Is Insurance For Long Term Care Too Expensive?

Is insurance for long term care too expensive? It’s a common question, one that typically comes after, “Is long term health care insurance necessary?” LTCI may not be cheap, but before we start bashing the costs of LTCI, let’s look at some of the numbers and what we can expect to pay without any type of insurance. Any idea how much you may pay annually to stay at a nursing home – $70,000 a year! An assisted living facility may run upwards of $30,000…and that may be the cheapest option! Home health care? Do you have an extra $66,000 to spend?

Not everyone needs long term health care insurance, but regardless, understanding the costs and structure of long term care are crucial to better understanding this complicated form of insurance. It can be difficult to find out how much LTCI is going to cost. Adding to the difficulty, is the fact that there are lots of factors that can impact a LTC quote and what your premiums will actually end up being. Below we’ve listed some estimates of what you can expect to pay based

Keep in mind that the cost for long term health insurance will vary by state. Make sure to contact a long term care insurance specialist for a more accurate quote in your location. Based on a study completed back in 2006, the average cost of a private room in a nursing home was a staggering $70,000 PER YEAR! If we assume an inflation rate of around 5% per year, these numbers may triple over the next 20 years. Yikes.

So what can you expect to pay for long term care insurance now? Below you will see some figures that will allow you to estimate monthly premiums from some of the top providers, based on your age at the time of application for LTC insurance coverage. These are only estimates, and actual premiums will vary. Again, to get a more accurate estimate, make sure to contact a specialist in your state.

Age 50:

Age 55

Age 60

Age 65

Age 70

*Deduction Periods vary, and are based on Great America and MetLife at a 100 day deduction period, and John Hancock, Prudential and Allianz at a 90 day deduction period.

**Premiums may vary by state, and are based on a Preferred underwriting class and include a 30% couples discount based on two applicants (Partners and spouses) both applying and being approved for LTCI coverage.

***Premiums are based on information available from the long term care insurance carriers as of November 2007. Premium rates are subject to change.

As you can see, the costs of insurance for long term care vary pretty substantially as you age, especially when you reach 70. So really, all we need to ask ourselves is, is the risk really worth it? With the way the economy is now, is the risk of not having insurance worth the gamble that we may not need it?

Leave a Reply