May 1, 2026
Price for Long-Term Care Insurance: What It Really Costs and How to Plan Around It
If you’ve recently come into sudden wealth—whether through an inheritance, business sale, or legal settlement—one question often surfaces as you start planning your retirement: what’s the real price for long-term care insurance, and does it make sense for you?
The short answer is that most individuals between 55 and 65 will see average annual premium costs roughly in the $1,500 to $4,000 range, depending on gender, health, and benefits selected. But those numbers only tell part of the story.
Quick Answer: What Does Long-Term Care Insurance Actually Cost in 2025?
Long term care insurance premiums vary widely based on several factors, but here’s what you can generally expect in today’s market:
When you add 3% compound inflation protection (which most advisors recommend), the average cost of long term care insurance for a 55-year-old man rises to about $2,200 per year, while a 55-year-old woman pays approximately $3,750 per year, according to a 2025 price index survey by the AALTCI.
A couple aged 55 can expect to pay an average combined annual premium of $2,080 for a basic policy, which increases to approximately $3,750 if they wait until age 65.
Average annual long term care insurance premiums can range from $1,000 to over $12,000 depending on various factors including age and health.
At Third Act Retirement Planning, we typically see clients in their 50s buying coverage as part of a broader retirement and legacy plan—not as a stand-alone product decision. The “right” price depends on what problem you’re solving: protecting a modest nest egg from a single devastating care event, or supplementing a multi-million-dollar portfolio where you can afford to self-fund part of the risk.
Understanding Long-Term Care Costs Without Insurance
The price of long term care insurance only makes sense against the backdrop of what care actually costs in the U.S. today. The cost of out-of-pocket care can exceed $100,000 annually for nursing home services, which significantly influences long-term care insurance pricing models.
Current median 2024–2025 costs include:
Assisted living facilities: around $5,900–$6,200 monthly (~$71,000–$74,400 per year)
Home health aide services: $34–$35 per hour, often totaling $5,000+ monthly for 44 hours of weekly care
A private nursing home room commonly runs $9,581–$10,798 monthly ($115,000–$130,000 annually)
These costs vary greatly by state and metro area. A nursing home in Atlanta might cost $6,000–$7,000 monthly, while the same level of care in New York or California can exceed $12,000–$15,000. Using tools like local care cost surveys (such as Genworth’s Cost of Care Survey) can help individuals estimate the prices for nursing homes and home health aides in their areas.
Traditional health insurance and Medicare generally pay only for short-term skilled care services—up to 100 days post-hospitalization—not ongoing custodial help with daily activities like bathing, dressing, or eating. Medicaid kicks in only after asset spend-down (typically $2,000–$3,000 in countable assets per state), usually confining recipients to Medicaid-approved facilities with limited choices.
Even a single 3-year nursing home stay can easily exceed $300,000 in today’s dollars, which can devastate an otherwise solid retirement plan—especially for households with $500,000 to $5 million in investable assets.
What Is Long-Term Care Insurance and Why Does Price Differ So Much?
Long term care insurance is designed to pay for help with activities of daily living (ADLs)—bathing, dressing, eating, toileting, transferring, and continence—or severe cognitive disorders, typically at home, in assisted living, or in a nursing facility. Long-term care insurance typically covers a wide range of services designed to assist with these activities of daily living.
Policies pay a set daily benefit or monthly benefit (e.g., $150–$300/day) up to a maximum pool of money (e.g., $165,000–$400,000), which is the primary driver of price.
Long-term care insurance can help cover costs associated with various care settings, including home health care, adult day care, assisted living facilities, and nursing homes.
There are two main categories of long-term care insurance policies: traditional policies and hybrid policies that attach long term care benefits to permanent life insurance or annuities.
This article focuses mainly on pricing for traditional long term care coverage, but we’ll also explain how hybrid policies feel different in terms of how you pay. For clients at Third Act Retirement Planning who’ve received an inheritance, sold a business, or settled a lawsuit, long term care decisions are often about coordinating insurance with existing assets rather than simply finding “the cheapest policy.”
Average Long-Term Care Insurance Prices by Age and Situation
All figures below are illustrative 2024–2025 estimates based on industry sources like the American Association for Long-Term Care Insurance, and actual quotes vary by insurance carrier and state.
