The average nursing home costs $108,000 per year. Assisted living averages $64,000. Home health aides average $62,000 for full-time care. Medicare covers almost none of this. Without long-term care insurance, these costs come directly from your savings — and 70% of Americans turning 65 will need some form of long-term care.
This guide compares the best long-term care insurance companies, what they cost at different ages, and how to decide between traditional and hybrid policies.
Best Long-Term Care Insurance Companies at a Glance
| Company | AM Best | Policy Type | Annual Premium (55, $150/day, 3-yr) | Rate Increase History | Best For |
|---|---|---|---|---|---|
| Mutual of Omaha | A+ | Traditional LTC | $2,400 | Moderate | Best overall traditional LTC |
| Northwestern Mutual | A++ | Traditional + hybrid | $2,800 | Low | Strongest financial rating |
| Lincoln Financial | A+ | Hybrid (life + LTC) | $3,200* | N/A (hybrid) | Best hybrid policy |
| Nationwide | A+ | Hybrid (life + LTC) | $3,000* | N/A (hybrid) | Best hybrid with flexible payouts |
| Securian (Minnesota Life) | A+ | Traditional LTC | $2,500 | Moderate | Group/employer LTC |
| Brighthouse Financial | A | Hybrid (annuity + LTC) | Lump sum | N/A (hybrid) | Annuity + LTC combination |
| Pacific Life | A+ | Hybrid (life + LTC) | $3,400* | N/A (hybrid) | High death benefit + LTC |
Hybrid premiums shown as annual cost of underlying life insurance policy
Traditional vs. Hybrid Long-Term Care Insurance
| Feature | Traditional LTC | Hybrid (Life + LTC) |
|---|---|---|
| How it works | Pay premiums → get LTC benefits if needed | Pay premiums for life insurance → LTC rider accelerates death benefit |
| If you never need care | Premiums lost (no benefit) | Death benefit paid to beneficiaries |
| Premium stability | Can increase (and often does) | Fixed/guaranteed premiums |
| Cost | Lower initial premiums | Higher initial premiums |
| Benefit amount | Based on daily/monthly benefit | Based on death benefit amount |
| Tax treatment | Premiums may be tax-deductible | Generally not tax-deductible |
| Best for | Maximum LTC coverage per dollar | Peace of mind (money back if no claim) |
The Rate Increase Problem with Traditional LTC
The biggest risk with traditional LTC insurance: rate increases. Insurers can raise premiums on existing policyholders, and many have — some by 50–100%+ over the life of the policy. Major rate increases have hit policyholders from Genworth, John Hancock, and other major carriers.
| Company | Historical Rate Increases | Current Status |
|---|---|---|
| Genworth | 50–150% cumulative | Still selling, but reputation damaged |
| John Hancock | 40–80% cumulative | Stopped selling traditional LTC in 2016 |
| MetLife | Varies | Exited LTC market in 2010 |
| Mutual of Omaha | Moderate (10–30%) | Still selling, more conservatively priced |
| Hybrid policies | None (premiums guaranteed) | Growing market share |
This is why hybrid policies are gaining popularity. Premiums can’t increase, and if you never need care, your beneficiaries get the death benefit. The trade-off: hybrid policies cost more upfront and provide less LTC coverage per premium dollar.
Long-Term Care Insurance Costs by Age
Traditional LTC Policy ($150/Day Benefit, 3-Year Benefit Period, 3% Inflation Protection)
| Age at Purchase | Single Male (Annual) | Single Female (Annual) | Couple (Annual, Each) |
|---|---|---|---|
| 45 | $1,200 | $1,800 | $900 |
| 50 | $1,600 | $2,400 | $1,200 |
| 55 | $2,100 | $3,200 | $1,600 |
| 60 | $3,200 | $5,000 | $2,500 |
| 65 | $5,500 | $8,500 | $4,200 |
| 70 | $9,000+ | $14,000+ | $7,000+ |
Why women pay more: Women live longer on average and use long-term care services more frequently and for longer periods. The premium difference is 40–60%.
Why couples save: Shared-care policies let couples share a pool of benefits. If one spouse uses less, the other can use more. Couple discounts also apply even if only one spouse buys coverage.
