Long-term care (LTC) insurance is a type of policy that can help you cover the costs of extended care as you age and require assistance with everyday activities. It can also protect your assets — and those of your loved ones — against the rising costs of care and help you pay for the type of services you want, whether that’s in-home care, nursing home care or something in between.
According to government statistics, 70% of people over the age of 65 will require some form of ongoing care and support later in life. However, less than one-third of Americans over 50 have begun saving for these types of expenses. An LTC insurance policy can help those individuals prepare financially for future care costs.
If you’re thinking about buying long-term care insurance, our top picks for the best long-term care insurance providers can help you get started. Keep reading to find out more.
Our Top Picks for the Best Long-Term Care Insurance Companies
- Nationwide: Best for Policy Customization
- Mutual of Omaha: Best for Stand-Alone LTC Insurance
- New York Life: Best for Financial Stability
- Northwestern Mutual: Runner-Up for Financial Stability
- GoldenCare Insurance: Best for Comparing Multiple Providers
Best Long-Term Care Insurance Reviews
Why we chose it: We chose Nationwide as the best long-term care insurer for policy customization because its CareMatters® II plan is one of the best hybrid policies available. Its numerous terms and customizable design makes it stand out from its competitors.
CareMatters® II is a flexible hybrid policy tied to a fixed-premium universal life insurance plan that will pay out a guaranteed minimum death benefit — even if you receive long-term care. Unlike other LTC policies, which require you to pay out of pocket and submit a claim for reimbursement, CareMatters® II pays cash benefits, so you can avoid all the monthly paperwork and have more spending options. For example, you are free to hire an unlicensed caregiver (like a family member or friend) and use the cost difference for other expenses.
Couples looking for long-term care coverage can opt for Nationwide’s CareMatters Together℠ plan, which offers a shared pool of benefits that can be used by either spouse or partner. For example, if a couple buys a policy with 6 years of shared benefits and one spouse needs care for one year, the other spouse would still have five years of coverage remaining.
Regardless of which of these products you choose, you have the option of funding the policy through a one-time payment or monthly or annual payment for 5 years, 10 years or up to a specified age. And the plans’ benefit period options range from two to seven years. As an alternative to LTC insurance policies, Nationwide also offers an LTC rider that can be added to various life insurance policies, presumably permanent ones.
Nationwide is one of the largest insurers in the United States and was ranked among the best for customer satisfaction in J.D. Power’s 2022 U.S. Life Insurance Study. Additionally, the National Association of Insurance Commissioners (NAIC), a regulatory organization, reports the company has a low complaint index.
Read Nationwide Long-term Care Insurance Review
Why we chose it: Mutual of Omaha is our choice for the best long-term care insurer for stand-alone LTC policies because it’s one of just six companies currently offering stand-alone long-term care plans. Moreover, it’s the only insurer on our list offering two such policy options — and they are both customizable.
Mutual of Omaha offers two stand-alone long-term care plans. Stand-alone, also known as “traditional,” LTC policies tend to be more affordable than hybrid insurance products or life insurance policies with an added LTC rider. These policies can be a good option for those solely interested in covering future long-term care expenses — without spending more than they need to.
The two stand-alone policy options are MutualCare Custom Solution and MutualCare Secure Solution, which include:
- Monthly benefits from $1,500 to $10,000
- Elimination periods between 0 and 365 calendar days
- Policy limits from $50,000 to $600,000
- Waiver of premium benefit
- Optional benefits such as inflation protection, return of premium and shared care
Mutual of Omaha offers stackable discounts that apply to both stand-alone LTC policy options. That could translate into considerable savings if you qualify for more than one discount. For example, the company extends a 15% discount to partners who purchase a policy together and a 5% discount to married customers whose partners aren’t under the same policy. If you qualify for either of these discounts, you can get an additional 15% off for being in good health.
