How much long-term care insurance do I need? What the experts say

The cost of a nursing home, assisted living facility or live-in caretaker can be high. In fact, according to the Cost of Care Survey from Genworth, you could pay anywhere from $1,700 to upwards of $9,000 for it — and that’s per month.

Fortunately, long-term care insurance can help you cover these costs without draining your savings or nest egg dry. This type of coverage is specifically designed to help with the expenses related to long-term care when you’re no longer able to take care of your daily needs on your own.

In turn, long-term care insurance can be a smart bet for most seniors, despite the extra costs for a policy. But if you’re considering investing in long-term care insurance, here’s what you need to know about coverage options — and how much you should get to protect yourself. 

Get started and explore your long-term care insurance options here.

How much long-term care insurance do I need? What the experts say

There are two options when it comes to long-term care insurance coverage: Stand-alone policies and hybrid policies, which combine life insurance with long-term care benefits. 

“A typical policy may cost $1,000 to $3,000 annually, depending on age and other factors, and could provide $100,000 to $300,000 in benefits,” says Scott Goldberg, president of the consumer division at CNO Financial Group. 

Typically, the costs of long-term care coverage increase as you age. Hybrid policies also tend to be more expensive, as they include two types of insurance protection. 

“Traditional long-term care insurance can be the least expensive but is the most likely to increase year over year,” says Tom West, senior partner at Lifecare Affordability Plan. “Hybrid life and long-term care policies can be very expensive but likely offer more predictability in premiums.”

According to the American Association for Long-term Care Insurance, only a handful of insurance companies offer long-term care insurance. These include Mutual of Omaha, Trivent Lutheran, National Guardian Life, New York Life, Northwestern Mutual Life and Bankers Life.

Find out how much long-term care insurance could cost you here.

Consider your location

To determine how much long-term care insurance coverage you should purchase, you’ll want to think about your location and, more specifically, how much healthcare costs in your area.

“The cost of care can vary a lot by location, so if you live in an area with higher costs, you might require more coverage to ensure you can afford the care you may need,” says Todd Wolfe, senior insurance associate at financial advisory firm Telemus. “Conversely, in areas with lower costs of care, you may need less coverage.” 

According to Gregg Barrett, CEO of insurance solutions firm Waterstreet Company, healthcare costs and premiums tend to be higher in more urban areas and lower in rural ones.

If you need help assessing the costs of care in your area, Genworth’s cost of care tool can point you in the right direction. As Wolfe puts it, “Your location matters when deciding on the right amount of coverage.”

Think about your health risks

Your age and the likelihood that you’ll have a significant health decline play a big role, too, so think about your family health history, any preexisting conditions and your overall health before deciding how much coverage to buy.

“Someone who is in good health and has no family history of chronic conditions may need less coverage compared to someone with existing health issues or family members who have needed long-term care,” says Evan Tunis, president of Florida Healthcare Insurance.

Just remember: Purchasing a policy at an older age or once you have significant health problems will likely result in higher premiums than if you’d purchased earlier. 

“It may be wise to purchase coverage at a younger age — when premiums are typically lower,” Tunis says. 

Know your financial needs

Finally, you should also think about your bigger financial picture. Do you have a lot of savings that could cover the costs of care? Do you have assets you want to preserve for your heirs? What’s your monthly and annual budget for premiums? These factors will all influence how much long-term care coverage you should get.

“Personal finances are also integral to the decision,” Barrett says. “Those with substantial assets might opt for more extensive policies to shield their wealth, while individuals with limited savings may focus on securing essential care without exhausting their resources.”

If you’re not sure about the right coverage amount, talk to an insurance professional. They can point you toward the appropriate amount for your budget and long-term needs.

Check in regularly

Once you purchase long-term care insurance, make sure to circle back at least once per year to reassess.

“As life’s circumstances evolve, so should one’s insurance strategy,” Barrett says. “Periodic reviews, ideally with expert guidance, can ensure that your coverage remains aligned with your current and anticipated needs.”

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