Private long-term care insurance: what it costs

What care costs

National medians from the 2025 CareScout survey, which reports what providers actually charge private payers:

• Nursing home, private room: $355 a day, about $129,575 a year.
• Nursing home, semi-private: $315 a day, about $114,975 a year.
• Assisted living: $6,200 a month, about $74,400 a year.
• In-home caregiver: about $35 an hour, roughly $80,080 a year at 44 hours a week.

Those are medians, so half of providers charge more, and the variation between states is large. Check your own area before planning around a national figure.

The four numbers in a policy

• Daily or monthly benefit: what the policy pays toward care. Set it against local costs, not national ones.
• Benefit period: how long it pays, commonly two to five years. Unlimited cover has largely left the market.
• Elimination period: the waiting time before benefits start, typically 30 to 100 days, which you fund yourself.
• Inflation protection: how the benefit grows, often 3% compound. The most expensive option and usually the one worth keeping.

The pool of money is the benefit multiplied by the period. Many policies now pay from a pool rather than strictly per day, so lighter care early can stretch the cover further.

The age window

Mid-50s to early 60s is the conventional window, for two reasons. Premiums rise steeply with age, and health problems that trigger a decline accumulate quickly in that decade.

• Buying at 50 means more years of premiums, at a lower annual rate, and near-certain acceptance.
• Buying at 65 costs substantially more each year and carries a real chance of being declined outright.
• Waiting until care looks likely is not a strategy. By then the answer is no.

For federal employees there is a second clock: FLTCIP is closed and its suspension ends December 19, 2026, with no guarantee it reopens.

Traditional or hybrid

• Traditional: pure insurance. Cheapest per dollar of care benefit, and if you never need care the premiums are gone. Premiums are not guaranteed and can rise with regulator approval.
• Hybrid: life insurance or an annuity with a long-term care rider. More expensive per dollar of care, but it pays a death benefit if care is never needed, and premiums are typically fixed.

Hybrids have taken over much of the market because buyers hate the idea of paying for nothing. That is a real preference, not an irrational one, but you are paying for the guarantee. If the premium difference would otherwise be invested, do that comparison honestly before choosing.

Getting through underwriting

• Cognitive screening is standard, often a phone or in-person interview.
• Mobility, falls history, and conditions that predict future care matter more than they would for life insurance.
• Carriers differ widely in what they accept, so a broker who places long-term care regularly is worth more here than in most lines.
• Apply before a diagnosis, not after one. This is the whole game.

Tax and partnership

• Tax-qualified policies allow premiums to count as a medical expense up to an age-based limit the IRS sets each year, and benefits are generally received tax-free.
• State partnership programmes let you protect assets from Medicaid spend-down equal to what the policy paid out. Rules vary by state and the policy must be certified.
• Some states add their own deduction or credit. Worth asking about before you buy rather than after.

Confirm any tax treatment with a professional for your own circumstances.

Common questions