A healthy 55-year-old man buying a traditional policy with an initial $165,000 benefit and 3% compound inflation might see premiums around $2,200/year.
A 55-year-old woman for the same policy often pays roughly $3,500–$3,750/year because women tend to live longer and statistically use more care services.
A 60-year-old couple purchasing a shared policy starting at a combined $165,000–$200,000 of benefits might pay around $2,500–$4,000/year total. Discounts of 15% to 30% may be available for married couples purchasing joint policies.
At 65, similar benefits can easily jump 50% or more, with many single applicants paying $3,000–$4,000/year or higher.
Consider the leverage: one year of $110,000 nursing home care could equal 30–40 years of a $3,000 annual premium. Premiums can also be structured as monthly payments (e.g., $150–$300/month), which feels more manageable for many households.
For our higher-net-worth clients (e.g., $3M+ investable assets), we may target policies in the $200,000–$400,000 benefit range, with correspondingly higher premiums, but often paired with the ability to self-fund part of the risk from savings.
Key Factors That Drive the Price of Long-Term Care Insurance
Long term care insurance is “underwritten” coverage: price is based on how likely the insurer thinks you are to need care and how much you’re asking them to pay. Long-term care insurance premiums are heavily influenced by age, health status, gender, and policy choices like coverage amount and inflation protection.
Several factors affect your premium:
Age: Age is a significant factor affecting long-term care insurance premiums; the younger you are when you purchase a policy, the lower your premiums are likely to be. Buying between 50 and 65 typically yields better prices.
Health and family health history: Health status at the time of application plays a crucial role in determining premiums; individuals with existing health issues like heart disease or diabetes may face higher premiums or even denial of coverage. Evaluating your family's medical history is also important, as it helps you and your advisor assess future healthcare needs and determine the appropriate level of long-term care insurance coverage based on potential hereditary health risks. Your family’s medical history and medical records also factor into underwriting.
Gender: Gender affects long-term care insurance premiums, with women typically paying more than men due to their longer life expectancy and higher likelihood of needing long term care.
Location: Location impacts long-term care insurance premiums because insurers base rates on local long-term care costs, which can vary significantly by region. High-cost states like New York or California often see 20–50% higher rates.
Daily benefit amount: Higher daily or monthly benefits increase the cost of long-term care insurance premiums. Choosing $300/day versus $150/day directly raises what you pay.
Benefit period or pool size: Policies designed to cover 3–5 years of care or $250,000+ in benefits cost more than modest 2-year or $100,000 pools, as do longer benefit periods.
Inflation protection: Adding inflation protection to long-term care insurance can nearly double premiums, but it is vital for planning against rising care costs if buying in your 50s, since claim time may be 20+ years away.
Elimination period: The elimination period, or the waiting period before benefits kick in, influences premiums; shorter elimination periods (e.g., 30 days) generally result in higher premiums than longer ones (90–180 days).
Underwriting classes (preferred vs. standard) and lifestyle factors (tobacco use, BMI) can also change your rate category significantly. At Third Act Retirement Planning, we model different benefit amounts and waiting periods alongside a client’s portfolio to right-size coverage instead of just maxing everything out.
Age and Timing: Why Waiting Gets So Expensive
Long term care insurance is cheapest when your risk is lowest, which is why advisors often recommend exploring coverage in your mid-50s to early 60s. The best time to buy long-term care insurance is typically between the ages of 55 and 65, as premiums are generally lower and health conditions are less likely to disqualify applicants.
Purchasing long-term care insurance earlier in life, especially in your 50s, can result in significantly lower premiums compared to waiting until you are older or have health issues.
Delaying the purchase of long-term care insurance can lead to increased premiums, with costs rising significantly as one ages; for example, a single man who buys a policy at age 55 pays $2,200 per year, but waiting until age 65 raises that premium to $3,280.
Premiums for long-term care insurance increase as you age, particularly jumping significantly after age 60.
Delaying the purchase of long-term care insurance until your 70s may result in premiums ranging from $4,000 to $12,000 or more annually—and many applicants are declined altogether due to health changes.
