Best Long-Term Care Insurance: Key Factors to Consider

Nobody can predict the future, but we can do our best to plan for various outcomes. As you get older, obtaining long-term care insurance becomes an excellent financial planning move, as more than 70% of Americans over age 65 will likely need some long-term assistance in their lifetime.

The best long-term care insurance policies can help secure your finances if you need in-home care or to move to an assisted care, nursing home, or hospice facility. 

There are several providers to choose from, and the types of coverage vary. In this article, I explain how long-term care insurance works and share five insurance companies offering long-term care policies with you.

Table of Contents
  1. Different Types of Long-Term Care Insurance
  2. How Much Are Long-Term Care Insurance Premiums?
  3. When Does Long-Term Care Kick In?
  4. What Is the Best Long-Term Care Insurance?
    1. Best for Financial Strength: New York Life
    2. Best For Discounts: Mutual of Omaha
    3. Best for Plan Options: Northwestern Mutual
    4. Best for Customer Satisfaction: Nationwide
    5. Best for No Waiting Period: Lincoln Financial
    6. How many companies offer traditional long-term care insurance?
    7. When Is the best time to buy long-term care insurance?
    8. How do you compare long-term care insurance plans?
  5. The Bottom Line on Long-Term Care Insurance

Different Types of Long-Term Care Insurance

There are three different types of long-term care insurance available to the general public:

  • Traditional long-term care insurance: Provides the most extensive long-term care coverage benefits. It only provides long-term care protection, the best option if you already have life insurance and retirement savings. Its premiums can also be the most expensive, and only a handful of companies offer this coverage option. 
  • Hybrid long-term care and life insurance: Some companies offer a combination policy with long-term care coverage and a guaranteed death benefit. It can be more affordable than traditional coverage but more extensive than buying a life insurance rider. 
  • Life insurance with a long-term care rider: It may also be possible to purchase a long-term care rider that taps your death benefit to cover long-term care expenses. However, your coverage benefits can be less than with a traditional care policy. That said, your premiums are often the most affordable with this option.

Fewer than a dozen companies now offer traditional coverage, and most have moved to the hybrid or life insurance rider model. You can purchase coverage from the best long-term care insurance companies online or by speaking with an agent. 

Nowadays, many states are considering government-sponsored coverage as fewer individuals enroll due to rising premium costs and changing household spending habits. Washington State is the first to collect a long-term care tax for its WA Cares Fund.

Additionally, your employer may offer a discounted workplace plan to provide peace of mind during your working years. However, you may need to purchase an independent policy that stays with you once you retire or switch employers. 

Finally, Medicaid recipients can be eligible for long-term coverage benefits, but income requirements apply. These perks are not available to regular Medicare enrollees.

How Much Are Long-Term Care Insurance Premiums?

The American Association of Long-Term Care Insurance (AALTCI) estimates the annual premium for up to $165,000 in level traditional long-term care benefits for 2023:

  • 55 years old with no benefit growth: $900 (male), $1,500 (female), $2,080 (combined)
  • 55 years old with 1% annual benefit growth: $1,295 (male), $2,100 (female), $3,000 (combined)
  • 60 years old with no benefit growth: $1,200 (male), $1,960 (female), $2,550 (combined)
  • 60 years old with 1% annual benefit growth: $1,640 (male), $2,650 (female), $3,425 (combined)
  • 65 years old with no benefit growth: $1,700 (male), $2,700 (female), $3,750 (combined)
  • 65 years old with 1% annual benefit growth: $2,165 (male), $3,400 (female), $4,735 (combined)

Like most insurance products, premiums for new policies cost more if you’re older. For example, long-term care premiums cost more if you enroll when you’re 60 years old compared to 55 years old. 

Policies with inflation-linked benefits cost more but can prevent a financing gap later, as medical-related expenses have increased more than the average inflation rate for retail goods and services. 

When Does Long-Term Care Kick In?

In addition to comparing your premium cost and benefit amount, you should also be attentive to the elimination period. This is the waiting time after you cannot complete a certain number or type of activities of daily living (ADLs):

  • Ambulating: The extent of an individual’s ability to move from one position to another and walk independently.
  • Feeding: The ability of a person to feed oneself.
  • Dressing: The ability to select appropriate clothes and to put the clothes on.
  • Personal hygiene: The ability to bathe, groom oneself, and maintain dental hygiene, nail, and hair care.
  • Continence: The ability to control bladder and bowel function
  • Toileting: The ability to get to and from the toilet, use it appropriately, and clean oneself.

