The 7 Best Long-Term Care Insurance Companies

The US Department of Health and Human Services estimates you’ll have a 70% chance of needing some form of long-term care after reaching age 65.

Though the purpose of insurance is typically to insure against hazards that are costly, but unlikely, it seems that the likelihood of needing long-term care is fairly predictable. For that reason, everyone should investigate long-term care insurance policies.

There are many companies that provide long-term care insurance, and we’re going to zero-in on what we believe are the seven best long-term care insurance companies.

Be aware that while some insurance companies provide dedicated long-term care insurance policies, others offer hybrid policies that offer both long-term care coverage and life insurance. Though the latter have higher premiums, they offer greater flexibility and likelihood of retaining at least some of your policy value. We’ve included companies providing both policy types in our list. 

Table of Contents
  1. How Much Does Long-Term Care Cost?
  2. When Can I Qualify for Long-Term Care Insurance Benefits?
  3. What’s the Best Way to Purchase a Long-Term Care Insurance Policy?
  4. The 7 Best Long-Term Care Insurance Companies
    1. Mutual of Omaha
    2. New York Life
    3. Pacific Life
    4. Transamerica
    5. Nationwide
    6. Lincoln Financial 
    7. MassMutual
  5. Bottom Line

How Much Does Long-Term Care Cost?

Let’s start with making a case for why long-term care insurance is necessary. 

According to information provided by Mutual of Omaha, the average cost of care is as follows, based on the care services offered:

  • Home healthcare: $27.21 per hour for a home health aide, $116.44 for a licensed practical nurse, and $127.87 for a registered nurse.
  • Assisted living facility, one-bedroom unit: $6,070.44 per month.
  • Nursing home, semi-private room: $338.52 per day.
  • Nursing home, private room: $349.06 per day.

Annualized, the current cost of living in an assisted living facility comes to about $72,840. A nursing home is $123,600 per year for a semi-private room, and about $127,400 for a private room.

The above numbers are average costs in 2019. The company projects those costs to roughly double by 2040, assuming a 3% average annual rate of inflation. Costs also vary from one state to another, often significantly. 

The high cost of long-term care makes a strong case for purchasing a long-term care insurance policy. Few Americans, even those well prepared for retirement, can afford an annual cost of over $100,000 for an extended stay in a long-term care facility, or even the cost of limited home healthcare services.

Perhaps more than anything else, long-term care insurance protects your retirement assets. However, depending on the benefit level of coverage you include in your plan, you may still pay part of the cost of long-term care out of your personal resources.

Here’s more about how long-term care insurance works, including costs.

When Can I Qualify for Long-Term Care Insurance Benefits?

Qualification for benefits under a long-term care insurance policies are typically determined by your ability to participate in Activities of Daily Living, or ADLs

There are six 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 and groom oneself and to maintaining 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, using it appropriately, and cleaning oneself

To qualify for long-term care insurance benefits, you typically need to be unable to perform at least two of the six ADLs. However, specific benefit determinations are made by each individual insurance provider.

What’s the Best Way to Purchase a Long-Term Care Insurance Policy?

Though it may be possible to purchase long-term care insurance through an online long-term care insurance marketplace, you’ll ultimately be dealing with each insurance company on an individual basis.

Unlike some insurance policy types, particularly term life insurance, long-term care insurance policies are individual-specific. It’s not the type of product you can purchase “off-the-shelf”. Because of the many options and individual needs, each policy will essentially be customized to match your own requirements.

For example, different companies have a variety of elimination periods, which is the time you must wait before you begin receiving benefits (similar to a deductible on other insurance policy types).

Other variables include the length of time your policy will cover your stay in a long-term care facility, as well as both daily and lifetime maximum dollar amounts of coverage. Each company also offers its own menu of options and discounts.

For that reason, it’s best to purchase this type of policy with the assistance of a representative of the company you chosen to work with. The nature of the coverage and the wide range of variables make it unadvisable to select a policy based on automated quote systems.

The 7 Best Long-Term Care Insurance Companies

Mutual of Omaha

Elimination period: 90 days after inability to perform at least two of the six ADLs.

Benefits range: $1,500 to $10,000 per month

Coverages offered: In-home care, assisted living, nursing homes. 

Available options: Inflation protection, shared care and security benefit (allows you to access your partner’s plan benefits if you exhaust yours), return of premium (refund the portion of the premium, less any benefits paid under the policy). 

Discounts offered: 5% if you are married, 15% if both you and your partner are covered under the same policy, 15% for being in good health.

A.M. Best rating: A+ (Superior)

Mutual of Omaha is a long-established and well-regarded insurance company, providing most types of coverage, including long-term care insurance. They offer multiple long-term care insurance policies, making it easier to find one that will match your combination of needs and affordability. When you visit the company website, you’ll be directed to a local licensed agent. You can purchase coverage up to age 79.

