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By Ana Reina
February 19, 2021
2021 Money Best Long Term Life Insurance
Money; Shutterstock

As you get older, there’s a possibility you may need help with things you’ve always done yourself — such as bathing, dressing, and eating.

70% of people over the age of 65 will require some form of long-term care and support later in life, according to LongTermCare.gov.

Long-term care insurance is designed to help you pay for those costs.

Company Pool of Money/Benefit Period Maximum Daily/Monthly Benefit Elimination Period
Northwestern Mutual: Best for Customer Satisfaction Benefit Period: 3 or 6 years $1,500-12,000 per month in $100 increments 6, 12, 25, or 52 weeks
Mutual of Omaha: Best for Discounts • Benefit Period: 1-5 years
• Pool of Money: $50,000-500,000
$1,500-10,000 per month 0, 30, 60 90, 180, or 365 calendar days
New York Life:
Best for Financial Stability
Benefit Period: 2, 3,5, or 7 years $50-400 per day 90 or 180 days
Lincoln Financial: Best for Immediate Benefits Benefit Period: 2-7 years Reimbursement-based benefit approach No deductible or elimination period
Transamerica: Best for Competitive Prices Pool of Money: $73,000-876,000 $100-400 per day 0, 30, 60, 80, or 180 days
Golden Care Insurance: Best Marketplace Varies by company Varies by company Varies by company
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The Best Long-Term Care Insurance Policies of 2021

Northwestern Mutual Long-Term Care Insurance

Best for Customer Satisfaction

A.M. Best Rating J.D. Power Score
A++
790/1000

Northwestern Mutual made our list because of its superior financial strength and above-average customer service rankings.

Northwestern Mutual is also one of Money’s highest-rated life insurance companies for customer satisfaction. It has a remarkably low complaint index for long-term care policies, according to the NAIC’s National Complaint Index Report.

Northwestern Mutual offers traditional long-term care insurance policies and long-term care coverage through its life insurance policy riders.

Its QuietCare® traditional long-term care policy lets you select a maximum monthly benefit from $1,500 up to $12,000 a month, in $100 increments. The plan offers four elimination period alternatives: 6, 12, 25, or 52 weeks before you start receiving benefit payments.

As for the benefit period, there are only two choices: six or three years of protection. Additionally, Spousal and Companion Discounts available for joint policies for up to 30%.

Pros

  • Premium Payment option waives premium if you become eligible for benefits.
  • Long-term care policies are “participating” policies, eligible for dividends.

Cons

  • Doesn’t provide online quotes.
  • The policy will only cover care services from providers approved by the plan, and not all care providers approved by the policy are certified in every state.

Other Relevant Details

The company offers a Caregiver Training Benefit for a friend or family member. This benefit is equal to 20% of the Maximum Monthly Limit.

Mutual of Omaha Long-Term Care Insurance

Best for Discounts

A.M. Best Rating J.D. Power Score
A+
789/1000

For those looking to save on their long-term care insurance costs, Mutual of Omaha offers three types of discounts, with up to 30% in potential savings. Mutual of Omaha was also the fifth-highest-rated company for customer service in J.D. Power’s 2020 U.S. Life Insurance Study and has a strong financial-stability rating.

Mutual of Omaha offers long-term care insurance coverage exclusively as a stand-alone product. Among the options offered are The MutualCare® Custom Solution and The MutualCare® Secure Solution policies, which include:

  • Monthly benefits from $1,500 to $10,000
  • Elimination periods of 0, 30, 60, 90, 180, or 365 calendar days
  • Policy limit of $50,00 to $500,000
  • Waiver of Premium benefit
  • Optional Inflation Protection benefit

Pros

  • Offers a discount of 30% for couples who purchase the same policy.
  • Offers a discount of 15% to individuals in good health.

Cons

  • Doesn’t provide online quotes.
  • To qualify for the couple’s discount, you must be legally married, in a registered domestic or civil union, or have lived continuously as a couple in the same permanent residence for the last 3 years.

Other Relevant Details

When it comes to benefit payments, Mutual of Omaha allows you to choose cash or reimbursement, with the flexibility of switching from cash benefit to reimbursement benefit from one month to the next.

New York Life Long-Term Care Insurance

Best for Financial Stability

A.M. Best Rating J.D. Power Score
A++
784/1000

New York Life is our top pick for the best long-term care insurer for financial stability. It has superior financial ratings — the third-highest of any insurance company on our lists, regardless of type — and is one of the nation’s oldest mutual insurance providers.

New York Life is also one of our top-ranked companies for life insurance. It has a high customer satisfaction rating from J.D. Power and a below-average number of complaints filed with the National Association of Insurance Commissioners (NAIC.)

