Long-Term Care Insurance FAQs
Get Clear Answers to Your Top Questions
Planning for future long-term care needs can feel overwhelming, but you don’t have to navigate it alone. Below you’ll find answers to the most frequently asked questions about long-term care insurance, coverage options, costs, and more.
Have a specific question? Our licensed specialists are always here to help—by phone or email.
Top Long-Term Care Insurance Questions
What is long-term care insurance?
Long-term care insurance helps cover the cost of long-term services such as personal care, supervision, and assistance with daily activities. Unlike health insurance or Medicare, it pays for care in settings like your home, an assisted living facility, or a nursing home. This coverage protects your savings from high out-of-pocket costs and helps reduce the emotional and financial burden on your family.
LTC insurance explained >
What are the best long-term care insurance companies?
The best long-term care insurance companies are financially strong, highly rated, and offer flexible benefits that match your personal needs and budget. There’s no one-size-fits-all solution. What’s best for one person may not be right for another. A licensed Long-Term Care Advisor can help you compare top-rated carriers and design a plan that fits your goals.
Best LTC insurance companies >
Should I self-insure for long-term care?
Self-insuring means setting aside personal savings to cover future long-term care expenses. While this approach gives you control, it may not be the most efficient use of your money. Consider the following comparison using a $100,000 investment:
Option 1 – Invest the $100,000:
If you invest $100,000 at a 7% annual return, it could grow to about $387,000 in 20 years. However, those gains may be taxable, depending on your investment vehicle. And if care is needed sooner, the full amount may not be available.
Option 2 – Purchase a Long-Term Care Annuity:
Placing the same $100,000 into a long-term care annuity provides $407,340 in immediate LTC coverage. After 20 years, that benefit grows to $574,592, and is tax-free if used for care. If care is never needed, your heirs receive a $142,265 tax-free death benefit.
(Example based on OneAmerica Indexed Annuity Care, male, age 60, AZ)
Explore long-term care annuity options
Bonus Tip: Some LTC annuities offer unlimited benefits, allow funding through a tax-free 1035 exchange, or can be purchased using IRA funds with proper structuring.
How much does long-term care insurance cost?
Long-term care insurance is often more affordable than people expect. Premiums vary based on your age, health, benefit amount, and policy design. In many cases, annual premiums cost less than a single month of long-term care services paid out-of-pocket.
Below are sample monthly premium rates for a policy with $165,000 in level benefits (no inflation growth), based on select health underwriting. Rates will be lower for applicants in preferred health and higher for those with medical conditions.
Cost of Long-Term Care Insurance by Age | |||
| Age 55 | Age 60 | Age 65 | |
| Male | $79 | $98 | $142 |
| Female | $125 | $158 | $225 |
| Couple | $173 | $217 | $313 |
For the same applicants, adding 3% annual inflation protection increases your long-term care benefits over time, helping them keep pace with rising care costs. Below are the average monthly premiums for a policy with 3% annual inflation growth:
| Age 55 | Age 60 | Age 65 | |
| Male | $185 | $294 | $261 |
| Female | $308 | $358 | $439 |
| Couple | $419 | $483 | $596 |
Plan Types, Eligibility & How It Works
There are several types of long-term care insurance plans to choose from, and the right option depends on your age, health, financial goals, and coverage needs. A licensed Long-Term Care Advisor can help you compare plans and recommend the best fit for your situation.
Common long-term care insurance options include:
- Traditional Long-Term Care Insurance – Standalone policies that pay benefits when you need care.
- Life Insurance with Long-Term Care Riders – Combines life insurance with the ability to use the death benefit for care expenses.
- Long-Term Care Annuities – Tax-advantaged annuities that multiply your benefit amount if used for care.
- Short-Term Care Insurance – Lower-cost plans that offer limited coverage for shorter care needs.
Eligibility for long-term care insurance depends primarily on your age and health history. While many people with pre-existing conditions can still qualify, certain conditions such as Alzheimer’s, Parkinson’s, or already needing care may lead to disqualification.
If you’re declined for traditional coverage or are looking for a more affordable option, short-term care insurance may offer a flexible alternative, especially for older applicants or those with medical conditions.
