Although we all hope we will never need it, 20% of 65-year-olds will need long-term care for five years or more as they age. Long-term care insurance provides coverage to help pay for assistance with basic daily living activities like dressing, bathing, or eating if you cannot care for yourself due to a disability or illness.
Since coverage provided by Medicare or Medicaid is limited (or excluded) and doesn’t provide the financial assistance you need to cover long term care services, in most cases, you’ll need to buy coverage from a private insurer.
While the number of choices for private insurance has declined over the last 15 years, there are several options to get long-term care, including adding it to a life insurance policy. We reviewed a dozen private insurance providers based on coverage options, ease of obtaining coverage, price, and financial stability to help you find the best long-term care insurance plan for your needs.
Best Overall : New York Life
New York Life is the top mutual insurer in the United States and offers long-term care coverage through its life insurance policy riders or as stand-alone long-term care (LTC) insurance. In business for over 175 years, New York Life has a financial strength rating of A++(Superior) by AM Best and is one of our top-ranked life insurance companies. The company has above-average customer satisfaction rankings in independent reviews and few complaints with the NAIC.
We choose New York Life as the best long-term care insurance overall due to the variety of coverage options, long-standing record of financial stability, and high customer satisfaction rankings.
New York Life offers a few different LTC plans to choose from. One of those, the New York Life My Care LTC plan, covers home care, community-based care, and facility care with four coverage levels. This allows you to select the product that you can afford now and includes the option to increase coverage later on. The policy also has a return-of-premium option up to age 65.
- Waiver of premium
- Access to care providers
- Coverage increases up to age 70
- In-home support equipment
Premiums for the NYL My Care pre-designed policies vary based on your coverage selection and your age.
In addition to the My Care Plan, New York Life offers both traditional and combination LTC policy including the Secure Care LTC, which offers customizable and comprehensive benefits.
Coverage options vary depending on your state.
One in five Americans expect to provide long-term care to a family member or loved one in the future. Purchasing long-term care insurance for a parent may be a strategic option for younger people to consider if they want to avoid the financial burden of caring for parents or family members in the future.
Runner-Up, Best Overall : Northwestern Mutual
Northwestern Mutual was established in 1859. The company ranks among the best (4th place) for customer service and has an AM Best Financial Strength Rating (FSR) of A++ (Superior). Northwestern Mutual offers long-term care insurance (LTC) through life insurance policy riders and individual LTC policies LTC policies are underwritten through the Northwestern Long Term Care Insurance Company, which has an excellent track record of low levels of complaints through state regulators.
Northwestern Mutual’s financial stability, an excellent reputation, and the ability to offer long-term care coverage both through life insurance riders and as stand-alone policies make it our pick for the runner-up best overall long-term care insurance company.
We researched a sample Northwestern Mutual LTC policy and found coverage available for individuals aged 18 through 79. There is the option to select daily limits of coverage from $50 to $400 a day for nursing homes and alternate living facilities or home health care and community care. We found elimination period options, for example, that begin either at six weeks, 12 weeks, or 25 weeks. However, these vary depending on the plan you choose.
Additionally, there are options for survivorship benefits and spousal coverage, and Northwestern Mutual offers LTC policies with a waiver of premium options and eligibility to receive dividends. There are also spousal and companion discounts.
If you want a formal quote, you will be directed to an agent or financial advisor for details; Northwestern Mutual does not provide online quotes for LTC policies.
Best Value : Mutual of Omaha
Mutual of Omaha was founded in 1909 and ranked fifth in the J.D. Power Life Insurance Study 2020. The company has a financial strength rating of A+ (Superior) by AM Best and few complaints with the NAIC.
We chose Mutual of Omaha as the best long-term care insurance with the best value because of the various options provided like shared benefits, the return of premium, and the ability to opt for cash with a zero elimination period.
Mutual of Omaha offers long-term care coverage as a stand-alone policy and the features include:
- Option to take benefits as reimbursement for actual expenses after the elimination period, up to the monthly limit, or as cash benefits with no elimination period
- Access to a care coordinator
- Coverage of alternative care, if recommended by a care coordinator
- Waiver of premium
- Return of premium option
Additionally, for chronic illnesses, you only need to require assistance with two of the six Activities of Daily Living for 90 days before coverage kicks in but for cognitive impairment, you must require continual supervision for benefits to apply. There is also a shared coverage feature that allows you to access a portion of benefits under your spouse’s policy if you use all of yours.
