Long Term Care Insurance Cost: Average Rates & What Drives Them

Long term care insurance pays for help with daily living, such as nursing home stays, assisted living, or care at home. Original Medicare covers only limited short term care, so some people buy a separate policy years before they expect to need it. The cost depends heavily on when you buy and what you choose.

Premiums for this kind of coverage are usually quoted per year, not per month. This page uses the annual price index published by the American Association for Long-Term Care Insurance (AALTCI), an industry association. Its figures use Illinois pricing, so rates can differ in other states.

Age 55 is a common age for AALTCI's benchmark. The table above shows a policy with a level benefit, meaning the pool of money stays at the initial amount for as long as you hold the policy. Women pay more than men because insurers price in longer care claims among women.

A couple buying two policies at once typically pays less than the sum of two single prices, since insurers offer a discount for couples. The couple figure here is combined for both people.

A level benefit may buy less care in 25 or 30 years, since care costs keep rising. Many buyers add an inflation option so the pool grows each year. That raises the premium substantially.

The difference between the two tables is the price of growth. With 3% compound growth, the starting benefit pool grows to a much larger amount by the time many people need care, but you pay more every year for it.

NerdWallet publishes the same set of figures and cites AALTCI as the source, so they are one data set, not two separate checks.

The older you are when you apply, the more you pay. At older ages you also face more chance of being declined for health reasons.

These examples use different ages and coverage mixes, so do not compare them to each other directly. They show that premiums climb steeply from the mid 50s to the mid 60s.

The same applicant can get very different prices. AALTCI reported quotes from five insurers for an Illinois couple, both 60, with the same benefit design.

The most expensive quote costs far more than the cheapest for nearly identical coverage. An independent agent who sells policies from several companies can request all of them at once.

Traditional long term care insurance is a standalone policy. Linked benefit policies combine life insurance or an annuity with long term care coverage, and pay a death benefit if you never need care.

Linked benefit products are harder to compare with traditional policies because the features vary. AALTCI shows one example from one insurer, and other companies price differently.

• Age when you apply
• Sex and marital status
• Health at the time of application
• Size of the benefit pool and daily or monthly limit
• Inflation option
• Elimination period, which is the waiting time before benefits begin
• State and insurer

Insurers can ask state regulators to raise premiums on existing policies, and many policyholders have seen increases in past years. Ask any agent how often the company has raised rates and by how much.