Mutual of Omaha includes certain built-in benefits that may be options with other companies. For example, they give you the ability to accept a cash benefit for a percentage of the policy’s benefit for home healthcare, as opposed to direct reimbursement for costs. 

They also include a waiver of premium, suspending your premiums while you are in long-term care. A care coordinator is appointed to help you develop a plan and arrange for services. They also offer alternative care for services or treatments that don’t currently exist but may in the future.

Learn more about long term care insurance from Mutual of Omaha

New York Life

Elimination period: Includes a one-time deductible, ranging from $4,500 to $21,000.

Benefits range: $1,500 to $7,000 per month; policy lifetime maximum ranging from $50,000 to $250,000.

Coverages offered: In-home care, assisted living, nursing homes.

Available options: Waiver of premium, inflation protection, a shared care rider, access to care planners, return of premium up to age 65. 

Discounts offered: Client loyalty discount.

A.M. Best rating: A++ (Superior)

New York Life is one of the leading providers of long-term care coverage.

They offer the option to either get the coverage through a standalone policy or a life insurance policy rider (allows you to access a percentage of your death benefit for long-term care expenses). Like Mutual of Omaha, New York life is a large, well established company, with a solid reputation and an excellent financial strength rating. But as a mutual insurance company, New York Life offers dividends on their policies after you’ve been an owner for a specified number of years.

Their policies include waiver of premium if you are in long-term care, in-home support equipment, and access to care providers.

Their NYL My C policies have predesigned plan benefit levels, allowing you to choose the level you can best afford. It’s broken down by bronze, silver, gold and platinum plan levels, with varying monthly maximum benefits and policy lifetime maximum benefits.

Learn more about long term care insurance from New York Life

Pacific Life

Elimination period: 0 to 90 days. 

Benefits range: Coverage terms from two to eight years. Maximum benefit, $3,588 per month, or $7,176 per month.

Coverages offered: In-home care, assisted living, nursing homes, hospice, adult day care center, alternative care, home and community care, home modification, and caregiver training.

Available options: Not indicated.

Discounts offered: Couples discount,

A.M. Best rating: A+ (Superior)

Pacific Life is a diversified financial services and life insurance company that’s been around for more than a century and a half. They offer an interesting product called Pacific PremierCare Choice 100 that combines life insurance with long-term care benefits. It will give you the option to use the policy, either as a straight death benefit, or to be accessed for long-term care benefits. And since it comes with a return of premium benefit, you’ll receive the accumulated cash value if you choose to surrender the policy early.

You’ll pay a one-time premium of say, $100,000 – which is similar to an annuity. In exchange, you can receive up to 3.46 times the premium paid (up to $346,600) on Day 1 for total long-term care benefits, or to cover a maximum monthly benefit of $3,588. Or you can choose 6.47 times the premium paid (up to $647,992) for long-term care at age 80, to cover a maximum monthly benefit of $7,176.

If the policy is not used for long-term care, it will be paid to your beneficiaries as a death benefit. Otherwise, you’ll have a full money-back option with a 100% return of premium benefit. And because your policy is paid for with after-tax premium dollars, the benefits you’ll receive are generally tax-free.

This is an excellent choice for anyone who has funds sufficient to make the large upfront payment, to cover the one-time premium for your long-term care needs.

Learn more about long term care from Pacific Life

Transamerica

Elimination period: 0 to 365 days; none for home healthcare

Benefits range: $50 to $500 per day, up to lifetime benefit of over $1 million.

Coverages offered: In-home care, adult day care, assisted living, and nursing homes.

Available options: Inflation protection, monthly home care benefit, shared care benefit between spouse or partner, return of premium with death before age 67, joint waiver of premium, three-year rate guarantee.

Discounts offered: 30% couples discount.

A.M. Best rating: A (Excellent)

Transamerica has been in business for more than 100 years and has grown to be one of the largest life insurance companies in America. It is now a subsidiary of The Netherlands-based Aegon, which acquired the company in 1999.

Transamerica offers flexible policy options, including the ability to choose the inflation rate in your inflation protection, as well as a 30% couples discount. They also provide a return of premium option if you have not used the policy up to age 67.

However, be aware that Transamerica long-term care insurance is not available in all states, including California, Florida and New York.

Learn more about long term care insurance from Transamerica (you’ll need to speak to an agent for details)

Nationwide

Elimination period: 90 days

Benefits range: 2 to 7 years; dollar value of benefit depends on plan selected and policy value.

Coverages offered: Home healthcare, nursing homes, assisted living, adult day care, home modification, and care coordination.

Available options: Inflation protection, return of premium, minimum 20% of policy value for death benefit.

Discounts offered: Not indicated.