Hybrid Policy Costs ($200,000 Death Benefit / $400,000 LTC Pool)
| Age at Purchase | Annual Premium | Total Premiums (to 85) | Death Benefit | LTC Pool |
|---|---|---|---|---|
| 50 | $3,000 | $105,000 | $200,000 | $400,000 |
| 55 | $3,500 | $105,000 | $200,000 | $400,000 |
| 60 | $4,200 | $105,000 | $200,000 | $400,000 |
| Lump sum (any age) | — | $80,000–$120,000 | $200,000 | $400,000 |
Hybrid policies can be funded with annual premiums or a single lump sum (often from a CD or savings account that’s earning less than the policy’s guaranteed growth).
How Long-Term Care Insurance Works
What LTC Insurance Covers
| Service | Covered? | Average Annual Cost (2026) |
|---|---|---|
| Nursing home (semi-private) | ✓ | $108,000 |
| Nursing home (private room) | ✓ | $120,000 |
| Assisted living facility | ✓ | $64,000 |
| Home health aide (full-time) | ✓ | $62,000 |
| Home health aide (part-time) | ✓ | $31,000 |
| Adult day care | ✓ | $22,000 |
| Memory care | ✓ | $72,000 |
| Routine doctor visits | ✗ | Covered by Medicare |
| Prescription drugs | ✗ | Covered by Medicare Part D |
| Short-term rehab (after hospital) | ✗ | Covered by Medicare (up to 100 days) |
Key Policy Terms
| Term | What It Means | Typical Options |
|---|---|---|
| Daily/monthly benefit | Maximum the policy pays per day/month | $100–$400/day |
| Benefit period | How long the policy pays | 2, 3, 5 years, or lifetime |
| Elimination period | Days you pay out of pocket before benefits start | 30, 60, 90 days |
| Inflation protection | How benefits grow over time | 3% simple, 3% compound, 5% compound |
| Waiver of premium | Premiums waived while receiving benefits | Usually included |
| Nonforfeiture benefit | Reduced benefit if you lapse after years of payments | Optional rider |
How Benefits Add Up
| Policy Configuration | Monthly Benefit | Benefit Period | Total Pool | Covers |
|---|---|---|---|---|
| $150/day, 3 years | $4,500 | 36 months | $162,000 | ~1.5 years nursing home or 2.5 years assisted living |
| $200/day, 3 years | $6,000 | 36 months | $216,000 | ~2 years nursing home or 3.4 years assisted living |
| $250/day, 5 years | $7,500 | 60 months | $450,000 | ~3.8 years nursing home or 7 years assisted living |
| $300/day, lifetime | $9,000 | Unlimited | Unlimited | Full coverage for any duration |
Inflation Protection: The Most Important Feature
Long-term care costs rise 3–5% annually. A policy that covers $150/day today may only cover half the cost in 15 years without inflation protection.
| Inflation Option | $150/Day Benefit After 20 Years | Premium Impact |
|---|---|---|
| No inflation protection | $150/day | Lowest premium |
| 3% simple inflation | $240/day | Moderate |
| 3% compound inflation | $271/day | Higher |
| 5% compound inflation | $398/day | Highest premium |
Always buy compound inflation protection if you’re under 65. Simple inflation falls behind over time. The extra 20–40% premium for compound protection pays for itself if you need care in your 80s.
Long-Term Care Costs in 2026: What You’re Actually Insuring Against
Long-term care insurance exists because the cost of care is financially catastrophic for most families. Here are 2026 median annual costs by care type:
| Care Type | Median Annual Cost | Monthly Cost | Notes |
|---|---|---|---|
| Home health aide (44 hrs/wk) | $75,500 | $6,292 | Most common need |
| Adult day health care (5 days/wk) | $24,700 | $2,058 | Lowest cost option |
| Assisted living facility | $64,200 | $5,350 | Median private room |
| Nursing home (semi-private room) | $97,500 | $8,125 | Highest cost |
| Nursing home (private room) | $111,300 | $9,275 | Most expensive setting |
Source: Genworth Cost of Care Survey 2025. Costs vary significantly by state — New York and Connecticut run 40–60% above national median; southern states run 20–30% below.
