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When Should You Purchase Long-Term Care Insurance?

  • August 16th, 2022

Senior couple meeting with advisor in office.Long-term care insurance can cover nursing home bills, assisted living fees, and in-home care, providing financial support if you require assistance with daily living when you get older. However, it can also be expensive. Determining the best time to buy long-term care insurance can help you manage your finances effectively as you prepare for the future.

Criteria that affect the cost of long-term care insurance

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Several factors influence the average long-term care insurance premiums, including gender, marital status, location, health, and age.

  • Generally, women pay higher premiums than men because they tend to live longer.
  • Rates for couples can be lower than two single payments.
  • Some states have higher average premiums than others. The average monthly cost of a private room in a skilled nursing facility in Alaska is $36,378, and a shared accommodation costs $31,512. Compare this to Missouri — where the average monthly cost of a private room is $5,931, and $5,262 for a semi-private room.
  • Long-term care insurance plans may be unavailable to people with certain health conditions, such as dementia, muscular dystrophy, and cystic fibrosis.

Age is one of the most critical factors impacting how much you will have to pay for long-term care insurance. Generally, younger people pay lower premiums, as premiums increase with age.

According to the American Association for Long-Term Care Insurance, people will have different annual premium rates depending on when they purchase their insurance:

  • A man purchasing $165,000 of long-term care insurance faces an average annual premium of $950 at age 55, $1,175 at 60, and $1,700 at 65.
  • A woman buying $165,000 of long-term care insurance can expect to pay, on average, a yearly premium of $1,500 at 55, $1,900 at 60, and $2,700 at 65.
  • A couple obtaining $165,000 of long-term care insurance at a combined rate can anticipate paying $2,080 if they are both 55, $2,600 at 60, and $3,750 at 65.

Other considerations: inflation and life insurance

Several other considerations might affect when you decide to acquire long-term care insurance:

  • Inflation. The rates for long-term care insurance have increased over time and will continue to rise with inflation. Some plans come with inflation protection, safeguarding your financial future. Therefore, buying a plan earlier can protect against the rising cost of care.
  • Your dependents. Life insurance is a good idea for those with dependents. Once children reach adulthood and become self-sufficient, parents may consider switching long-term care insurance for life insurance, allocating the place in their budget for life insurance payments to long-term care insurance. If you have a life insurance policy, you may also be able to convert it to pay for long-term care.

What is the best time to buy long-term care insurance?

According to the United States Department of Health and Human Services, approximately 70 percent of people will require care by age 65. The optimal time to purchase long-term care insurance depends on your unique situation.

You can purchase long-term care insurance when you are younger for lower annual premiums, yet those yearly payments can accumulate. On the other hand, your insurance premium could become untenable if you wait until a more advanced age, such as your 70s or 80s, to purchase it.

Obtaining long-term care insurance in your 50s or early 60s may be an effective option for many people, allowing you to capitalize on relatively lower rates while ensuring financial protection as you age.


Last Modified: 08/16/2022
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