The most common elimination period is 90 days but can range from 0 to 180 days before your benefits start covering at-home or off-site care. 

Home health care is less likely to require an elimination period. When there isn’t an elimination period, your insurance carrier may issue a cash benefit instead, a percentage of your policy, instead of reimbursing the treatment cost up to the monthly limit. 

What Is the Best Long-Term Care Insurance?

Below are some of the best long-term care insurers to consider with competitive premiums. In addition, some platforms offer discounts and more policy customization options. However, it’s increasingly difficult to purchase traditional coverage as only a handful of companies still offer it, and you might be forced to buy a life insurance policy. 

When possible, we will distinguish which companies offer traditional long-term care coverage. However, as approximately six insurers still offer traditional policies, you will most likely need to get this benefit by purchasing a life insurance policy.

Best for Financial Strength: New York Life

  • Type of coverage: Traditional long-term care and a combination of long-term and life insurance
  • Monthly benefit amount: $1,500 to $7,000
  • Policy limit: $50,000 to $250,000
  • Elimination period: One-time deductible from $4,500 to $21,000
  • Discounts: Client loyalty discount 
  • A.M. Best rating: A++ (Superior)

New York Life is one of the oldest insurance companies in the United States, dating back to 1841 (initially starting as Nautilus Mutual Life). Its products include traditional and combination long-term care, life, and individual disability insurance

They also have one the best financial strength rating of A++/Superior from A.M. Best. As a result, there is a low risk of them going out of business, which is why we like them so much.

You must contact a licensed agent to get a price quote and compare your coverage options.

New York Life Traditional Long-Term Coverage

If you prefer traditional coverage, you can purchase an NYL My Care plan which offers curated product bundles of the carrier’s most popular features. For hands-on coverage, the premium NYL Secure Care option provides more customization and comprehensive care.

The policy has four levels (Bronze, Silver, Gold, Platinum) with different monthly and lifetime maximum benefit amounts. Instead of a day-based elimination period, your benefits may activate after reaching a one-time deductible from $4,500 up to $21,000.

New York Life Combination Long-Term Care and Life Coverage

The NYL Asset Flex plan combines long-term care and life insurance benefits, the coverage model most insurers have gravitated to within the last decade. 

This plan reimburses eligible long-term care (LTC) expenses and includes a life insurance death benefit. The coverage period is for up to seven years. If the policyholder doesn’t use all or part of their LTC allotment, the policyholder or their survivors can be reimbursed.

Additionally, if the policyholder cancels their coverage early, they or their beneficiaries can be reimbursed the cash value of the premium. 

If you choose this option, premiums start at $10,000 and can be paid upfront as a lump sum or over five to 10 years with budget-friendly installments. 

Pros

  • Highest A.M. Best financial strength rating possible
  • They offer traditional and combination policies
  • Heirs can request residual benefits of combination Asset Flex plans

Cons

  • Cannot estimate price quotes online
  • Benefit options and coverage periods vary by state

Why We Like New York Life

New York Life has some of the highest financial strength ratings possible. In addition, they are one of the few providers to offer traditional and combination policies, so you have an above-average choice of plan options. 

Learn More About New York Life.

Best For Discounts: Mutual of Omaha

  • Type of coverage: Traditional long-term care
  • Monthly benefit amount: $1,500 to $10,000
  • Policy limit: $50,000 to $500,000
  • Elimination period: 90 days after not performing at least 2 of 6 ADLs
  • Discounts: Being in good health (15%), both married spouses purchase coverage (15% or only 5% if one partner enrolls) 
  • A.M. Best rating: A+ (Superior)

Mutual of Omaha is one of a handful of traditional insurers offering insurance products since 1909. The agency has also generated consistently high customer satisfaction ratings.

Long-term care insurance can be pricey, and minimizing expenses is essential leading up to and during retirement. Mutual of Omaha offers discounts for being in good health or when married couples obtain coverage. 

Each policy includes these complimentary benefits:

  • Cash benefit – home health services only
  • Care coordination – receive a personalized care plan and arranged services
  • Alternate care – treatments that are standard in the future but not practiced when the policy is written can be eligible for reimbursement
  • Waiver of premium – You are not required to pay your premium while receiving covered long-term care.

