Long‑Term Care Insurance Premium Estimator

How to use this long‑term care insurance premium estimator

This calculator helps you estimate the premium for an individual long‑term care (LTC) insurance policy and see how your daily benefit might grow in the future. It is designed for illustration and education, not for providing a binding quote. Actual premiums and benefits will vary by insurer, state, and underwriting decisions.

Start by entering your current age, health class, and the daily benefit you want the policy to provide if you need care today. Then choose how long benefits should last (benefit period), how long you are willing to wait before benefits begin (elimination period), and whether you want inflation protection or shared care for couples. Finally, you can enter an expected claim age to project what your daily benefit might look like by the time you actually need care.

Key inputs and formulas behind the estimate

The tool uses a simplified actuarial model that starts with a base premium for a 60‑year‑old, standard‑health applicant and then adjusts that premium up or down based on your inputs. It also projects how the daily benefit could increase over time if you select an inflation rider.

At a high level, the premium estimate is calculated in three steps:

1. Start with a base premium per dollar of daily benefit for your age and health class.
2. Adjust for policy design choices such as benefit period, elimination period, inflation protection, and shared care.
3. Multiply by your chosen daily benefit and apply minimum and maximum bounds for reasonableness.

The projected daily benefit at your expected claim age uses a standard compound growth formula when an inflation rider is selected. In mathematical terms, the projected daily benefit B at claim age is:

where:

• B_today is the daily benefit you choose for today (for example, $200 per day).
• i is the annual inflation rate for your rider (for example, 0.03 for 3% compound).
• n is the number of years between your current age and expected claim age.

For simple interest riders, the tool uses a linear approximation instead of compounding to show how benefits might increase each year.

Understanding the fields on the calculator

Each input represents a common decision point in LTC policy design:

• Current age – Younger applicants usually pay lower premiums for the same coverage. Premiums typically rise quickly after your mid‑60s because there is less time to collect premiums before potential claims.
• Health class – Insurers often group applicants into preferred, standard, or substandard risk categories. Better health can reduce premiums; serious health conditions may increase premiums or limit available options.
• Daily benefit today ($/day) – The maximum amount the policy will reimburse per day of covered care if you needed care today. Higher daily benefits increase premiums but may cover more of your future care costs.
• Benefit period (years) – How long benefits could last if you use the full daily benefit. A longer benefit period (for example, five or six years versus three years) generally means higher premiums and more total potential coverage.
• Elimination period – The waiting period before benefits begin after you are eligible for LTC. Choosing a longer elimination period (for example, 90 or 180 days instead of 30 days) usually reduces the premium, but you must be prepared to pay for care out of pocket during that time.
• Inflation rider – An optional feature that increases your daily benefit over time to help keep up with rising care costs. Compound riders grow benefits more aggressively than simple riders and generally cost more.
• Shared care (couples) – For couples who both buy LTC coverage, a shared care option may let one spouse use part of the other’s unused benefits. This can improve flexibility but usually adds to the premium.
• Expected claim age – An estimate of the age at which you might first need LTC. The calculator uses this to project your daily benefit at that point, based on your chosen inflation rider.

Interpreting your premium and benefit estimates

When you run the calculator, you will typically see two key outputs: an estimated annual or monthly premium, and a projected daily benefit at your expected claim age. Use them together rather than in isolation.

If the projected daily benefit at claim age is much lower than the current cost of assisted living or nursing home care in your area (adjusted for inflation), your coverage may not be sufficient. On the other hand, if the premium is higher than you can realistically sustain over time, there is a risk you could lapse the policy before ever using it.

Changing one input at a time can help you see trade‑offs. For example, you might lower the daily benefit slightly but add a 3% compound inflation rider, or choose a somewhat longer elimination period to make a stronger inflation rider affordable.

Example: comparing two long‑term care policy designs

To make the trade‑offs more concrete, the table below compares two simplified scenarios for a hypothetical applicant:

Scenario A may appeal to someone focused on keeping premiums as low as possible, while Scenario B may suit someone more concerned about long‑term purchasing power and is willing to pay more today for stronger future protection.

Assumptions and limitations of this LTC premium estimate

This tool is intended for education and planning conversations. It simplifies many real‑world factors:

• Illustrative pricing only – The calculator uses generic pricing relationships (for example, higher age and longer benefit periods mean higher premiums). It does not reflect any one insurer’s rates, underwriting guidelines, or product designs.
• No state‑specific rules – Actual LTC premiums and policy features can vary significantly by state due to regulation, partnership program rules, and local market conditions. Those variations are not modeled here.
• Simplified health classes – Real underwriting decisions consider detailed medical history, build, family history, medications, and more. The simple preferred/standard/substandard categories here are only rough proxies.
• Inflation and cost trends – The assumed inflation rates apply only to your benefit amount. Actual care costs in your area may rise faster or slower than the rider assumptions, and future inflation is inherently uncertain.
• Claim timing – The expected claim age input is just an estimate. Some people will never need LTC, while others may need it much earlier or later than expected.
• Coverage scope – The model focuses on daily benefit and benefit period. It does not account for every rider or feature available in the market (such as return of premium, survivorship, or shared benefit banks with complex rules).

Important: Results from this calculator are estimates for educational purposes only. They are not an offer of insurance, not a guarantee of coverage or pricing, and do not replace a personalized quote from an insurance company. For actual premiums and policy recommendations, speak with a licensed insurance professional.

When to consider long‑term care insurance and next steps

Many people begin exploring LTC insurance in their 50s or early 60s, when they are still healthy enough to qualify but close enough to retirement to think about care risks and budgets. The right time for you depends on your health, assets, family situation, and risk tolerance.

After you review your calculator results, consider these next steps:

• Compare your projected daily benefit at claim age with current LTC costs in your area, adjusted for inflation.
• Experiment with different benefit periods, elimination periods, and inflation riders to see which combinations feel both affordable and protective.
• Discuss your findings with a licensed LTC insurance agent or financial planner who can provide personalized quotes and help you evaluate carrier‑specific options.
• Review how potential premiums fit into your long‑term budget so you are less likely to drop coverage later.

Used thoughtfully, this estimator can help frame more informed conversations about how LTC insurance might fit into your broader retirement and care‑planning strategy.

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

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.