What is long-term care insurance?

With so many financial products and services on the market currently, it can be difficult to determine which ones are valuable and which just appear that way. This is particularly true for insurance policies, which can cover everything from your home and car to your dog and nursing home. 

For seniors and older adults, the possibilities can seem endless. Life insurance (and its various types), Medicare supplemental insurance and long-term care insurance can all be valuable in their own unique ways. But budgets are limited and not every insurance type will be worth it for every person.

Long-term care insurance, however, can be a great resource for many seniors and older adults. To determine its potential value, it's important to first know what it is and what it costs.

Start by exploring your long-term care insurance options here now to learn more.

What is long-term care insurance?

Long-term care insurance is a specialized type of insurance that seniors and older adults can purchase to help cover the costs of an in-home caretaker and outside facilities like nursing homes and assisted living facilities. Medicare and regular health insurance typically won't cover these types of services, but long-term care insurance can. 

These policies operate just like most of your other insurances. You'll pay monthly premiums and then make claims for coverage as needed. 

"You can choose a little coverage or a lot to help pay for services in or out of your home," the AARP notes. "Typical policies spell out how much you can receive daily or monthly, up to a lifetime maximum or a certain number of years. Different amounts may be allowed for care in your home, a nursing home or elsewhere. You pay extra for benefits that rise over the years to protect you from inflation."

"Long-term care insurance policies reimburse policyholders a daily amount (up to a pre-selected limit) for services to assist them with activities of daily living such as bathing, dressing, or eating," longtermcare.gov, a federal website, explains. "You can select a range of care options and benefits that allow you to get the services you need, where you need them."

Create the perfect long-term care insurance plan for your needs here today.

How much does long-term care insurance cost?

Long-term care insurance costs vary significantly based on the applicant and the provider. The cost for a 55-year-old single male last year was $950, according to data from the American Association for Long-Term Care Insurance. That's for $165,000 worth of benefits. 

But that price ticks up for a woman. A 55-year-old single female averaged around $1,500 in 2022 for the same level of coverage. When it comes to long-term care insurance, the price for women is typically higher than it is for men as they have longer life expectancies and, thus, are expected to need more care over an extended period.

That all being said, the above figures are just estimates. You may pay more or less depending on factors like age, health, coverage requested and provider. Want to find out exactly what a long-term care insurance plan could cost you? Find out here now.

The bottom line

Long-term care insurance can provide valuable coverage for seniors and older adults who need help paying for in-home caretakers or nursing homes and assisted living facilities. Prices vary based on your personal profile, coverage type and provider, so it pays to shop around to find the best plan for your needs. By doing so, you'll put yourself in a safer financial position to better enjoy your golden years.