Do you need long-term care insurance?

Insurance specialists agree the best time to start thinking about long-term care insurance is when you’re in your 50s or younger.^{Disclosure 2} Buying a policy while you’re relatively young allows you to start at a lower premium and expand the coverage as needed through future purchase options.

Because your premiums are determined by your health at the time you buy the policy, it’s also wise to make the purchase while you’re healthy. If you wait until you need the coverage, you may not qualify for it, or you may be charged very high rates.

Coverage varies by policy, so be sure to check the fine print and select a plan that expressly covers the types of care you anticipate needing. That could include in-home healthcare services such as skilled nursing, physical therapy, help with daily activities, and more. Plans may also include respite care—temporary care at a facility to give a primary caregiver a break for a few weeks per year. Other types of covered care could include adult day care centers, assisted living facilities, nursing homes, and specialized memory care facilities.

What doesn’t long-term care insurance cover? Exclusions typically include care provided by family members and medical costs that your health insurance should cover.^{Disclosure 3}

There are three main types of long-term care insurance.

Traditional

Stand-alone, or traditional, long-term care insurance provides a maximum benefit amount for a set period of time. If you stop paying the premiums (as with car insurance), your coverage ceases. This type of insurance is sometimes criticized as “use it or lose it.” If you do not need long-term care, you won’t receive any benefits or reimbursement of the money you spent on premiums.

Policy rider

With the second type, a long-term care insurance rider is added to another type of policy, usually a life insurance policy. The rider allows you to use a portion of the policy’s death benefit to cover long-term care services while you’re alive. The amount you claim will be subtracted from the death benefit that goes to your beneficiaries when you die. If you never need long-term care benefits, your beneficiaries can claim the full value of the life insurance policy.

Hybrid

The third type is known as a linked-benefit (or hybrid) long-term care policy. Rather than functioning as an add-on to a separate policy, linked-benefit coverage utilizes one integrated policy that combines the features of traditional long-term care insurance with permanent life insurance or an annuity. Hybrid policies may cost more upfront but usually offer more robust coverage if you need long-term care. If you don’t need long-term care, your beneficiaries will receive the full death benefit. 

Long-term care is expensive—and costs continue to rise. In 2024, average long-term care costs in the United States ranged from nearly $6,500 a month for a home health aide working full time (around 44 hours of care a week) to more than $10,500 a month for round-the-clock care in a private nursing home room.^{Disclosure 4}

While costs vary depending on the policy type you choose, your age, and your health, you can expect to pay around $1,000 to $2,000 per year in premiums for long-term care insurance with a $165,000 benefit.^{Disclosure 5} Tax incentives for those who purchase long-term care policies—both federal and in many states—can help offset the cost. Plus, almost all states participate in the long-term care partnership program, which allows people who’ve purchased long-term care insurance to qualify for Medicaid while preserving some of their assets rather than spending them down.^{Disclosure 6}

Some high-net-worth families choose to self-fund long-term care if they have:

• Several million dollars in liquid assets
• A high tolerance for unpredictable future care costs
• Want to retain full flexibility and avoid insurance premiums
• Want to control how caregivers will be hired, supervised, and managed

But self-funding comes with risks. Long-term care needs are unpredictable and can last much longer—and cost far more—than most families expect.

A Truist Wealth advisor can help you see the cost and risk management benefits of fitting long-term care insurance into your financial plan. But the biggest benefit may be knowing that insurance can reduce the financial burden on your family.

All guarantees are based on the claims-paying ability of the issuing insurance company. In order to qualify for long-term care insurance, you may be required to undergo a medical underwriting process.