Mutual of Omaha doesn’t offer quotes for long-term care on its website, but there is a cost of care calculator available to help you evaluate your needs. If you want a quote for LTC through Mutual of Omaha, you can contact a company agent to discuss your options.
Best for Affordable Options : Transamerica
Part of the Aegon Group, Transamerica was founded in 1904 and offers long-term care and living benefits coverages through its life insurance plans. The company has a financial strength rating of A (Excellent).
We chose Transamerica as the best long-term care insurance company for affordable coverage because its policies allow you to customize the coverage and choose affordable starting points while still maintaining the ability to increase or decrease options over time.
Transamerica offers flexible coverage options that help keep LTC policies affordable. For example, you can select a policy with an inflation benefit of 0%, 3%, or 5% and change the inflation during the term of your policy without having to prove insurability through the Benefit Increase Option (BIO). There is also a 30% couples discount.
However, Transamerica uses gender-based premiums, making the cost of individual policies more expensive for females but less expensive for males and couples. But according to the AALTCI, despite the gender bias, pricing is often still lower than its competitors.
Note that not all of Transamerica’s policies are available in all states. For instance, the TransCare III, which offers benefits including the return of premium options up to age 67 and the choice of a daily maximum benefit ranging from $50-$500, is not available in California, Florida, Washington, D.C., Indiana, Delaware, Massachusetts, Montana, North Dakota, New York, South Dakota, Connecticut, and Hawaii.
Potential customers in those states have access instead to the Transcare II plan.
Transamerica doesn’t offer policy information or quotes online; you must speak to an agent to obtain that information.
Best for Federal Employees & Active Duty Service Members : John Hancock
John Hancock is the sixth-largest individual life insurer in the U.S. with a financial strength rating of A+ (Superior). It offers long-term care and critical illness coverage on life insurance policies through living benefits coverage riders. It also administers the Long-Term Care group insurance plan for Federal Employees, the Federal Long Term Care Insurance Program (FLTCIP).
We chose John Hancock as the best long-term care insurance for federal employees and uniformed service members because it is guaranteed portable, renewable, and provides international coverage.
The Federal Long Term Care Insurance Program (FLTCIP) provides coverage for services at home, in assisted living facilities, adult daycares, and nursing homes. It includes a stay-at-home benefit, covers informal care provided by friends and family (excluding spouses and household members), and provides benefits internationally.
To qualify for coverage with the FLTCIP, you must be a federal employee, a U.S. Postal Service Employee eligible for FEHB, an active member of the military on active duty or full-time National Guard duty for more than 30 days, or a qualified relative.
There is no online quote, but rates are available in the program book. To apply, you’ll fill out an online form detailing the coverage options you want including a daily benefit amount, a benefit period, and an inflation protection option.There are four coverage options to choose from, and premiums start at $19.79 a month for ages 18 to 30 and increase every year until age 80.
John Hancock no longer sells long-term care coverage to the general public outside of this program for federal employees. However, old policies remain in force.
An alternative to a stand-alone LTC policy is purchasing a long-term care rider on a life insurance policy. This can reduce your cost and provides coverage for a death benefit and/or living benefits (like long-term care) as you need them.
What Is Long-Term Care Insurance?
Long-term care insurance is a type of supplemental insurance coverage that you can buy as a stand-alone product or as a rider added to a life insurance policy. Long-term care insurance provides coverage for in-home or in-facility care if you are unable to care for yourself and require assistance due to chronic illness, disability, or other conditions that do not allow you to perform basic daily functions of living on your own.
Twenty percent of 65-year-olds will need long-term care for five years or more as they age, and people who are 65 years old today have a 70% chance of needing some form of long-term care in the future.
Long-term care insurance can help provide financial benefits to help you cover Activities of Daily Living (ADL) such as bathing, dressing, and eating as well as Instrumental Activities of Daily Living (IADL) including taking medication, shopping, and caring for pets.
How Does Long-Term Care Insurance Work?
