Is Long-Term Care Insurance Worth the Cost?
The cost of long-term care—whether it’s a home health aide, assisted living, or a skilled nursing facility—can quickly drain your retirement savings. Today, the average annual cost of a private nursing home room exceeds $100,000. For families who want to protect their assets and avoid burdening loved ones, long-term care (LTC) insurance is often the only real solution. But is it worth the price?
Is Long Term Care Insurance Worth It? That depends on your age, health, financial goals, and family history. Traditional LTC policies can offer daily or monthly benefits for care lasting several years. Premiums are based on age and health at the time of application—and the earlier you apply, the lower the cost. However, some carriers have increased rates or exited the market in recent years, leaving many people wondering if alternatives exist.
Hybrid LTC policies—such as life insurance or annuities with long-term care riders—have become popular in recent years. These offer built-in care benefits if you need them, and a death benefit (or cash value) if you don’t. They’re often funded in one lump sum and are guaranteed never to lapse, regardless of health changes.
At Diversified Insurance Brokers, we walk clients through both traditional and hybrid options to create a custom long-term care plan that fits their family and financial needs. Our advisors compare products from dozens of carriers to ensure you’re not overpaying—or underprepared.
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FAQs: Is Long-Term Care Insurance Worth It?
What does long-term care insurance actually cover?
Long-term care insurance can help pay for home health care, assisted living, adult day care, memory care, and nursing home care when you need help with daily activities or have a cognitive impairment, depending on the policy you choose.
Who should consider long-term care insurance?
It is most appropriate for people who want to protect retirement assets, avoid relying solely on family or Medicaid, and can afford premiums without straining their budget, typically in their 50s or early 60s.
Is long-term care insurance expensive?
Premiums can be significant, but the cost of care is often much higher. Whether it feels expensive depends on your age, health, benefit amount, inflation protection, and how much of the potential care expense you want the policy to cover.
Can premiums increase over time?
Yes. Many traditional long-term care policies are not guaranteed level premium contracts. Carriers can request rate increases on a class basis, subject to state approval, which can raise your costs later in life.
What happens if I never need long-term care?
With traditional policies, you may pay premiums and never use the benefits, similar to homeowners or auto insurance. Hybrid life or annuity-based policies can provide death benefits or cash value even if you never use long-term care benefits.
How do I know if long-term care insurance is worth it for me?
It depends on your assets, income, family situation, and risk tolerance. People who want to protect savings, preserve choice in care settings, and avoid burdening family often see long-term care insurance as worthwhile.
Is self-funding care a better option than buying insurance?
Self-funding may work for households with substantial assets, but it concentrates the risk on your portfolio. Long-term care insurance can share or transfer that risk to an insurer, so the decision depends on your comfort with potential future costs.
What role does inflation protection play in the value of a policy?
Inflation protection helps benefits keep pace with rising care costs over time. It increases premiums, but without it, today’s coverage amounts may be insufficient decades from now, reducing the long-term value of the policy.
Can long-term care insurance help protect a spouse or family?
Yes. Coverage can help prevent one spouse’s care needs from depleting joint assets, reduce pressure on adult children to provide hands-on care, and preserve more of the estate for heirs or a surviving spouse.
When is the best time to buy long-term care insurance?
Many people explore coverage in their 50s or early 60s, when they are more likely to qualify medically and premiums are generally more affordable than waiting until later in retirement.
About the Author:
Jason Stolz, CLTC, CRPC, is a senior insurance and retirement professional with more than two decades of real-world experience helping individuals, families, and business owners protect their income, assets, and long-term financial stability. As a long-time partner of the nationally licensed independent agency Diversified Insurance Brokers, Jason provides trusted guidance across multiple specialties—including fixed and indexed annuities, long-term care planning, personal and business disability insurance, life insurance solutions, and short-term health coverage. Diversified Insurance Brokers maintains active contracts with over 100 highly rated insurance carriers, ensuring clients have access to a broad and competitive marketplace.
His practical, education-first approach has earned recognition in publications such as VoyageATL, highlighting his commitment to financial clarity and client-focused planning. Drawing on deep product knowledge and years of hands-on field experience, Jason helps clients evaluate carriers, compare strategies, and build retirement and protection plans that are both secure and cost-efficient.