New York Life offers two types of long-term care insurance options: traditional stand-alone policies and combination long-term care and life insurance policies. Its maximum daily benefits range from $50 to $400 per day and waiting periods between 90 and 180 days. You can choose a benefit period of 2, 3, 5, or 7 years.

Plans can cover nursing homes and assisted living facilities. Policies covering home and community care can range from 50% to 100% in daily coverage.

Pros

  • Policies can cover 100% of care costs.
  • Premiums are guaranteed not to increase on combination policies.

Cons

  • Doesn’t provide online quotes.
  • Benefit period options and covered benefits may vary by state.

Other Relevant Details

Offers a money-back guarantee for hybrid policies if the insured doesn’t use the policy.

Lincoln Financial Long-Term Care Insurance

Best for Immediate Benefits

A.M. Best Rating J.D. Power Score
A+
749/1000

Lincoln Financial made the best long-term care insurance list because of its no-elimination-period plans, along with a strong financial-stability rating.

Unlike other insurers, Lincoln Financial offers two long-term care insurance plans with no elimination period for covered services: MoneyGuard® II and MoneyGuard® III.

Lincoln’s MoneyGuard® II is a universal life insurance policy with a long-term care acceleration-of-benefits rider that advances the death benefit payments to cover long-term care expenses. It has no deductible period for coverage on nursing homes and assisted living.

Since MoneyGuard II is a life insurance policy, its premiums are guaranteed to stay the same from the time of purchase. If the policyholder doesn’t need long-term care coverage, their dependents may receive a tax-free benefit or complete return of premium after five years.

The MoneyGuard® III plan offers lenient underwriting, with no medical exams or lab tests needed for approval, discounted pricing for couples, and various inflation protection options.

Pros

  • Income tax-free reimbursements are available for approved long-term care costs.
  • Benefits are available internationally.

Cons

  • Doesn’t offer quotes online.
  • Product features and benefits may vary state by state.

Other Relevant Details

Lincoln allows you to purchase simple (3%) or compound (3 or 5%) inflation protection to increase your long-term care benefits, subject to state availability. With that option, the monthly maximum benefit will increase by a set amount on each policy anniversary, depending on the protection selected.

Transamerica Long-Term Care Insurance

Best for Competitive Prices

A.M. Best Rating J.D. Power Score
A
734/1000

Transamerica made our list mostly because it allows policyholders to customize their coverage based on the price range they can afford. It also offers life insurance products with long-term care riders, to provide that option to those who want it. It has a solid financial-stability rating.

Additionally, the company offers a waiver of premium benefit to protect policyholders if they cannot make payments while receiving benefits.

TransCare II’s maximum daily benefit ranges from $100 to $400 per day, and the elimination period from 0 days to 180 days.

On the other hand, TransCare III® offers maximum daily benefits between $50 and $500 and elimination periods from 0 days up to 365 days.

Add-ons available to both plans include a shared care benefit rider, which allows couples to share a pool of benefits if one spouse exhausts theirs, and long-term care planning with the help of an Optional Care Coordinator.

Pros

  • It offers a rider to switch from daily benefits to monthly benefits.
  • Policies are highly customizable and eligible for discounts.

Cons

  • Doesn’t offer quotes online.
  • Pool of money varies by state.

Other Relevant Details

Transamerica offers a variety of discounts to help keep policies accessible in price. Couples may be eligible for a discounted rate of up to 30% versus standard individual rates if they apply for the same benefits. Healthy applicants may also apply for a preferred health discount of up to 10% off their standard premium rates.

Golden Care Long-Term Care Insurance

Best Marketplace

As an online insurance broker, Golden Care partners with industry leaders to help customers find the best options for their long-term care needs.

The company assigns clients a long-term care specialist that will work with them on your care plan and guide them toward the insurer that best aligns with their situation.

Golden Care partners with Mutual of Omaha, Transamerica, Aetna, Thrivent, Securian Financial, OneAmerica, and National Guardian Life Insurance Company.

Pros

  • Specializes in critical care, life and long-term care hybrid policies, life insurance, annuities, and prescription drug coverages.

Cons

  • It doesn’t offer policies directly but connects customers with insurance carriers instead.
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Long-Term Care Costs Are Rising

With each passing year, the cost of long-term care rises exponentially in the U.S. From 2019 to 2020, the average cost of assisted living facilities increased by 6.15%, homemaker services by 4.44%, and home health aide services by 4.35%.

A study by Vanguard Research and Mercer Health and Benefits shows that half of individuals will end up shouldering the cost of long-term care, and there is a slight but real chance that they will require care for multiple years.