Some of the optional benefits available at an additional cost include inflation protection (increase your benefit limit by a specific percentage annually), shared care (you can utilize your spouse’s benefits after exhausting yours), security benefit (an additional portion of the monthly reimbursement limit can be used for a partner’s care or living expenses). 

Mutual of Omaha Insurance Company underwrites each policy and has the highest possible financial strength rating (Superior) from A.M. Best. 

Pros

  • Offers traditional coverage plans
  • Discounts are available
  • Several built-in benefits other carriers charge for (i.e., waiver of premium)
  • Optional inflation protection rider

Cons

  • You can estimate your needs online but must open a policy through a local agent.
  • Only offer one type of insurance plan.
  • Marriage discounts can require being together for at least three years.

Why We Like Mutual of Omaha

We like that Mutual of Omaha is one of the few insurers issuing traditional long-term care insurance to new policyholders. It’s superior financial strength rating, high customer satisfaction scores, and discounted premiums or complimentary benefits are also worth mentioning.

Learn more about Mutual of Omaha.

Best for Plan Options: Northwestern Mutual

  • Type of coverage: Traditional long-term care, Hybrid, Life insurance with an accelerated rider
  • Monthly benefit amount: $1,500 to $12,000
  • Policy limit: Varies
  • Elimination period: 6, 12, 25, or 52 weeks
  • Discounts: Spouse discount (10-30%), select employers and affiliations (5%) 
  • A.M. Best rating: A++ (Superior)

Northwestern Mutual has high customer satisfaction ratings and some of the best financial strength ratings, including an A++ (Superior) rating from A.M. Best. This company has been issuing policies for over 164 years.

The carrier offers three different coverage types:

  • Standalone: Traditional long-term care coverage
  • Hybrid: Combines whole life insurance with a long-term care rider. Your beneficiaries can receive the death benefit whether or not you need care.
  • Life insurance with an accelerated rider: Taps the death benefit if you need long-term care.

Spouses looking to purchase coverage can also qualify for a couples discount worth 10-30%, one of the industry’s highest.

While it’s easy to customize your coverage, the most significant drawback is that your benefits are only available at authorized locations. In addition, the benefit period may only be three or six years, a potential dealbreaker for some. 

Further, you can only get a quote by speaking with an agent.

Pros

  • Three different ways to obtain coverage
  • Maximum 30% couples discount
  • Excellent customer satisfaction and financial strength ratings

Cons

  • Covered care at approved facilities only
  • No online quotes
  • Other carriers offer more benefit period options

Why We Like Northwestern Mutual

Northwestern Mutual can be at the top of your list if you want a carrier with the highest financial strength ratings. Additionally, they are one of the few that still offer traditional long-term care coverage.

Learn More About Northwestern Mutual.

Best for Customer Satisfaction: Nationwide

  • Type of coverage: Hybrid and Life insurance with an accelerated rider
  • Monthly benefit amount: Varies by plan and policy value 
  • Policy limit: 2 to 7 years 
  • Elimination period: 90 days
  • Discounts: Married couples can be eligible for a discount (undisclosed amount) 
  • A.M. Best rating: A+ (Superior)

Nationwide has some of the highest customer satisfaction ratings, year in and year out. It can also be one of your best options if you want to purchase multiple insurance coverages, such as homeowners and car insurance.  from the same company.

Unfortunately, long-term care coverage is only available as an add-on to life insurance policies. Thankfully, these policies can make getting reimbursed for various expenses that other insurance companies may reject easily. One example is paying family members to care for you. 

Your two plan options are:

  • CareMatters: Hybrid coverage, including whole life insurance with a guaranteed death benefit (minimum 20%). This policy pays up to 100% of the monthly cash benefit, and you can pay informal caregivers such as a relative. You may not need to submit receipts to receive reimbursement either.
  • Long-Term Care Rider: This rider uses your death benefit to cover long-term care expenses on universal or variable life insurance policies. Regulations vary by state.

You can research your options online, but you will need to call or meet an agent to review your coverage options and receive a quote.

Pros

  • High customer satisfaction ratings
  • Can pay informal caregivers with benefits
  • Potential married couples discount

Cons

  • No standalone traditional policies
  • Must call to get a quote

Why We Like Nationwide

Nationwide offers customizable hybrid and life insurance riders. The carrier has excellent customer satisfaction ratings.

