Sunset Stories

Is Long-Term Care Insurance Right for You?

Posted by Gayle Young on Feb 22, 2019 11:00:00 AM

By 2020, the national average cost for a private room in a nursing home is projected to be approximately $9,000 per month. At that rate, an extended stay in a long-term care facility could drain a person’s savings in a hurry. There are insurance products that help pay long-term care costs. But premiums can be expensive, and the policies often limit the types of care covered.

“We advise individuals who ask us about long-term care insurance to consult with a professional financial advisor,” says Vicky Bartlett, CEO of Sunset Communities. “Insurance experts can help you weigh the pros and cons of long-term care policies and determine what’s best for your personal situation.”

In the meantime, we’ve put together an overview of long-term care insurance, along with some commonly heard arguments for and against the policies.

What is Long-Term Care Insurance?

Long-term care insurance reimburses policy holders for specific expenses—such as costs associated with personal and custodial care they receive at home or in an assisted living facility. Typical long-term care policies pay for professional assistance with daily living activities ranging from bathing and dressing to cooking and eating, and most can be tailored with specific options and benefits.

Most long-term care insurance policies limit how much money they will reimburse—and for how long. Some policies cover costs for up to two to 5 years, while others provide coverage for as long as you live—regardless of the total amount. Of course, insurance companies consider payout maximum choices when determining premium costs.

Other factors that influence long-term insurance premiums are the policy holder’s age, life expectancy, and overall health.

Determining whether long-term care insurance is a good option usually comes down to weighing costs: do premium costs offset the financial risk of incurring the expenses of a lengthy assisted living facility stay.

Reasons to Buy Long-Term Care Insurance

The American Association for Long-Term Care Insurance reports that 68 percent of those age sixty-five and older will need long-term care at some point. Some will require assistance for a few months, while others will depend on it for years. Every person is different, of course; but odds are you will require long-term care in your lifetime.

As mentioned, long-term care is expensive and—without insurance to help cover the costs—can quickly exhaust your funds. Purchasing a long-term care policy helps ensure you’re able to get professional assistance should you need it without creating a financial burden for yourself or your family.

Once you purchase long-term care insurance, insurers cannot cancel your policy simply because you reach a certain age or develop health issues. Policies can only expire if the holder uses up all the benefits or stops making premium payments.

Arguments Against Buying Long-Term Care Insurance

Like the costs they insure against, premium prices for long-term care policies are steep. Annual premiums typically range from $3,000 to $6,000 depending on risk factors and coverage amounts. And prices are usually subject to upward changes. Costs can make long-term care policies prohibitive for many older adults.

Most long-term care policies require that applicants pass a medical exam in order to qualify for coverage. Consequently, insurers deny between 15 and 20 percent of applications for age or health reasons.

Projecting how much long-term care insurance coverage you might need in the future is difficult. As previously mentioned, policies usually contain a maximum benefit amount and a maximum length. You could purchase a policy today that might not cover all your future costs, or purchase a policy with benefits you’ll never use. With that uncertainty in mind, it’s hard to determine which policy—if any—is best for you.


More than a third of older US adults will need long-term care in the future. An insurance policy can provide a financial safety net for you and your family. However, policies can be expensive and confusing. What’s more, there’s uncertainty that you will ever use it. Work with a financial advisor to to determine whether a long-term care insurance policy is right for you.

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Topics: Long-term Care, Planning, Senior Care Terms, Senior Living, Aging, Assisted Living, Long-Term Care Insurance