Long-Term Care Insurance
Honest reality check.
What it covers
Pays for help with daily activities (bathing, dressing, eating) when you can't do them yourself. In-home care, assisted living, nursing home, memory care. Original Medicare does NOT cover long-term care.
Reality of the cost
- Buy at age 55-65 = $2,000-5,000/year.
- Buy at 70+ = $5,000-10,000+/year (or denied).
- Premiums often increase 5-15% per year.
- Coverage typically $150-300/day for 2-5 years.
- Inflation rider — $$ but critical.
Who should consider it
- Net worth $500K-$2M (too much for Medicaid, not enough to self-insure).
- Family history of dementia, Parkinson's, etc.
- Buy by age 60-65.
- In good health when buying.
- Steady income to keep paying premiums in retirement.
Skip if...
- Net worth under $250K — Medicaid will cover.
- Net worth $5M+ — self-insure.
- You're 70+ in poor health — too expensive.
- Premium jumps would force lapse.
Alternatives
- Hybrid life + LTC — combines life insurance + LTC. If unused, heirs get life insurance.
- Self-insure — set aside $250-500K specifically.
- Continuing Care community (CCRC) — see /tools/ccrc-explained.
- Home equity — reverse mortgage IF needed.
- Family caregivers — formal agreement + payment.
- Medicaid planning — protect assets via attorney 5+ years before need.
Use fee-only fiduciary
LTC insurance commissions are huge — agents push regardless of fit. Use fee-only fiduciary advisor (NAPFA.org). Pay $300-1,000 for honest analysis. May save $20K+ in unnecessary premiums OR find right policy fit.