Long‑Term Care Insurance Premium Estimator
Estimate your long‑term care (LTC) insurance premium and projected future daily benefit. Adjust age, health class, benefit size, elimination period, benefit duration, and inflation protection.
Why Long‑Term Care Costs Surprise Families
Many people plan carefully for retirement income but underestimate the cost of long‑term care. Long‑term care is not just “nursing homes.” It includes paid help with activities of daily living—bathing, dressing, eating, walking, and supervision for cognitive decline. The care might be delivered in your home by aides, in an assisted‑living community, or in a skilled nursing facility. Because these services are labor‑intensive and needed for months or years, costs often rival or exceed housing expenses.
In the U.S., Medicare generally does not cover custodial long‑term care. Medicaid does cover it, but only after you meet strict income and asset limits. That gap leaves a large middle group—people with savings but not enough to self‑fund years of care—exposed. Long‑term care insurance exists to reduce that exposure, turning a potentially open‑ended liability into a predictable premium. The challenge is deciding whether coverage is worth the cost, and if so, what policy structure makes sense.
This estimator gives you a realistic, scenario‑based premium range. Real underwriting uses medical history, gender, state, carrier pricing, and discounts. But even a simplified model helps you see how choices like inflation protection or benefit duration change both premiums and future coverage.
How LTC Insurance Works in Practice
Most modern LTC policies reimburse up to a daily (or monthly) maximum when you meet “benefit triggers.” Triggers usually require help with at least two activities of daily living (ADLs) or a cognitive impairment diagnosis. Policies also include:
- Daily benefit. The maximum reimbursement per day in today’s dollars.
- Benefit period. How long benefits can be paid (e.g., 3 years, 5 years, or lifetime).
- Elimination period. A waiting period before benefits start (commonly 30, 60, 90, or 180 days). Longer waits reduce premiums.
- Inflation rider. Increases the daily benefit over time to keep pace with rising care costs.
- Shared care. For couples, a pool of benefits shared between spouses.
The Premium Drivers
Premiums move mainly with age and health. Buying at 55 is often far cheaper than buying at 65 because you will pay premiums longer and because carriers price in rising claim probability. Benefits and riders then layer on top. A bigger daily benefit, longer benefit period, shorter elimination period, and stronger inflation rider all raise premiums.
Estimator Formulas
This tool uses a transparent approximation. Start with a base annual premium as a percent of annual benefit for a 55‑year‑old in standard health, then apply multipliers. The annual benefit is your daily benefit times 365, capped by your benefit period.
We then estimate the annual premium:
The base rate in this estimator is 2.0% of annual benefit at age 55 for a 3‑year policy with a 90‑day elimination period and no inflation rider. The multipliers are chosen to roughly match typical market patterns. Your real quote can differ, but the directionality is reliable.
Worked Example
Consider Sam, age 60, in standard health. He wants a $180/day benefit, 3‑year benefit period, 90‑day elimination period, and a 3% compound inflation rider.
Annual benefit today is $180 × 365 ≈ $65,700. Base premium at age 55 is 2.0% × $65,700 ≈ $1,314/year. Age 60 adds about a 1.35× factor. Standard health is 1.0×. A 3% compound inflation rider adds about 1.5×. Other factors are neutral. Estimated premium: $1,314 × 1.35 × 1.5 ≈ $2,660/year, or about $222/month.
What about future benefit? If Sam buys now and needs care at age 80, a 3% compound rider grows daily benefit by (1.03)²⁰ ≈ 1.81×. His $180/day becomes roughly $326/day. That makes the policy far more likely to keep up with real care costs.
Comparison Table: How Riders Change Premiums
| Policy Choice | Typical Effect on Premium | Effect on Coverage |
|---|---|---|
| Increase daily benefit | Rises roughly proportionally | Higher reimbursement cap |
| Extend benefit period (3→5 yrs) | +30% to +60% | More total pool of benefits |
| Shorter elimination period (90→30 days) | +15% to +30% | Benefits start earlier |
| 3% compound inflation rider | +40% to +70% | Benefit grows over time |
| Shared care for couples | +10% to +20% | Flexibility if one spouse needs more care |
When Buying Earlier Pays Off
A common question is whether to buy LTC insurance in your 50s or wait until your 60s. Buying earlier usually lowers the premium per unit of benefit because claim risk is lower. But you will pay premiums for more years. The tradeoff depends on your health trajectory and the likelihood that you will remain insurable later. Many applicants in their late 60s are declined or offered substandard rates because of diabetes complications, mobility issues, or even a history of falls. If LTC coverage is part of your plan, purchasing in the late 50s or early 60s often balances affordability with insurability.
This is similar to term life insurance timing: if the risk of becoming uninsurable is meaningful, earlier purchase can be a form of hedging. The calculator’s age factor helps you see how much waiting changes premium estimates under otherwise identical assumptions.
Self‑Funding vs Insurance
Some households can self‑fund long‑term care because their assets are large relative to expected needs. Others cannot, and insurance provides genuine protection. A quick way to frame the decision is to compare your retirement liquid assets to a plausible worst‑case care cost. If assisted living or home care in your area costs $6,000 per month today, and you might need care for 4–6 years, that is $288k–$432k in today’s dollars before inflation. If your portfolio could absorb that without derailing a spouse’s retirement, you may lean toward self‑funding. If not, transferring a portion of that risk to an insurer can be rational even if you never claim.
Hybrid and Linked‑Benefit Policies
Traditional standalone LTC insurance is not the only option. Many carriers now sell hybrid life‑LTC or annuity‑LTC policies. These are sometimes called “linked‑benefit” products. You pay a larger premium (often as a lump sum or limited‑pay schedule). If you need long‑term care, the policy pays benefits. If you never need care, your beneficiaries receive a life insurance death benefit or annuity value. The main appeal is psychological: people dislike paying premiums for something they might never use. The tradeoff is that hybrids can be less flexible and more expensive per dollar of LTC benefit compared to a good traditional policy.
This estimator models traditional LTC premiums. If you are considering hybrids, use the same daily benefit and inflation logic, but ask the carrier to show equivalent LTC benefit per premium dollar and any surrender values.
Interaction With Medicaid and Family Planning
Medicaid is the backstop for long‑term care, but qualifying requires spending down assets and meeting income rules. Some states participate in “Partnership” programs where certain LTC policies allow you to keep more assets if you later need Medicaid. Even without a formal partnership policy, LTC insurance can delay or prevent spend‑down, preserving a spouse’s security or leaving an inheritance. Families with strong caregiving capacity may still use insurance to pay for respite care, home modifications, or to avoid burning out a primary caregiver.
Limitations and Assumptions
This is a scenario estimator, not an insurer quote engine. It assumes:
- Unisex pricing and average national rates; many states and carriers price differently by gender.
- Health class is simplified to “preferred/standard/substandard.” Real underwriting is more granular.
- Policy multipliers are approximate and based on typical ranges.
- Premiums are level and do not include future rate increases. Historically, some carriers have raised rates on legacy blocks.
Use this tool to compare designs and timing, then request real quotes from multiple carriers. If your premium feels high, explore levers in this order: lengthen elimination period, reduce benefit period, then reduce daily benefit, while keeping inflation protection if you expect care decades from now.