Mutual of Omaha participates in the Long Term Care Partnership Program in 43 states, more than any other private insurer. If you live in one of these states and purchase a partnership-qualified policy, you get dollar-for-dollar asset protection if you later continue benefits under Medicare. Typically, you’re required to spend down your assets and savings to a state-mandated level to be eligible for Medicaid. But with a partnership plan, you can keep a portion of your assets equal to the amount of coverage purchased while still qualifying for Medicaid benefits.
Mutual of Omaha also earns consistently high customer satisfaction ratings. It ranked third in J.D. Power’s 2022 U.S. Life Insurance Study and has a solid A+ financial strength rating from AM Best.
Read Mutual of Omaha Long-Term Care Insurance Review
Why we chose it: We chose New York Life as the best long-term care insurance company for financial stability because policyholders don’t have to worry about the company’s ability to pay claims. New York Life has strong financial ratings AM Best (A++) as well as Fitch (AAA), Moody’s (Aaaa) and Standard & Poor’s (AA+).
New York Life is our pick for the best long-term care insurer for financial stability. It has superior financial ratings — the third-highest of any insurance company on our list, regardless of type — and is one of the nation’s oldest mutual insurance providers. The company also ranks above industry average in J.D Power’s 2022 U.S. Individual Life Insurance Study.
New York Life offers two long-term care insurance options: stand-alone LTC policies and a hybrid long-term care and life insurance policies. Maximum daily benefits range from $50 to $400 per day and waiting periods between 0 and 365 days. You can choose a benefit period of two, three, five, seven or 10 years.
Read New York Life Long-Term Care Insurance Review
Why we chose it: We chose Northwestern Mutual as our runner-up for financial stability because three out of four credit rating agencies award it top financial strength ratings, and the fourth gives it its second-highest grade. Such stability signals to policyholders that their money is well-invested and the insurer will likely be able to make claim payments in the future.
Northwestern Mutual makes our list thanks to its superior financial strength and above-average customer service rankings. It also has a remarkably low complaint index for long-term care policies, according to the NAIC’s National Complaint Index Report, and ranks fourth in J.D Power’s 2022 U.S. Individual Life Insurance Study.
Northwestern’s QuietCare traditional long-term care policy lets you select a maximum monthly benefit from $1,500 to $12,000 in $100 increments. It also lets you choose between four elimination period options: six, 12, 25 or 52 weeks.
One major drawback of this policy is that it will only cover services offered by providers approved by the plan, and not all approved care providers are certified in every state.
Read Northwestern Mutual Long-Term Care Insurance Review
Why we chose it: We chose GoldenCare as the best long-term care insurance option for comparing multiple providers because it partners with 18 well-known insurance carriers to help match customers with companies that can meet their needs. You can get multiple quotes in one place, and a Golden Care agent can guide you through the process.
As an online insurance broker, GoldenCare partners with some of the most prominent long-term care insurance providers to help customers find the best options for their needs.
GoldenCare currently partners with 18 insurers (some of which are part of our top picks), including Mutual of Omaha, Transamerica, Aetna, Thrivent, Securian Financial, OneAmerica and National Guardian Life Insurance Company.
The company matches clients with a long-term care specialist who will work on their care plan and recommend the insurer that best aligns with their situation. GoldenCare also offers various insurance products for Medicare clients.
For those who don’t qualify for long-term care insurance because of a pre-existing condition, GoldenCare offers critical illness insurance policies. A critical illness policy may cover loss of income, co-pays, rehabilitation, travel, lodging, home modifications and medical equipment such as wheelchairs and portable oxygen.
Read GoldenCare Long-Term Care Insurance Review
Other long-term care insurance companies we considered
While the following carriers didn’t make our list of top long-term care insurance companies, they offer LTC coverage and with attractive features.
OneAmerica (State Life Insurance Company)
OneAmerica is a financial services and mutual insurance company specializing in life insurance and annuity products. It offers hybrid life insurance policies and annuity plans with LTC benefits. It didn’t make our list because of its relatively high NAIC complaint ratio and low financial strength ratings.