A.M. Best rating: A+ (Superior)

Much like Pacific Life, Nationwide offers a combination life insurance and long-term care insurance policy. They offer a whole life insurance policy with a long-term care insurance rider. That gives you the benefit of covering short-term needs (such as care after a surgery), tax-free reimbursements, and a guaranteed minimum death benefit. And again like Pacific Life, the life insurance policy you’ll be purchasing will be a single lump sum paid-up policy, which will eliminate future premiums.

You can choose between one of two types of policies, indemnity or reimbursement.

Under an indemnity policy, full monthly payments will be sent directly to you as the policy owner. That means you will not need to collect bills or receipts to submit for reimbursement. You can also use the funds for purposes not related to long-term care.

Under the reimbursement plan, you’re reimbursed for the lesser of your monthly benefit or your actual long-term care costs. You can even have the facility bill Nationwide directly for qualifying expenses.

Since either plan is tied to a life insurance policy, your beneficiaries will receive a guaranteed minimum death benefit. That means they’ll receive money even if you use all the long-term care benefits under your plan. And any unused funds from the long-term care rider will be added to the death benefit for your beneficiaries.

Learn more about long term care insurance from Nationwide

Lincoln Financial 

Elimination period: None on any long-term care services.

Benefits range: Two to seven years; and for $50,000 up to $750,000.

Coverages offered: In-home care, adult day care, community care, assisted living, nursing home, hospice, and home modifications or durable medical equipment.

Available options: Inflation protection, international benefits, case management and caregiving training.

Discounts offered: Not indicated.

A.M. Best rating: A+ (Superior)

Lincoln Financial offers its MoneyGuard hybrid policy. Much like Transamerica and Nationwide, this is a hybrid policy combining a whole life insurance policy with a long-term care provision. You’re guaranteed to receive benefits for long-term care, death, or both.

Benefits received under the long-term care provision are tax-free, whether you require in-home or facility-based care. Unlike some companies that offer long-term care as a living benefit under a life insurance policy, you’re not required to have a terminal condition to receive benefits.

One of the advantages of the MoneyGuard plan is the premium arrangement. You have the option to make either a single-pay premium in one lump sum, or pay annually for 10 or 15 years at most ages. Either way, the premium will never increase.

You should also be aware that as a life insurance policy, surrender charges will apply if you surrender the policy during the first 10 years it’s in force. You’re eligible for coverage between the ages of 40 and 79.

Learn more about long term care insurance from Lincoln Financial

MassMutual

Elimination period: 0, 30, 90 or 180 days.

Benefits range: Up to $300 per day, in $10 increments.

Coverages offered: In-home care, home health aide services, adult day care, assisted living, and nursing homes. 

Available options: Inflation protection, nonforfeiture benefits, bed reservation for up to 60 days outside your care facility, personal care advisor, care coordinator, premium waiver, respite care, alternative plan of care, 30-day free look.

Discounts offered: Up to 70% when a second individual is added to your policy.

A.M. Best rating: A++ (“Superior”)

Massachusetts Mutual – “MassMutual” for short – is one of the highest rated insurance companies in America. They offer two long-term care options, SignatureCare and Choice One, which is a hybrid life insurance/long-term care insurance policy.

CareChoice One (as well as CareChoice Select) are whole life insurance policies with long-term care riders. That means they offer a death benefit, long-term care benefits, or a policy surrender value that increases over time. Naturally, any long-term care benefits you receive will reduce both the death benefit and the policy surrender value. But under this plan, you’ll have a choice as to exactly how your benefits are used. And as a mutual insurance company, you’ll be eligible to receive dividends on your policy.

SignatureCare comes in two versions. Facility Services Only pays benefits for both nursing homes and assisted living facilities. It pays 100% of actual charges incurred, up to the daily benefit amount you select. It also includes a prescription drug benefit of up to $100 per month while you are in a facility.

The Facility Services and Home and Community Based Services plan is based on 100% of actual expenses for both facility services and home community services, up to your daily benefit amount. Services are also covered for care provided by professional nurses, and physical, speech, respiratory and occupational therapy.

Learn more about long term care insurance from MassMutual

Bottom Line

With Americans now living longer than ever, the likelihood of needing long-term care is increasing. And as demand for long-term care increases, so does the price tag.

Though some may be able to provide for long-term care costs out of personal assets, the vast majority of Americans will risk losing a large portion of their retirement savings – or even all of it – if a long-term care situation lasts for several years.

The best protection is to purchase a long-term care insurance policy, whether that is in the form of a hybrid life insurance/long-term care insurance plan, or a standalone long-term care 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.

He also frequently discusses the big-picture trends that are putting the squeeze on the bottom 90%, offering workarounds and expense cutting tips to help readers carve out more money to save in their budgets – a.k.a., breaking the "savings barrier" and transitioning from debtor to saver.

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

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