What is the average cost of long-term care insurance? 

3 mins readLast updated October 4, 2023by Kate Morgan

Long-term care insurance can be a more flexible, accessible route to care. Here’s what you need to know about how it’s priced and what you’ll pay.

In all, 70 per cent of Americans over the age of 65 need LTC.

Here’s everything you need to know before taking the next step.  

How much is LTC insurance?

There’s no single, black-and-white answer – not with so many variables and so many different LTC policies available.

Different states have different rules and regulations about LTC insurance, and the premiums you pay are affected by several factors, such as: 

  • Age  

  • Health and health conditions 

  • Marital status 

  • Gender 

  • Location 

  • Your policy type/any policy add-ons 

LTC insurance costs by state

Different states offer different LTC insurance rates.

Each state has its own guidelines for approving rates, so the same coverage may be more expensive in Florida than it would be in Arkansas.

The cost of healthcare is also simply higher in some areas than others, which has a knock-on effect on the premium you pay. 

In terms of which states are the most expensive for LTC insurance, central New York has some of the highest average rates for nursing home rooms ($96,360 annually).

It’s also costly in Alaska, where the total annual amount for all long-term healthcare coverage is often more than $180,000.

In terms of the opposite, the three states offering the cheapest LTC insurance policies are:

  • $51,254 annually in Missouri 

  • $51,257 annually in Alabama 

  • $52,272 annually in Texas 

As you do your research, it’s important to note that in some cases, the cost of LTC insurance in a state is actively reduced by state intervention.

In Hawaii, for example, the state pays $70 a day to people who work and care for elderly relatives, covering transportation expenses and a range of care necessities to make life slightly more manageable. 

LTC insurance cost by age

Any financial advisor will tell you that considering LTC insurance cost by age is an excellent place to start.

It’s one of the central determinants, and premiums increase as you get older because you become increasingly likely to need LTC.  

Waiting to purchase LTC insurance until you need it, either in your home or in a nursing home, is the wrong move.

The consensus suggests that it’s best to buy when you’re in your mid-50s, not least because the younger you are when you purchase a policy, the cheaper it is.  

For example, the average single male taking out a policy at 55 pays $950 annually. The average single woman of the same age pays $1,500 annually. (Women generally pay more because they live longer, but they’re also more likely to suffer from chronic illnesses.)

However, within 10 years, the cost of premiums increases significantly. The man pays $1,700 per year by age 65, and the woman pays $2,700.  

The increase is still felt if you’re married. On average, the same amount of coverage costs a 70-year-old married man $1,000 more than a married 50-year-old man.

But couples can access LTC insurance policies with special features, such as a shared money pool, so there are definitely some benefits to be found there.

How to buy LTC insurance

You can purchase LTC insurance directly from an insurance company or agent, but you should do plenty of research before you buy, fully considering every aspect.

A financial advisor can guide you based on their professional experience, so this is something to consider investing in.

If you’re researching alone, we recommend thinking about the following:  

  • Your financial situation – If you’re wealthy, it might be better to use your savings to cover things like assisted living or nursing home costs. That way, there are no restrictions on what you can use the money for.  

  • Your financial goals – How committed are you to leaving money behind for your loved ones after you die? Do you have any dependents or heirs you’d like to support? Many people buy LTC policies simply to protect their assets.  

  • The best policy for you – It’s best to approach agents who offer packages and quotes from multiple companies. That way, you know they’ve got your interests at heart and aren’t just trying to boost their company’s income.  

  • Paying for your policy – This is where certain life insurance perks like HSAs (Health Savings Accounts) can make a difference. You can use that money, tax-free, to cover your costs. You can also exchange an existing life insurance policy or annuity for a LTC plan. 

  • Employer benefits – Some employers offer affordable group policies at much better rates than individual plans. This is an especially good idea if you have persistent health problems and might not be able to afford an individual plan.

Content writer

Kate Morgan

Kate has written for leading publications and blue chip companies over the last 20 years.