In order to be eligible for LTC benefits, you must meet specific criteria: the benefit trigger and the elimination period.
The benefit triggers are the insurance company’s definition of when you are eligible for care. Based on the policy you choose, the criteria may vary. An insurance company nurse or professional will assess if you meet the criteria. Typical examples of a benefit trigger include being unable to perform a certain number of ADLs (this can range from two to six) or when you have a cognitive impairment.
The elimination period is the time frame in which your benefits are not paid. Your elimination period may involve a waiting period or a deductible clause. Each insurer has its own elimination period, and it may be expressed as a “Service Day Deductible,” where you must receive coverages each day during the term, or a “Calendar Day” or “Disability Day” deductible, which does not require services for each day in the term.
What Does Long-Term Care Insurance Include?
Long-term care insurance policies generally include coverage for these services:
- Nursing home care
- Assisted living
- Home skilled services
- Home personal services
- Respite care
- Adult daycare
- Homemaker/chore services
- Hospice care
- Family care
- Informal care
- Alternate care
Since the frequency and which ones are covered in which type of policy differs among insurers, make sure you check with the company you’re considering using to verify that it covers the service you need.
What Does Long-Term Care Insurance Exclude?
Companies who write long-term care insurance generally require potential customers to provide medical information. If you have preexisting conditions such as Parkinson’s disease or diabetes, some companies may decide they will not insure you.
However, once you have a policy, there should not be any post-claim underwriting. As long as you made full medical declarations when you applied and the company accepted you, you should be covered for LTC benefits according to the conditions of the policy you selected.
Long-term care policies have other exclusions. Some may contain exclusions related to location. For example, they may not pay benefits if you are outside of the U.S. or Canada. Policies may also exclude long-term care related to substance abuse. Some LTC policies exclude care provided by family members
Since coverage and exclusions are based on the policy conditions, always ask what the exclusions are when you compare coverages.
What Does Long-Term Care Insurance Cost?
The average cost of LTC insurance by leading providers ranges by age and sex along with other variables including:
- The coverage options you choose
- Whether you want inflation protection or not
- Amount of coverage selected
- Length of your long-term care coverage
- Benefit triggers and elimination periods
To save on cost and keep pricing affordable, some companies will provide the option to change the benefit options over time. For example, with Transamerica, you can start with a 0% inflation policy, and then when you can afford it, you can move into a 3% or 5% inflation rate.
According to the AARP, the average yearly premium for long term care insurance is $2700. Note that premiums adjust based on your age, how much coverage you want and for how long, and whether or not you want inflation protection.
Additionally, the NAIC recommends that when purchasing long-term care insurance, you ask the insurance company whether it has increased the premiums on the long-term care insurance policies it sells and ask if a company’s personal worksheet includes the company’s premium increase history.
Tips for Comparing Long-Term Care Insurance Options
When searching for long-term care coverage, consider hybrid policies through a life insurance company, and compare this with the cost or option that a stand-alone policy will offer.
Once you have some quotes, you’ll want to ask:
- How do you qualify for benefits?
- What the benefit triggers are for you to be eligible for coverage (do you have to meet two, three, or more)?
- When does coverage start?
- What are qualified services or places?
- Who is a qualified caregiver?
- Can family members be paid?
- Does the policy pay for training?
- Is cognitive impairment covered?
- What riders or discounts are available?
- If there are daily limits (and how much)?
- How long will you be eligible for coverage (some policies limit coverage, for example, to two, four, or six years of benefits, or “lifetime)?
You’ll also want to ask if your coverage includes inflation protection and the elimination period for different levels of care.
How We Chose the Best Long-Term Care Insurance Companies
To select the best long-term care insurance companies, we reviewed coverage offerings, insurer financial strength ratings, and complaints trends established through state regulators by the NAIC. We looked at customer satisfaction rankings on independent surveys, online reviews, consumer guides, and insurer websites. We also reviewed underwriting guides from various insurers to verify coverage and eligibility criteria for each company along with options provided in stand-alone policies as well as hybrid options.
After reviewing all the factors, we selected the best long-term care insurance companies offering stand-alone products on a national level that offer expertise in the coverage, strong financial stability, and coverage advantages to address the various needs, budgets, and lifestyles of our readers.