Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The average cost of long term care insurance depends on the type of policy chosen, and the age of the applicant. Even though premium rates rise with age, they are still inexpensive compared to the cost of paying for long term care expenses directly.

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This article explains what this type of coverage provides, the typical costs of long term care, and the average cost of insurance for those costs.

Long Term Care Coverage

Long term care insurance coverage is bought to defray the cost of services for a person who is unable to perform the activities of daily life, such as bathing, dressing and using the washroom independently.

This type of insurance can help to pay for the cost of services provided by a nursing home or those given to a patient in his or her own home.

The policyholder may choose a plan where the insurance will pay a daily benefit that is used toward the cost of care. Some plans will pay a set amount per month and the policyholder can choose to spend less money on some days, such as when family care is not available.

A long term care insurance plan may have a specified lifetime limit for coverage. Some insurance companies will offer a policy that has no set lifetime limit where the policyholder will continue to receive benefits as long as he or she requires long term care. This is a more expensive option than a plan offering a ceiling on the level of benefits it will provide.

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Cost of Long Term Care

Long term care for people who need assistance can be a very expensive proposition. According to statistics released by the AARP and Genworth Financial in 2008, the average cost of nursing home care in the United States was $76,460. This figure works out to just over $200 per day. At that point, the rate was 17% higher than the cost of care in 2006.

A one-year stay at an assisted living facility will cost just over $36,000 for a one-bedroom unit. This 2008 number represents an increase of 25% over the cost of care from 2006, and has no doubt increased since then.

Many people don’t realize that the likelihood of needing long term care at some point is quite high. Some statistics claim that over half of the population ages 65 years of age or older will need this type of assistance at some point.

Medicare is not meant to cover the cost of long-term care in most cases and is not the same thing as long-term care insurance. This type of assistance will pay for the first 100 days of nursing home care if a person is receiving skilled care and has been transferred to the nursing home directly after a hospital stay of at least three days in length. The plan will cover limited home visits from skilled care workers, as well as some hospice care for terminally ill patients.

The only way that a person can get Medicare to pay for long term care is if he or she is destitute. It simply doesn’t make sense to liquidate all assets so the Medicare will pick up the tab for long term care. Buying a long term care insurance policy is a much better plan, since it covers services while leaving the policyholder’s assets intact.

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Premium Costs of Long Term Care Insurance

The cost of long term care coverage varies, depending on the age of the person who is applying for coverage. The average cost for coverage for all age groups for 2007 was $2,207 per year. The lowest premium rates were paid by policyholders under the age of 40 and came in at approximately $880 per year. For people between the ages of 40-49, the average cost of coverage was $1,781.

After the age of 50, a person can expect to pay $1,982 for long term care insurance coverage. At 60, premiums jump again to $2,249. Waiting until the age of 70 to arrange coverage will be a pricey proposition, with rates rising to just over $3,000 per year at that point.

Buying long term care insurance is a savvy move that should be considered by all adults. Medicare will not pay for this type of service unless the recipient is destitute and going through all available assets to get assistance is not the best course of action when paying premiums is a much more cost-effective way to get funding for care. Given the fact that the majority of the population will need long term care, chances are very good that paying for premiums will be money well spent.

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