The risk of requiring extended care increases for women, who need care longer than men by an average of 1.5 years.

Long-term care costs can range in price depending on the services provided and where they are rendered, whether in-home, at an assisted living facility, or a nursing home facility.

According to Genworth’s 2020 Cost of Care Survey, the daily median cost for homemaker services is $147, while a home health aide costs $150. Assisted living costs are lower, with a daily average of $74 for adult daycare and $141 for assisted living facilities.

Below, we break down the annual cost of various options:

  • Homemaker services: $53,768
  • Home health aide: $54,912
  • Adult day health care: $19, 240
  • Assisted living facility: $51,600
  • Semi-private room in nursing home: $93,075
  • Private room in a nursing home: $105,850

Like most other services, the cost of care varies by location. For example, a private room in the New York area costs $425 per day, while a private room in Alaska could run you up to $1,196.

Get a sense of the cost of care in your area with the Genworth Cost of Care Survey. It offers various alternatives tailored to your personal and financial circumstances.

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The Key Ways To Pay for Long-Term Care

You can turn to several types of insurance policy and a number of government programs for help in covering long-term care costs. Here’s more on those options.

Stand-Alone Long-Term Care Insurance Policies

A long-term care insurance policy can reimburse you some of the cost of care you receive at home, at a nursing home, or in a residential care facility.

This type of insurance provides flexibility concerning the kind of care you receive, when and where you receive it, and for what duration.

Stand-alone long-term care insurance policies provide a monthly benefit amount that is paid out during a benefit period. Benefit periods typically range from two to five years, and benefits are disbursed after an elimination period, which customarily ranges between 30 days to 90 days.

You may add riders to your policy that increase or modify coverage, such as one that adds inflation protection to prevent your benefit from losing value as the cost of living increases.

Hybrid Long-Term Care Insurance Policies

Hybrid long-term care policies combine two coverages under one policy, usually a life insurance policy or a qualifying annuity with a long-term care rider.

The advantages of a hybrid life/long-term care insurance policy include:

  • The policy will pay out a guaranteed death benefit if the policyholder doesn’t use long-term care insurance.
  • Premium payments are guaranteed not to increase over the life of the policy.
  • Underwriting is less strict, and pricing for women could be lower.

But these policies also have drawbacks, at least for some:

  • Premiums can be far higher than those for long-term care insurance.
  • Buying life-insurance late in life may not be the best financial move, according to many planners.

Ultimately, the choice to purchase a stand-alone policy or a hybrid one will depend on your personal and financial goals.

Government Programs

Medicare and Medicaid

As a joint federal and state public assistance program for low-income Americans who need healthcare, Medicaid is the largest public payer for long-term care services and supports. Medicare, on the other hand, only covers limited long-term services and supports (LTSS).

The caveat is that not all nursing homes accept Medicaid.

If you buy private long-term care insurance coverage, you run the risk of “spending down” your benefits while at the nursing home. If this happens, you could qualify for Medicaid, so make sure the nursing home is eligible for that program.

In contrast, Medicare only offers very limited coverage for short-term care for an illness or injury if you meet certain conditions, primarily if you need skilled services or rehabilitative care.

These programs vary by state, and eligibility is based on your income and assets. Some states have higher income limits for nursing homes.

If you haven’t qualified for Medicaid in the past, you may while in a nursing home. For more information on the coverages in your state, contact your state’s Medicaid office.

Veterans Health Administration

The Veterans Health Administration and other state-run assistance programs offer aid to cover long-term care expenses to qualifying veterans and low-income communities.

The Veterans Aid & Attendance Pensions Benefit is another federal program that provides long-term care assistance coverage for veterans and their spouses.

The benefit is tax-free and can be used for in-home care, community and assisted living, or paying for a private nursing home facility. However, it does have some requirements, such as wartime service, a need for financial assistance, and the inability to perform at least one ADL.

Savings

As our guide to long-term care insurance explains, people who are unusually well funded for retirement can likely bear the costs of long-term care without help.

Such self-funding is especially viable if you own the house you live in, are willing to sell it to cover any long-term care costs, and have someone who can help facilitate the sale and move you.

Obviously, this isn’t an option for those who lack such resources, or who prefer not to risk depleting savings to pay for long-term care, perhaps because it’s a priority for them to pass along their wealth to heirs.

How Long-Term Care Insurance Works

Long-term care insurance provides coverage for in-home or facility care if you cannot independently take care of yourself due to a cognitive impairment such as Alzheimer’s or dementia or a chronic illness.