Read OneAmerica Long-Term Care Insurance Review
Brighthouse Financial is an insurance company specializing in annuities and life insurance policies. It sells an indexed universal life insurance policy called SmartCare that provides long-term care benefits through riders; it does not sell stand-alone LTC policies. Brighthouse Financial’s limited selection of long-term care products, below-average customer satisfaction score, relatively low AM Best rating and high NAIC complaint ratio disqualified it from our main list.
Lincoln Financial Long-Term Insurance
Lincoln Financial offers two hybrid life and long-term care insurance policies with unusually high maximum issue ages (up 80 years of age). However, the applicant must be in good health and meet other underwriting criteria (which may include income or asset requirements). Despite its attractive product offerings and great financial strength ratings, Lincoln Financial’s score on the latest J.D. Power U.S. Life Insurance Study was 764/1000, ten points below the industry average.
Read Lincoln Financial Long-Term Care Insurance Review
Transamerica is a financially stable insurer offering a great selection of life insurance policies and riders. However, its low J.D. Power score and high NAIC complaint ratio kept it out of our top picks. Moreover, it no longer issues long-term care insurance policies, and its LTC rider cannot be added to all of its life insurance products.
Read Transamerica Long-Term Care Insurance Review
California Long Term Care Insurance Services (CLTC)
California Long Term Care Insurance Services, also known as CLTC Insurance Services, is an independent insurance brokerage that specializes in selling long-term care insurance and related products in the state of California. Since CLTC’s services are limited to one state, it did not make our main list.
Long-Term Care Insurance Guide
According to the Administration of Community Living (ACL), a branch of the U.S. Department of Health and Human Services, most people over 65 will require long-term care sometime in their lives. This statistic is especially relevant to women, as they tend to outlive men by about five years and are more likely to require care for longer.
Despite these statistics, long-term care insurance isn’t as widely known as other types of insurance. Keep reading to understand how long-term care insurance works, how much it costs and what services are eligible for coverage.
What is long-term care insurance?
Long-term care insurance can help offset the cost of long-term care. These policies can cover or reimburse you the cost of an adult daycare center, nursing home or assisted living facility if you have a cognitive impairment or can’t perform two or more Activities of Daily Living (ADL) without assistance. ADL include:
- Toileting (using the bathroom)
- Transferring (e.g., from chair to bed)
How does long-term care insurance work?
LTC insurance works similarly to a health insurance policy in that you pay a lump sum or monthly premium and the policy will cover qualifying expenses once you require care. However, unlike most health insurance policies, an LTC policy is intended to cover chronic health conditions that last a year or more.
A healthcare provider must prescribe long-term care assistance for your insurance policy to cover the services.
Here are some points about how long-term care insurance works:
- Coverage: It pays for assisted living or nursing facilities or in-home care.
- Benefits: Benefits commence when you have a cognitive impairment or can’t perform two or more of the six activities of daily living (ADL).
- When to buy: To get the best rates, get a policy in your 50s or 60s and while you are in good health.
- Disbursement: Companies pay benefits to cover the cost of long-term services either daily, weekly or monthly.
- Premium: The cost of a policy depends on many factors, but average monthly premiums are $75 per month.
How do long-term care insurance state partnership plans work?
The Long Term Care Partnership Program is an initiative between state governments and private insurers that aims to promote the purchase of private long-term care insurance policies. It also offers policyholders a way to protect their assets so they don’t have to spend down their savings to qualify for Medicare.
You see, to be eligible for Medicaid, you must meet the income and asset limits determined by your state. If you exceed those limits, you must spend down your assets to qualify for Medicare. But if you purchase a partnership-qualified policy, you get dollar-for-dollar asset protection. So, for every dollar you spend in long-term care coverage, you get to protect a dollar of your assets from that spend-down requirement.
For example, if you purchase $100,000 worth of long-term care coverage, Medicaid will disregard an additional $100,000 in personal assets when calculating your eligibility.