Buying a bit “early” can lock in insurability. Later, you may still be healthy enough money to live independently but not healthy enough to get approved for coverage. We generally start discussing long term care insurance cost with clients in their early 50s as part of a broader retirement and healthcare plan.
Policy Design Choices That Move the Premium Up or Down
Beyond age and health, you have several levers to adjust when fitting long term care insurance into your financial situation:
Daily benefit: Choosing $200/day instead of $300/day can significantly reduce premiums, especially when combined with partial self-funding from existing savings.
Benefit pool/years: Compare a 3-year benefit vs. a 5-year benefit. Most claims statistically fall under 3 years, which can guide design and yield lower premiums.
Elimination period: Moving from a 30-day to a 90-day waiting period can lower premiums, assuming you have enough money in emergency funds to cover those first months.
Inflation protection options: Compare 3% compound, 5% compound (less common now), and indexed options. Skipping inflation protection may make a policy that covers future care costs far less valuable 20 years from now.
We recommend working with a financial advisor to test several policy designs inside a retirement plan projection to see long-term trade-offs in both premium cost and potential benefit value.
Traditional vs. Hybrid Long-Term Care Insurance: How Prices Feel Different
Many people are uncomfortable with “use it or lose it” long term care coverage, which has led to the growth of hybrid policies that combine life insurance and long-term care benefits.
Traditional long term care insurance characteristics:
Traditional long-term care insurance is a standalone policy designed solely to cover long-term care services, often structured as a “use it or lose it” plan.
Pay ongoing annual premiums (e.g., $2,000–$4,000/year) that may be subject to future rate increases approved by state regulators.
Traditional long-term care insurance policies typically pay a predetermined daily or monthly amount for services, up to a lifetime limit.
If you never need care, neither you nor your loved ones receive a payout—your benefit was the protection itself.
Hybrid long term care insurance characteristics:
Hybrid long-term care insurance policies combine long-term care coverage with another financial product, usually life insurance, providing more flexibility than traditional plans.
Often structured as a larger single premium (e.g., $75,000–$150,000 paid once) or limited pay over 10 years, with guaranteed premiums.
Provide a life insurance death benefit or cash value if you never use long-term care, making the “cost” feel more like repositioning assets than paying a pure expense.
Hybrid policies may allow access to a death benefit if long-term care is not needed, with monthly LTC benefits typically capped at 2–4% of the face value.
Who might prefer each? Traditional policies work for those wanting maximum leverage per premium dollar and comfortable with the risk of never claiming. Hybrid policies appeal to those with significant liquid assets (like many Third Act Retirement Planning clients after an inheritance or business sale) who want long term care coverage plus a legacy benefit.
From our fee-only, fiduciary perspective, we evaluate both structures side by side and choose the one that best fits the client’s overall tax, legacy, and liquidity picture.
Which Type Offers Better Value for You?
There is no universal “cheapest” option—value depends on your age, health, marital status, tax situation, and goals for heirs and charities.
If cash flow is tight but you have strong long-term income, traditional LTC with smaller benefits may be more realistic.
If you’ve received sudden wealth (inheritance, business sale, legal settlement) and want to lock in coverage while also leaving a legacy, a hybrid could make sense.
If charitable giving is a priority, consider how a hybrid policy’s death benefit or unused values might coordinate with donor-advised funds or bequests.
At Third Act Retirement Planning, we don’t sell insurance products for commissions. Instead, we help clients evaluate quotes from multiple carriers in light of their broader retirement and biblical stewardship goals.
Is Long-Term Care Insurance Worth the Price for You?
“Worth it” is a personal decision tied to assets, income, family situation, health, and faith-informed values about caring for loved ones and leaving a legacy.
Long term care insurance often makes sense for:
Households with between roughly $500,000 and $5 million in investable assets who could be seriously harmed—but not ruined—by a $400,000–$700,000 care event costing hundreds of thousands of dollars.
Married couples where one spouse’s high care costs could erode the surviving spouse’s retirement security over a longer period.
Families wanting to relieve adult children from both financial strain and full-time caregiving responsibilities. Most long-term care is provided at home, with approximately 65% of care recipients receiving assistance in their own residences rather than in nursing homes or assisted living facilities.
Insurance may be less critical for:
Very high-net-worth families who can clearly self-fund care without jeopardizing long-term goals.