It can also cover you if you cannot perform at least two of the six basic activities of daily living: personal hygiene, dressing, using the toilet, ambulation/transferring, continence, and eating.

According to the U.S. Administration on Aging (AoA), “one-third of today’s 65-year-olds may never need long-term care support, but 20 percent will need it for longer than five years.”

The same research points out that 65-year-olds today will require some form of long-term care and support in their remaining years.

A long-term care insurance policy can give you the financial security required to help you do the activities described above. Still, the policy will only go into effect after your benefits are triggered and the elimination period has passed.

Depending on your policy, specific triggers make your coverage come into effect. These typically include not being able to perform between two to six of the activities of daily living or having a cognitive impairment.

The elimination period, also known as the deductible or waiting period, is the amount of time you must wait before you start receiving your long-term care insurance benefits.

“Benefits are paid either monthly or daily, with traditional LTC insurance reimbursing the actual cost of the care up to policy maximums,” says Greg Kingler, director of wealth management at the Government Employees’ Benefit Association.

Long-term care insurance covers costs that regular health insurance doesn’t, such as personalized care in your home, a nursing home, an assisted living facility, or an adult daycare center.

The Average Cost of Long-Term Care Insurance

The cost of long-term care insurance rises as you age. The factors that determine your policy premiums include:

Age and Health

It’s safe to say that the younger you purchase a policy, the higher your likelihood of being in good health and, therefore, qualifying for a lower premium. Starting young also reduces the risk of having a condition that might trigger even-higher premiums or disqualify you altogether from getting coverage.

In 2019, 76.4% of new long-term care insurance buyers were between the ages of 50 and 69, with the highest sales in the 55 to 59 age bracket, according to a study by the American Association for Long-Term Care Insurance.

The highest percentages of applicants whose requests for coverage were denied were those in the 60 to 79 age bracket.

Gender

According to data from the Administration on Aging, on average, women outlive men by about five years. Since the odds of a woman making a claim are higher than those of a man, premiums for women tend to be more expensive.

Price index data from 2020 published by the American Association for Long-Term Care Insurance found that the average annual premium for long-term care insurance is $1,700 for a single male aged 55 in good health and $2,675 for a single female aged 55 in good health.

Marital Status

The cost of long-term care insurance tends to be lower for married couples than for single people.

While a single 55-year-old man would pay $1,700 for coverage and a single woman about $975 more, the combined cost of an LTCI policy for these individuals as a couple would be $3,050. The value of the benefits when the policyholders reach 85 would equal $386,500 for each.

Insurance Company

Prices vary depending on how the insurer prices risk and the benefits the policy offers. It’s important to compare at least three quotes from different carriers to ensure you’re getting the best price for the coverage you need.

Selected Coverage

The cost of long-term care insurance will also depend on the policy’s term length, the amount of coverage you select, and whether or not you purchase additional coverage through a policy rider such as inflation protection.

Other Factors

Except for hybrid plans, premiums aren’t guaranteed to stay the same throughout the life of a long-term care insurance policy.

In the past, claims for older-issue long-term care policies were higher than insurers had projected, which threatened their solvency. That led insurers to reprice policies and increase premiums.

However, the Center for Insurance Policy and Research at the NAIC concludes that LTCI insurers now have enough experience to more accurately price long-term care policies, making rate increases far less likely in the future.

The Pros & Cons of Long-Term Care Insurance

Long-term care insurance can be an excellent tool for protecting your assets and setting you up to live as independently as possible after retirement. Nevertheless, no insurance product is without its drawbacks.

Pros

Tailored Benefits

You can adjust the coverage amount on your long-term care policy according to your individual needs. You can also choose the length of your benefit period (typically two to five years), your elimination period, and premium payments.

Benefits Are Tax-Free

The benefits you receive when your long-term care insurance kicks in could be tax-free, and the premiums may be tax-deductible.

Your Family Can Manage Your Care Rather Than Provide It

Purchasing insurance can provide your loved ones some much-needed peace of mind in the event you require care in your later years. It will help relieve your family of the psychological and financial stress of caring for a sick relative.

Hybrid Options

A hybrid long-term care plan combines your life insurance (or a qualifying annuity) and your long-term care insurance as a rider under one convenient policy. That can also relieve concerns about paying for coverage you may never use.

Cons

You May Not Need It

Although the chances of not needing some type of long-term care are low, if you purchase long-term care insurance, you may end up paying for a policy you’ll never use. (However, that could happen with any type of insurance.)

You May Run Out of Coverage

Long-term care insurance covers you for a set number of years, typically between two to five, according to Debra C. Newman, founder of Newman Long-Term Care. Unlimited long-term care benefits are not frequently available.

