Is long-term care insurance worth it?

As we age, the prospect of needing long-term care services becomes a significant concern. These types of services are designed to meet the health and personal care needs of those who can no longer perform essential daily activities on their own due to illness, disability or aging. But as crucial as these services can be, they are also quite costly.

Medicare may cover some long-term care expenses, but it typically doesn't cover the costs associated with extended long-term care services. That's where long-term care insurance comes in. This type of policy is designed to help cover the costs associated with a range of services and support needed when a person cannot independently perform activities of daily living (ADLs) — or when a person requires ongoing assistance due to chronic illness, disability or the natural aging process. 

But while this type of policy can help cover the costs of long-term care expenses that Medicare won't, is long-term care insurance worth it for seniors?

Explore your long-term care options and get a price quote here.

Is long-term care insurance worth it?

In order to determine whether long-term care insurance is worth it, it's important to understand what long-term care entails. Long-term care services can include assistance with activities of daily living (ADLs), such as bathing, dressing, eating and transferring, as well as services like skilled nursing care, physical therapy and occupational therapy. 

These services can be provided in various settings, including nursing homes, assisted living facilities and even in your own home. But, as you may imagine, this type of care comes at a high cost — and can quickly deplete your savings and assets. According to the Genworth 2021 Cost of Care Survey, the national median cost for a private room in a nursing home is over $108,000 per year. And, the monthly cost for assisted living is about $4,500 on average.

Many seniors assume that Medicare will cover the cost of their long-term care needs. And while Medicare does provide some coverage for skilled nursing care and short-term rehabilitation, it has limitations. 

For instance, it typically only covers up to 100 days of skilled nursing care following a hospital stay, and it does not cover custodial or non-skilled assistance with ADLs. If you want more coverage, you may need to purchase a long-term care policy to fill in the gaps.

But how can you decide whether this type of policy is worth it? There are some of the potential benefits and other factors to consider to determine whether a long-term care insurance policy makes sense for you.

Learn more about your long-term care insurance options here.

The benefits of long-term care insurance

Here are some of the potential benefits of this type of policy:

• Financial security: Long-term care insurance can help protect your savings and assets from being depleted by long-term care expenses. In turn, it can provide a financial safety net for you and your family.
• Choice and control: With long-term care insurance, you have the flexibility to choose the type of care and where you receive it, whether it's at home, in an assisted living facility or in a nursing home.
• Relieving family burden: Having long-term care insurance can alleviate the burden on your family members who might otherwise need to provide care or cover the expenses themselves.
• Preserving independence: Long-term care insurance can help you maintain your independence and quality of life by ensuring you have access to the care you need.

Other factors to consider

While long-term care insurance can be valuable, it may help to consider a few other factors before purchasing a policy:

• Cost: Long-term care insurance premiums can be expensive, and they tend to increase with age. It's crucial to assess whether you can comfortably afford the premiums.
• Health status: Your current health and medical history can affect your eligibility for long-term care insurance and the cost of your premiums.
• Policy coverage: Be sure to understand the specific services and benefits covered by the policy, as well as any limitations, waiting periods and elimination periods.
• Alternatives: Explore alternative options for covering long-term care costs, such as self-funding, using existing assets or considering a hybrid life insurance policy with a long-term care rider.

The bottom line

So, is long-term care insurance worth it for you? The answer depends on your individual circumstances, including your financial situation, health and preferences. While it can be a valuable tool for protecting your assets and ensuring access to quality care, it's essential to carefully evaluate your options to make an informed decision.