How to buy long-term care insurance now

These steps can help you better navigate the long-term care insurance landscape when purchasing a policy. 

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Did you know that a private room in a nursing home costs, on average, about $9,800 per month in 2024? And, while home health aides cost less expensive on average, the nearly $6,000 per month price tag can still be difficult to afford out of pocket. Even assisted living, the least expensive type of long-term care, can set you back nearly $60,000 per year. 

So, it can make sense to buy a long-term care insurance policy to help cover the costs. 

But if you haven’t purchased long-term care insurance in the past, you may not know where to get started. After all, this type of insurance is complex and it’s important to find a policy that fits your needs. 

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How to buy long-term care insurance now

If you’re ready to buy long-term care insurance, it can help to follow the steps below. 

Step #1: Think about your long-term care plans

Different types of care come with different costs. For example, in 2024, the average cost of a private room in a nursing home is expected to be about $9,872 per month, according to Genworth. However, you may be able to hire a home health aide for about $5,625 per month. Not to mention, the average cost of living in an assisted living community is expected to be about $4,917 per month this year. 

It’s important to consider other factors in this process, too. For example, if you decide to age at home, you may eventually need accessibility-related renovations to your home. You may also lean on your family members for care, reducing your overall cost. So, it’s important to give serious consideration to all the aspects of the care you may need, as each factor will play a role in the type of long-term care insurance policy, and the amount of coverage, you need.  

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Step #2: Consider your retirement income

You’ll likely have some form of retirement income, whether or not you’re on a tight budget. In turn, you may not need long-term care insurance to cover all of your long-term care expenses. That matters because the less coverage you need, the lower your long-term care insurance premiums are likely to be. 

“LTC insurance should not be a zero-sum decision, that is, the choice should not be 100-percent self-funding or buy LTC insurance,” says Bill Comfort, trainer at Certification for Long-Term Care (CLTC). “LTC insurance should be designed to work along with – to take pressure off of – existing financial resources.”

Think about your retirement income sources — Social Security, 401(k), IRA, pensions or other funding sources — and determine what percentage of your income you can dedicate to long-term care costs. After all, you’ll have other expenses that need to be covered as well, so it’s important to find out what you can feasibly use to cover the costs of this type of care. 

Step #3: Determine how much long-term care insurance you need

Once you know the type of care you may want in the future and how much retirement income you can use to cover those costs, you can estimate how much coverage you need from your long-term care insurance policy. 

For example, let’s say you decide to age at home with a home health aide. You expect to need care for a maximum of three years starting in 2035. And, you expect to be able to contribute $3,500 per month ($42,000 per year) to your cost of care throughout your retirement income. 

According to Genworth (link above), the average cost of a home health aide in 2035 is expected to be $80,604 per year. That means three years of care will cost you approximately $241,812 in total, and you can pay $126,000 out of pocket with your retirement income. 

In turn, you would need a policy to cover the other $115,812 in long-term care costs. If we’re rounding up, a $125,000 long-term care insurance policy may be adequate in this case. 

Step #4: Get in touch with a long-term care insurance expert

Once you have a good idea of what you need from a long-term care insurance policy, it’s time to shop for coverage options. And, one good way to do so is to speak with a licensed insurance agent. A licensed insurance agent can help to guide you through the complexities of purchasing a policy to make sure you get the coverage you need at an affordable price. 

“Work with an independent LTC insurance specialist who represents multiple companies and multiple types of LTC policies – both traditional and hybrid options,” says Comfort. “There is no one ‘best’ type of policy.”

Step #5: Purchase your policy

Once you find the right policy, you may want to purchase it as soon as possible. If you wait too long, you could face higher premiums or limited coverage options, as your health status and age will typically play a large role in the type of coverage you qualify for — and the cost of your premiums. 

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The bottom line

Long-term care insurance is a valuable tool that can help cover the cost of long-term care when you need it. By following the steps above, you may be better prepared to find and purchase a policy that meets your needs today. 

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