In most cases, there is a defined lifetime maximum benefit amount. Typically, you accumulate up to a certain amount of money following a “pool of benefits” approach or, conversely, you choose the number of years you’d like your long-term costs to be covered.

People generally choose three, four, or five-year benefits, a length that equals or exceeds the average time people need long-term care. However, there is the risk of requiring care for a longer-than-average period, and so of outliving the length of your policy.

FAQs About Long-Term Care Insurance

When should I buy long-term care insurance?

Although people put off purchasing a long-term care insurance policy because of the cost of its premiums, long-term care insurance specialist Carol Burk suggests looking into the coverage when you’re in your early fifties.

For couples looking for coverage, the sweet spot is around 55 years old. Beginning to shop at this time increases the odds of buying before your health declines and your premiums rise. The younger and healthier you are, the more likely you are to get the lowest rates.

Is long-term care insurance worth it?

Many people put off thinking about the prospect of needing care later in life or who will provide it, but the likelihood of needing care is high. Research shows that 70% of people aged 65 and older will need some form of long-term care, with women needing 1.5 more years of care than men.

According to financial expert Greg Klingler, “Purchasing insurance is about managing your risk. If you ask someone who has been confined to a long-term care facility if it is worth it, the answer will be a resounding yes. But if you ask someone who never had the need, the answer will be no.”

Also, if you have sufficient resources, you may want to forego long-term care insurance and instead rely on tapping those assets if you indeed require such care later in your life.

Does health or disability insurance cover long-term care?

According to LongTermCare.gov, there’s a common misconception that medical insurance will cover most of the costs of long-term care. Most private health insurers and health maintenance organizations (HMOs) exclusively cover skilled, short-term, medically required care. Many private health insurers do not cover custodial care.

Disability income insurance, on the other hand, is designed to replace your income in the event an illness or injury renders you unable to work, not to cover long-term-care expenses. In the event your disability also requires long-term care services, the cost of care may add up.

What can disqualify you from long-term care insurance?

Insurance companies price risk differently, which means some may be more lenient than others when it comes to certain risk factors. In general, long-term care insurers will pay special attention to your medical history and any family history of debilitating illness.

Being in poor health or needing help with daily living activities could make it harder to get approved for coverage or to qualify for lower premiums.

How do long-term care insurance state partnership plans work?

Many states have partnerships with long-term care insurance companies that incentivize people to purchase long-term care. Participating insurance companies agree to specific provisions in their partnership policies that financially protect policyholders who exhaust their benefits and want to request Medicaid.

Before Medicaid starts paying benefits, it will require you to exhaust most of your assets — the specific amount varies by state. Partnership programs protect your assets up to the equivalent of your long-term care policy’s total benefit amount.

For example, if your state requires you to spend your assets down to $1,500 and you have a long-term care insurance benefit that is partnership-approved for $500,000, you would be able to maintain up to $501,500 in assets and still qualify for Medicaid.

Long-Term Care Glossary
Activities of Daily Living (ADLs) These include self-care tasks such as dressing, feeding oneself, toilet hygiene, continence, transferring, and personal hygiene or grooming.
Benefit Period The amount of time your insurance will cover your long-term care expenses.
Benefit Triggers Long-term care insurance benefits are triggered into effect when the insured requires assistance with two or more of the ADLs or has a cognitive impairment.
Caregiver Any person that provides in-home care to the elderly or disabled.
Chronic Illness A long-lasting illness or condition that is typically incurable but can be managed with health and living assistance services. Those chronically ill have a physical or cognitive impairment and can’t perform at least two ADLs.
Cognitive Impairment A decline in mental function grave enough to handicap one from performing activities of daily living. For example, Alzheimer’s or Parkinson’s disease.
Community-Based Services These provide health services (skilled nursing care, therapies, case management, hospice care) to meet medical needs and human services (senior centers, adult daycares, home-delivered meal programs, personal care assistance) to support one in daily living.
Custodial Care Non-skilled care, also known as personal care, is used to assist with activities of daily living.
Elimination Period Also known as the deductible period, it’s the time between the start of your claim and the moment you start receiving benefits.
Skilled Care Services provided by a licensed professional such as a registered nurse, physical therapist, or doctor.

Methodology

To make our selection for the best long-term care insurance companies of 2021, we considered the customer-satisfaction ratings from J.D. Power’s 2020 Individual Life Insurance Study scores. We also looked into financial strength as demonstrated by A.M. Best’s ratings of that attribute, along with the number of complaints filed against each company with the National Association of Insurance Commissioners (NAIC).

The Best Long-Term Care Insurance Companies of 2020