Medicaid partnership programs may also protect participants’ assets from Medicaid’s estate recovery program.
What does long-term care insurance cover?
Long-term care benefits cover the following services:
- Custodial care: Refers to assistance with daily living activities such as bathing, dressing and eating. The caregiver doesn’t need to be licensed
- Skilled nursing: Defined as care provided by a licensed medical professional
Medical and non-medical services may be provided in a variety of settings, such as:
- Assisted living facilities
- Nursing homes
- The beneficiary’s home
The policy may also cover the following more specialized services:
- Hospice care
- Respite care
- Alzheimer’s and dementia care
- Family member training, medical equipment and home modifications
Types of long-term care insurance
There are two main kinds of LTC insurance policies: stand-alone and hybrid. Understanding the differences between these policies can help you make the right decisions for you and your loved ones.
Stand-alone long-term care insurance policies
Stand-alone or traditional long-term care insurance policies can reimburse you for some of the cost of the care you receive at home, at a nursing home or in a residential care facility. This type of policy offers some flexibility regarding the kind of care you receive, and when and where you receive it.
Generally, stand-alone long-term care insurance policies provide a monthly benefit amount paid out during a benefit period. Benefit periods typically range from two to five years, and the plan disburses the benefits after an elimination period ranging from 30 to 90 days.
You may add riders to your LTC policy that increase or modify coverage. For example, a popular rider for long-term care coverage is inflation protection, which prevents your benefit from losing value as the cost of living increases.
Hybrid long-term care insurance policies
Hybrid long-term care policies typically combine two types of coverage: a life insurance policy or a qualifying annuity and a long-term care rider.
The advantages of a hybrid life/long-term care insurance policy include:
- The policy will pay out a death benefit to your beneficiaries if you don’t use the long-term care insurance benefits.
- Premium payments are guaranteed to stay the same over the life of the policy.
- Underwriting is less strict, and pricing for women could be lower (a life insurance medical exam is still required, though).
- If you decide you need the money for something else, you can typically surrender your policy and receive the cash value it has accumulated over time. Alternatively, some policies refund you a portion of the premiums you paid.
But hybrid long-term care insurance policies also have drawbacks, at least for some:
- Premiums for hybrid policies can be much higher than for stand-alone LTC insurance.
- Buying life insurance later in life is much more expensive than buying when you’re younger and healthier.
Ultimately, the choice to purchase a stand-alone policy or a hybrid one will depend on your personal and financial goals. An insurance agent can guide you toward the best life insurance option for your long-term care needs.
Comprehensive and non-comprehensive long-term care insurance policies
Comprehensive and non-comprehensive long-term care insurance policies are two types of coverage designed to help individuals cover the costs associated with long-term care services.
- Comprehensive long-term care insurance policies provide coverage for many different care settings, including nursing home care, assisted living facility care, adult daycare, home healthcare and hospice care. This ensures your needs are met, no matter where you receive care.
- Non-comprehensive long-term care insurance policies cover the costs associated with nursing home care or care received in assisted living facilities. While the premiums may be more affordable than comprehensive policies, you may pay more out-of-pocket for non-covered care.
Pros and cons of long-term care insurance
How much is long-term care insurance?
The cost of long-term care insurance can be very high, depending on your circumstances. Cost-determining factors include your age, health status, the type of coverage you need and whether you buy a policy with level benefits or inflation protection.
According to the 2023 Long-Term Care Insurance Price Index published by the American Association for Long-Term Care Insurance (AALTCI), the monthly premium for a policy with $165,000 in level benefits could range between $75 and $225. And policyholders who want their long-term care insurance benefits to grow annually and keep up with inflation should expect to pay twice as much.
The age at which you enroll is crucial in determining policy costs. A single man purchasing a plan with $165,000 in level benefits could expect to pay $900 annually at age 55. At age 65, he could expect to pay $1,700 per year for the same policy. That’s a whopping 89% premium increase.
