on factors such as your current health, family medical history, available assets and whether you want to protect your estate from future care expenses.

Tips for Insurance Planning

• A financial advisor can guide you in selecting insurance that fits your needs and provides appropriate protection. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with 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.
• Want to figure it out on your own but you’re not sure where to start? Use our calculator to help you figure out how much insurance you need.

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