Learn more about Nationwide Long-Term Care Insurance.

Best for No Waiting Period: Lincoln Financial

  • Type of coverage: Hybrid 
  • Monthly benefit amount: $50,000 to $750,000 
  • Policy limit: 2 to 7 years 
  • Elimination period: None
  • Discounts: Couples discount (amount is not disclosed)
  • A.M. Best rating: A+ (Superior)

The Lincoln Financial MoneyGuard long-term care plan is a hybrid policy with a guaranteed death benefit (whole-life coverage) and long-term care benefits. Unlike most policies, there isn’t a waiting period to start using your benefits.

Your long-term care benefits are tax-free for in-home or facility-based care. Other carriers also offer tax-friendly benefit distributions, but you should ask the agent about the tax treatment when comparing policies.

You can purchase benefit acceleration riders for up to $750,000 in long-term care coverage. An inflation protection option is also available that can increase your future benefit amount, but your premiums will increase.

When paying your premium, you can pay it all upfront or over 10 to 15 years. If you don’t use your benefits, you can be eligible for a return of premium benefit. However, surrender charges apply when canceled during the first ten years.

An agent will help you compare the costs and benefits of the Lincoln Financial Fixed Advantage and Market Advantage plans.

Pros

  • No waiting period
  • Use funds for at-home or facility care and services
  • Return on premium benefit

Cons

  • No traditional insurance plans
  • Must contact an agent to get a price quote
  • It may not be available in CA or NY.

Why We Like Lincoln Financial

Lincoln Financial makes using your long-term care benefits easy when you need help at home or at a dedicated facility. You can also recoup part of your premium if you don’t use your benefits. 

Learn more about Lincoln Financial.

How many companies offer traditional long-term care insurance?

According to AALTCI, only six insurers are issuing new traditional long-term care insurance:

  • Mutual of Omaha
  • Thrivent
  • National Guardian Life
  • New York Life
  • Northwestern Mutual Life
  • Bankers Life

Outside these organizations, you will choose a combined life and long-term policy with a guaranteed death benefit or a life insurance policy with an optional rider for long-term care.

When Is the best time to buy long-term care insurance?

You should buy long-term-care coverage in your mid-50s or by age 60. Your premiums are lower than waiting to apply during your 60s, and you are also more likely to get approved for coverage as you’re a decade younger.

As you are buying coverage at a relatively young age and this insurance is expensive, you should try to obtain the longest coverage period possible to avoid outliving your policy. 

How do you compare long-term care insurance plans?

Long-term care insurance is expensive but can cover your at-home and facility-based medical needs when you need care or housing for an extended period. Here are some factors to consider when shopping for long-term care insurance.

  • Traditional or combination plan: Most insurers only offer long-term care benefits in a life insurance policy, which can be pricier and may have coverage restrictions. Decide if you need traditional, hybrid, or life insurance riders.
  • Estimated costs: You should budget for at-home and facility-based care and factor inflation into the estimate. Nobody can predict the future, but you want to ensure your premiums and benefit amounts are sufficient for your projected needs to avoid funding gaps.
  • Elimination period: Consider how long you must wait before the benefits kick in. Also, are there exclusions about which caregivers can receive reimbursement?
  • Financial strength: You want to ensure the insurance carrier is financially sound. Look for companies with the highest financial stability ratings first, as many long-term insurance companies no longer issue new policies due to rising expenses.
  • Potential downsides: Analyze the plan’s limitations. You may need to probe your insurance agent for further details as they may not freely disclose the potential negatives.

The Bottom Line on Long-Term Care Insurance

The best long-term care insurance policies cover a variety of long-term care options at home or in a dedicated facility. There are many coverage options, and getting quotes from several providers is worth the time to ensure you get the right coverage at the best price. Comparing traditional and hybrid policies can also make it easier to choose the best policy.  

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About Kevin Mercadante

Since 2009, Kevin Mercadante has been sharing his journey from a washed-up mortgage loan officer emerging from the Financial Meltdown as a contract/self-employed "slash worker" – accountant/blogger/freelance blog writer – on OutofYourRut.com. He offers career strategies, from dealing with under-employment to transitioning into self-employment, and provides "Alt-retirement strategies" for the vast majority who won’t retire to the beach as millionaires.

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Kevin has a B.S. in Accounting and Finance from Montclair State University.

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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