Average costs of long-term care services
Long-term care costs increase annually. National Health Expenditure Data from the Centers for Medicare & Medicaid Services reveals the average cost of assisted living facilities is projected to grow at a rate of 4.7% annually until 2030. Home health care costs, on the other hand, are expected to grow at an average rate of 7% each year.
According to Genworth’s Cost of Care Survey, homemaker services cost an average of $163 per day, while home health aide services cost $169 per day. Assisted living costs are relatively lower, with an average daily expense of $78 for adult day care and $148 for assisted living facilities.
This chart shows the average annual costs of typical long-term care options:
Long-term care insurance in California
According to the National Association of Insurance Commissioners (NAIC), California has the largest number of consumer protections for long-term care (LTC) insurance. These protections include a rate stabilization law and the inflation protection requirement. Under the rate stabilization law, the California Department of Insurance reviews all premium rates and increases are subject to additional review and justification requirements.
In anticipation of rising LTC costs, California also requires all long-term care policies to have inflation protection. Given that long-term care services that cost $400 per day in 2023 are likely to cost $1,002 per day in twenty years, inflation protection is an important benefit.
Long-term care insurance cost factors
How to choose the best long-term care insurance
The best long-term care insurance policy for you will depend on your needs and priorities. With that in mind, make sure your long-term care preferences are well-defined and you have shared your concerns and wishes with loved ones before starting your search.
Once you’ve defined your needs, shop around and compare policies from at least three insurance companies to get the best price for the type of coverage you want.
When comparing policies, consider the following:
- Coverage amount: Most long-term care insurance policies have daily benefit maximums as well as lifetime maximums. Consider how much coverage you would need to pay for the type of care you want to receive. Of course, a higher coverage amount will mean a higher premium.
- Benefit triggers: Each policy will specify the conditions that must be met before the policy starts paying benefits. Most require a medical professional to certify the insured is unable to perform two or three activities of daily living (ADL) for coverage to kick in. Some plans also cover cognitive impairment (think Alzheimer’s) but may exclude other types of medical incapacity.
- Benefit period: The benefit period is the length of time your policy will pay out. According to the Insurance Information Institute (III), the benefit period can range from two years to a lifetime. Opting for a longer benefit period will increase your premium.
- Covered care settings: Read the coverage details carefully to determine whether the policy will pay out the same benefit amount regardless of where care takes place. The III states some policies may pay out half as much per day if the policyholder elects in-home care.
- Waiting or elimination period: How long must you wait before your policy begins to pay benefits? The longer the waiting period, the higher your out-of-pocket expenses. Yet a policy with a shorter waiting period will generally cost more.
- Reimbursement or indemnity model: Most policies will reimburse you for up to a certain amount for qualified long-term care expenses. Under some policies, if you spend less than the allotted monthly benefit amount, the difference can be used to extend your benefit period. Other policies, however, work on an indemnity basis, paying out the exact amount and allowing you to spend any cost difference as you see fit.
- Inflation growth option: Inflation protection riders allow your benefit to compound at a fixed percentage year-over-year to keep up with rising costs of care. Adding this and other riders to your policy will increase its cost.
Alternatives to long-term care insurance
If private insurance isn’t the right solution for you, there are a few other long-term care alternatives available.
Medicare and Medicaid
As a joint federal and state public insurance program for low-income Americans, Medicaid is the largest public payer of long-term care services. Eligibility for the program is strictly needs-based. If you didn’t qualify for it in the past, you may qualify now or in the future if you have spent a significant portion of your assets paying for care. Contact your state’s Medicaid office for more information on eligibility.
Medicare, on the other hand, does not cover extended nursing home stays. The program covers costs related to illnesses and injuries and will help pay for up to 100 days of rehabilitation or skilled nursing care after a major health issue, based on a doctor’s recommendation.
U.S. Department of Veterans Affairs (VA)
The VA offers a Veterans Aid & Attendance Pensions Benefit, which provides qualified veterans and surviving spouses an additional monthly amount on top of their pension if they are housebound or require help with ADLs. The benefit is tax-free and can be used for in-home, assisted living or nursing home care.