The duration risk: The average long-term care episode lasts 2.5 years for men and 3.7 years for women. However, 20% of people who need care will need it for 5+ years. For a 5-year nursing home stay at $97,500/year, total costs reach $487,500 — enough to wipe out most middle-class retirements entirely.
State Partnership Programs: Medicaid Asset Protection
Most states offer Long-Term Care Partnership Programs — a collaboration between private insurers and state Medicaid that provides a powerful incentive to buy LTC insurance:
How it works: For every dollar your LTC policy pays in benefits, you can protect an equal dollar of assets from Medicaid spend-down. Without a partnership policy, you must spend down virtually all assets before Medicaid kicks in.
Example: You have a $300,000 partnership LTC policy that pays $300,000 in benefits before being exhausted. Under a partnership program, you can then qualify for Medicaid while keeping $300,000 in personal assets — instead of spending those assets down to $2,000 (the typical Medicaid threshold).
Partnership policies are available in most states and are offered by all major LTC insurers. When shopping, specifically ask whether the policy qualifies for your state’s partnership program — it significantly changes the value calculation for middle-class buyers.
Who Needs Long-Term Care Insurance
| Asset Level | LTC Insurance? | Why |
|---|---|---|
| Under $100,000 | Usually not | Medicaid will cover care after assets are spent |
| $100,000–$500,000 | Yes — highest need | A 2-year nursing home stay depletes these savings entirely |
| $500,000–$1 million | Yes | Protects retirement savings from catastrophic care costs |
| $1 million–$2 million | Maybe | Can partially self-insure with shorter benefit period |
| Over $2 million | Maybe not | Can self-insure, but LTC still protects estate |
Alternatives to Long-Term Care Insurance
| Alternative | How It Works | Pros | Cons |
|---|---|---|---|
| Self-insure | Pay from savings/investments | No premiums, full control | Risk of depleting retirement savings |
| Medicaid | Government pays after assets spent | Covers nursing home | Must spend down to poverty level |
| Hybrid policy | Life insurance + LTC rider | Money back if no claim | Higher premiums, less LTC coverage |
| Short-term care policy | Covers 6–12 months | Low premiums | Doesn’t cover extended care |
| Home equity | Sell home or use HELOC | Large funding source | May not cover full care cost |
| Family caregiving | Relatives provide care | No financial cost | Enormous personal burden |
How to Buy Long-Term Care Insurance
| Step | Action | Notes |
|---|---|---|
| 1 | Determine if you need LTC insurance | Review asset level chart above |
| 2 | Decide: traditional vs. hybrid | Traditional = lower cost, hybrid = guaranteed premiums |
| 3 | Get quotes from 3+ companies | Use an independent broker who represents multiple carriers |
| 4 | Compare benefit amount, period, and inflation protection | Don’t just compare premiums |
| 5 | Review insurer’s rate increase history | Ask for the last 10 years of rate actions |
| 6 | Apply (health underwriting required) | Most rejections happen after age 70 |
| 7 | Review policy during free-look period | 30 days to cancel for full refund in most states |
Important: Buy from an independent broker who represents multiple carriers — not a captive agent selling one company’s products. Independent brokers can compare rates across 5–10 insurers to find the best fit.
For more on LTC costs and whether you need coverage, see our long-term care insurance guide.
Frequently Asked Questions
Does Medicare cover long-term care?
Medicare covers only short-term skilled nursing care (up to 100 days after a qualifying hospital stay). It does not cover custodial care — the help with daily activities like bathing, dressing, and eating that makes up the majority of long-term care needs.
Can I be denied long-term care insurance?
Yes. LTC insurance requires health underwriting. Common reasons for denial: Alzheimer’s/dementia diagnosis, Parkinson’s, recent stroke, certain cancers, insulin-dependent diabetes, and needing assistance with daily activities. This is why buying at 50–55 is important — before health conditions develop.
What happens if I can’t afford the premiums anymore?
Most policies have a nonforfeiture benefit option that provides reduced coverage if you stop paying after several years. Without this rider, you lose all benefits if you lapse. Some policies offer a “paid-up” option after 10+ years of payments.
Sources
- U.S. Department of Labor. “Wages and the Fair Labor Standards Act.” dol.gov/agencies/whd/flsa
- Centers for Medicare & Medicaid Services. “Medicare Program Information.” medicare.gov
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy