The 5 “Ws” of Long-Term Care Insurance


Published: 04/13/2012

by Michelle Seitzer


Long term care insurance is probably not a household name, but if you are a caregiver for a senior, you’ve probably heard it mentioned. Even still, there is quite a knowledge gap among consumers about this special coverage, coverage that is becoming all the more necessary as public funds dwindle.


Social Security and Medicare are both on shaky ground right now, but even if these programs stabilize, they do not cover everything (head to to find out what is and is not covered). Medicaid may pick up some of the bill in certain states and situations, but that revenue stream is also vulnerable. At the moment, there is no other government-sponsored program with specifically allocated funding for long term care. It is our responsibility to plan ahead, to be prepared for the long term care costs of our senior family members and ourselves.


The National Clearinghouse for Long Term Care Information estimates about 70 percent of people age 65 and up will need long term care services at some point in their lifetime, researchers say, and a surprising 40 percent currently receiving long term care services are between the ages of 18 and 64.


WHAT is long term care insurance and what does it cost?

According to the National Clearinghouse for Long Term Care Information, “long term care insurance policies provide flexibility and...choice.” It is coverage specific to long term care services, such as adult day care, home care, or assisted living care, to name a few. Per the site, the cost of a policy is based on several factors: the type and amount of services you choose to cover, your age when you purchase the policy, and any optional benefits you choose. The average annual premium costs range from $2000 to $2800 (based on age), says this article from


WHY do I need it? Genworth Financial’s interactive map (access it here) allows you to see just how expensive long term care is in your state. Per the site, the average monthly cost of assisted living runs anywhere from $2,000 to $8,000 a month. In some states, nursing home care costs up to $90,000 a year. Home care is also costly; the average hourly rate for a home health aide is about $21.

Most states require that an individual spends down their assets before they could qualify for medical assistance through Medicaid. Long term care insurance helps preserve your or a loved one’s assets and maintain a financial cushion, while also giving you the opportunity to choose where you want to receive care (rather than letting Medicare/Medicaid dictate it).

If you want options, and if you don’t have $5,000 a month or more to spend on assisted living care, you should definitely consider long term care insurance.


WHO is eligible? Some may be too old or disqualified by certain health conditions (such as Alzheimer’s) to purchase long term insurance, but technically, there are no age requirements, according to 


WHERE can I get it? Talk to your insurance agent (the provider you use for home, auto, or life insurance). Even if they do not carry long term care insurance, they can likely make a good recommendation about someone who does. You can also peruse this directory to find out who carries long term care insurance in your state:


WHEN should I start a policy? The sooner the better, as the cost of the policy is determined in relation to age. The ideal time to start a policy, experts say, is in your 50s and 60s. At this time, you can get a lock-in rate and take advantage of a more reasonable spectrum of costs, per Steven Beumer, a long term care insurance agent based in Florida.


Want to learn more about long term care?