To qualify, the veteran must receive a VA pension and meet at least one of the following requirements:
- Need help in performing daily living activities
- Be bedridden due to an illness
- Receive services at a nursing home due to a disability
- Have limited eyesight even with glasses or contact lenses
Life insurance with accelerated death benefits
Adding an accelerated death benefit (ADB) rider to your life insurance policy allows you to access a portion — typically up to 50% — of the death benefit while you are living. Whatever you receive will be subtracted from the money disbursed to your beneficiaries upon your death, but you can use those funds to cover the cost of long-term care services. To qualify for benefits under an ADB, you must be diagnosed with a chronic or terminal illness.
Using an ADB to cover long-term care costs has advantages and disadvantages. On the plus side, any unused funds will go to your beneficiaries. The drawbacks are that the payout is usually lower than you would receive from a dedicated long-term care insurance policy and it could impact your Medicaid eligibility.
People with plenty of money saved for retirement can likely cover long-term care costs without help. Alternatively, those who own their home may be willing to sell it to cover residential care costs.
The best tools to build a nest egg for retirement are long-term investment plans such as 401(k) or IRA accounts. However, one of the best high-yield savings accounts could also be a good option if you have a low risk tolerance or want an additional emergency fund.
If you have a health savings account (HSA), you may be able to claim a large portion of medical expenses associated with long-term care. Those 55 and older are allowed an additional $1,000 for “catch-up” contributions above the 2023 HSA individual contribution limit of $3,850.
Latest News About Long-Term Care Insurance
A recent study suggests that over half of respondents who own a policy don’t know what long-term care insurance covers. Many mistake LTC insurance with long-term disability or health insurance. Of course, long-term care insurance covers services that neither health nor disability insurance do. If your parents don’t already own a policy, consider that LTC insurance can protect your inheritance while improving their quality of life.
Shrinking Social Security benefits, disappearing pensions, longer lifespans and macroeconomic factors have created uncertainty for today’s retirees. Given this scenario, some adults have an extra retirement to pay for: their parents’.
Last year’s economic environment set the stage for a super-sized rise in government payments. Because inflation is cooling, experts have since warned that Social Security beneficiaries shouldn’t expect another record-high COLA. Social Security recipients may only get a 3.1% raise in 2024 due to lower inflation rates.
How We Chose The Best Long-term Care Insurance Companies
We conducted a comprehensive analysis of various insurers offering long-term care insurance policies. To evaluate them, we used the following criteria:
- Cost – We compared the average annual cost of long-term care insurance against the current average cost of long-term care. We also took into account projected future increases to the cost of care in order to narrow down on policy features that safeguard consumers’ investments in LTC insurance.
- Customer service – To check each company’s responsiveness and accessibility, we combed through online customer reviews and contacted the companies to request additional information.
- Financial Stability – A company going out of business could leave you without coverage. To gauge financial stability, we examined each company’s A.M. Best and Standard & Poor’s financial strength ratings.
- Inflation protection – As the costs of care steadily increase year-over-year, we prioritized companies offering inflation protection. This optional add-on increases the benefit amount each year, typically by a fixed percentage, so your investment isn’t eroded by rising costs.
- Customer satisfaction – We considered customer satisfaction ratings from J.D. Power’s 2022 Individual Life Insurance Study and picked companies with the highest ratings.
- NAIC complaint index – We checked the National Association of Insurance Commissioners’ (NAIC) website for the complaints filed against each company. We prioritized insurers with low complaint ratios.
Summary of Money’s Best Long-term Care Insurance of October 2023
- Nationwide: Best for Policy Customization
- Mutual of Omaha: Best for Stand-Alone LTC Insurance
- New York Life: Best for Financial Stability
- Northwestern Mutual: Runner-Up for Financial Stability
- GoldenCare Insurance: Best for Comparing Multiple Providers