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What is Long Term Care Insurance? Do You Need It?


Are you aware how likely it is that you’ll need long-term care in the near-future? Chances are that you won’t die in a car accident or a horrific plane crash. Nope, most people die in their old age after their body just can’t function any longer. Kind of morbid to think about I know, but I urge you to take a few minutes because your decisions regarding long term care today could very well impact your entire family in the future!

So How Many People Really End Up In a Long Term Care Facility?

Like I stated in the last paragraph, you might be shocked at the percent of people that end up in a long term care facility. A staggering 60% of individuals over the age of 65 will need at least some long term care. If you have a spouse, that means that statistically speaking, at least one of you WILL need some form of long term care in your lifetime!


How Much Does Long Term Care Cost?

If you find yourself in a long term care facility, you might kick the bucket just by looking at the monthly bill for your stay! On average, long-term care costs $5,000 every month! That’s over $70,000 a year! You might have $400,000 stashed away for your retirement fund and think that you’re doing pretty good, but you know what? If you need long term care, your entire fund will be gone in less than 6 years. Scary huh? That’s why long term care insurance is so vital.

Some of you may think that your current health insurance will cover your long term care expenses. This is typically not the case. In fact, if you’re counting on Medicare, they’ll most likely only cover 4% of your long term care expenses. That’s only $2,800 of your $70,000 bill per year. That’s not a huge help.

So What Does Long Term Care Insurance Cover?

As with any insurance, every policy is different, but general speaking, here’s what long term care insurance will get you:

  • Home Health Care Services
  • Nursing Home Services
  • Assisted Living Services
  • Adult Day-Care Services

These services will most likely be covered 100% by your long term care insurance provider. So, rather than burning through your retirement savings, your insurance policy will cover your long term care expenses.

What Does This Insurance Cost Per Month?

If you are over 65, long term care insurance definitely isn’t cheap, but it might pay off big time in the long run. The insurance could cost you $300 a month, but what if, at age 75, you need full long term care? After that those 10 years of premiums, you would have paid in $36,000 to the insurance company. This sounds like a ton, but after 6 months in the long term care facility, all of those payments already paid for themselves! If you have a disease like Alzheimer’s, it’s quite likely that you’ll be needing long term care for 10 years. In this case, long term care insurance just saved you $684,000! I’d say it’s worth looking into, wouldn’t you?



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Long term care insurance is definitely an costly proposition for most of us, therefore it is worth making the effort to think about all of the details and possibilities prior to signing the contract and begin having to pay rates for any LTC insurance plan.

    • Yep, it’s a big decision and is fairly costly. But, if you have less than $1.5 million in the bank, it’s almost necessary. Otherwise, your kids will be shelling out their wallets for you in the near future.

  2. Ahh I see as my balance of my bank account I think I need it 🙂 thanks for your advise

  3. Now that 40 states have “LTC Partnership programs” you do not have to buy an expensive “unlimited” long-term care insurance policy. You only need to buy an amount of long-term care insurance equal to the amount of assets you want to protect for yourself, your spouse or partner, and/or your heirs.

    These government-approved policies are like a traditional long-term care policy with additional consumer protection features.

    Here’s an explanation of how these policies work:

  4. Aren’t children supposed to be my long-term care insurance? j/k

    I wonder how sensitive premiums are to the rapidly increasing costs of health care. It might also be wise to get insurance as soon as possible to lock in a lower premium (or do the premiums adjust?)

    • Lol. There are quite a few parents who are depending on their children to take care of them, but I don’t think this is a wise decision. Many professionals suggest that you should have long term care insurance at age 65. The premiums may adjust to a higher rate, but it’ll be better than missing the boat entirely later in life.

  5. My husband and I are lucky that both sets of parents have planned exceptionally well for their retirement years… still, neither has long-term care insurance because of the pricy premiums, and we often discuss whether it’s a ticking time bomb.

  6. Long term care insurance is very useful and important for us. In any case if any accident occurred with u your family will not suffer from any kind expensive problems. Its also useful for elders who is above 65 years helps them not to depend on others. So long term care insurance is useful for all peoples who did not want to depend on other people.

    • The ideal method would be to have $4 million (or more) in the bank, but this just isn’t the case for quite a few people. If they’re over 65 with only a couple hundred thousand, then Long Term Care is a must.

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