Households with very low assets who may ultimately receive care through Medicaid.
At Third Act Retirement Planning, we evaluate “worth” by modeling side-by-side scenarios in a retirement plan—self-funding vs. using long term care policy benefits—and stress-testing for market downturns, inflation, and varying lengths of care.
We also frame long term care decisions as a way to wisely prepare for foreseeable needs (Proverbs-style prudence) while loving and protecting one’s family from avoidable burdens.
Common Misconceptions About Long-Term Care Insurance Cost
Many people either overestimate or underestimate long term care premiums, leading to avoidance or rushed decisions. Let’s address a broad range of myths:
“LTC insurance is only for the wealthy” – Middle- and upper-middle-income households often benefit most, since they have something meaningful to protect but can’t easily absorb a $300,000+ care expense.
“Medicare will cover it” – Medicare largely does not pay for long-term custodial care, only short-term skilled episodes. Read the fine print on what any policy covers.
“If I don’t buy it in my 40s, I missed my chance” – Many people buy in their mid-50s successfully. But waiting into the 70s greatly limits coverage options.
“Premiums always skyrocket” – Some older policies saw steep increases, but newer products are generally priced more conservatively. We factor potential increases into our planning.
“I can decide this right before I retire” – Health changes can close the window for affordable coverage. Medical history matters more than you expect.
Revisit your assumptions with a fiduciary advisor before deciding long term care coverage is automatically “too expensive.”
How to Evaluate Long-Term Care Insurance Quotes and Fit Them into Your Plan
Comparing only premium amounts can be misleading. You need to look at benefits, inflation protection, and how the policy integrates with your other resources.
A simple evaluation process:
Clarify your goals: protect your spouse, preserve inheritance, maintain control over where you receive care, or some combination.
Estimate local care costs in your state or metro area using sources like the Genworth Cost of Care Survey and project them 20 years out with 3–4% inflation.
Decide how much of those projected rising care costs you’re comfortable self-funding vs. how much you’d like an insurer to shoulder.
When comparing quotes:
Look at initial daily benefit amount, benefit pool size, and whether there is 3% compound inflation protection.
Check the elimination period (e.g., 90 days) and whether you have emergency funds to cover that gap.
Verify financial strength ratings of the insurance carrier (e.g., AM Best A+ minimum) to reduce the risk of future claim issues. One company may differ significantly from another.
At Third Act Retirement Planning, we typically review multiple proposals, run them through retirement cash-flow and tax projections, and prioritize policies that balance cost with flexibility.
Coordinating Long-Term Care Insurance with Tax, Estate, and Charitable Planning
For sudden-wealth clients, the “price” of long term care insurance is best evaluated alongside potential tax savings, estate impacts, and giving goals. Some long term care premiums may be tax deductible depending on your situation.
Consider paying LTC premiums from tax-advantaged sources when appropriate (e.g., partial use of HSA funds for qualified LTC premiums where allowed).
Coordinate beneficiary designations on hybrid policies with your overall estate plan, including trusts or charitable beneficiaries.
Use long term care planning to protect key legacy assets—such as a family business, farm, or real estate—from being sold under pressure to pay for care.
Aligning long term care decisions with faith-based stewardship ensures resources are available both for your care and for the kingdom initiatives or charities God has placed on your heart.
Next Steps: Talk Through LTC Insurance Pricing with a Fiduciary Planner
Don’t make long term care decisions in isolation or under pressure from commission-based sales pitches. Here’s how we can help:
Schedule a discovery call to discuss your age, health, current assets, and family situation.
Allow us to build a retirement and legacy plan that includes projected care costs and shows what happens with and without long term care coverage.
If appropriate, we’ll help you obtain multiple quotes from reputable insurers and compare them objectively. As a fee-only firm, Third Act Retirement Planning does not receive commissions.
Our guidance is grounded in biblical wisdom, long-term stewardship, and a desire to help you finish your “third act” with peace, purpose, and a plan to care well for both your loved ones and your community.
Address long term care insurance pricing proactively—ideally in your 50s or early 60s—so you can make thoughtful, unhurried decisions rather than reacting in crisis. Contact Third Act Retirement Planning to start the conversation today.