Long-term care insurance is different from health insurance. It’s specifically designed to pay for extended care services, including custodial care. This care can be provided in your home, an assisted living facility, or a nursing home.
When you buy a policy, you choose a benefit amount, such as $250,000, $500,000, or $1 million, which determines how much coverage you’ll have for future care needs.
Long-term care insurance is sold by licensed professionals, including insurance agents, brokers, and financial advisors. However, working with a specialized Long-Term Care Advisor offers key advantages. These specialists bring deep expertise in policy design, health underwriting, product comparisons, and claims support, helping you navigate benefit options, pricing, and eligibility more effectively.
While some people rely on their financial advisor for long-term care planning, it’s often not their primary focus. As a result, they may work with fewer insurance companies and offer a limited range of plans. To ensure clients get the most competitive coverage, many financial advisors choose to partner with long-term care insurance specialists.
Hybrid long-term care insurance combines traditional long-term care coverage with either life insurance or an annuity. These policies offer long-term care benefits if you need care, and if you don’t, they provide a tax-free death benefit to your beneficiaries.
Many hybrid plans also feature guaranteed premiums that never increase, making them a predictable way to protect both your care needs and your legacy.
While not everyone likes the idea of buying insurance, the alternatives are often less practical, or more costly.
- Relying on family may not be feasible. An aging spouse might be physically unable to provide care, and adult children are often busy with careers and raising families of their own.
- Self-funding requires setting aside a significant amount of money. Given the rising cost of care and inflation, this option can be expensive and may not stretch as far as expected.
- Doing nothing is the riskiest option. Many people underestimate their chances of needing care, but the odds are high. Without a plan, the burden of care often falls unexpectedly on family members.
Long-term care insurance offers a structured, affordable way to prepare, helping protect your assets and your loved ones from the impact of future care needs.
General Long-Term Care FAQs
Long-term care refers to the support and services needed when a person can no longer manage personal care or daily activities on their own. These activities include bathing, dressing, eating, toileting, walking, and transferring.
This type of help is called custodial care, and it’s not covered by Medicare. Long-term care can be provided at home, in an assisted living facility, or in a nursing home, depending on the level of support required.
According to the U.S. Department of Health and Human Services, about 70% of people turning age 65 today will need some form of long-term care during their lifetime.
On average, women need care for 3.7 years, while men need care for 2.2 years. Across the population, the average duration of long-term care services is approximately 3 years.
The national median cost for a private room in a nursing home exceeds $108,000 per year, and that number continues to rise due to inflation and increasing demand for care. Costs vary significantly by state, with some exceeding $150,000 annually.
As 10,000 Baby Boomers turn 65 each day through 2030, demand for long-term care services is expected to surge, making planning even more essential.
Long-Term Care Insurance & Taxes
Yes, long-term care insurance premiums are tax deductible under current federal tax laws 
. The amount you can deduct depends on your age and whether you itemize deductions on your tax return.
For self-employed individuals, eligible long-term care premiums may be 100% tax deductible when the business pays for policies covering the owner, spouse, or dependents.
Yes, group long-term care insurance premiums are 100% tax deductible for C-Corporations. Other business structures, such as S-Corps, LLCs, and partnerships, may also receive partial deductions, depending on how the premiums are paid and who is covered.
Employers can use group LTC policies to provide valuable coverage for key employees, owners, and even family members, often with favorable tax treatment.
Several states are exploring a payroll tax or income tax to fund public long-term care programs, unless you own a qualified private long-term care insurance policy. This trend follows Washington State, which implemented a long-term care tax for workers who do not have private coverage.
While no national mandate exists, state-level proposals are gaining momentum. Staying ahead by securing a qualified policy may help you avoid future taxes and ensure you have personal coverage in place.
Work With a Long-Term Care Insurance Specialist
Get expert guidance to compare options and find the best fit for your needs.
We compare top insurers because premiums and benefits vary. Get the clarity you need to choose the right long-term care insurance plan.
Last updated: February 16, 2025
Written by: Craig Matesky, President, ACACIA Insurance
Reviewed by: Mike Berger, National Sales Manager