Long-Term Care Insurance: What It Covers and How to Plan Ahead

When you think about aging, you probably imagine retirement, travel, or time with family—not needing help to bathe, dress, or eat. But long-term care insurance, a type of policy that pays for help with daily activities when you can't do them yourself. Also known as extended care insurance, it’s not health insurance, and it doesn’t cover hospital stays or doctor visits. It’s for the slow, steady decline that comes with aging, dementia, or chronic illness. Most people assume Medicare will cover this, but it doesn’t. Medicare only pays for short-term rehab after a hospital stay. After 20 days, you’re on your own. That’s where long-term care insurance steps in.

Without it, the costs add up fast. A private room in a nursing home can run over $100,000 a year. In-home care from a home health aide? That’s $50 to $70 an hour. And if you need help seven days a week, you’re looking at $150,000 or more annually. Medicaid, a government program that pays for long-term care for people with very low income and assets. Also known as medical assistance, it’s often the last resort—because you have to spend down nearly everything you own to qualify. That’s why people buy long-term care insurance while they’re still healthy. It’s not about being sick now—it’s about protecting your savings for later.

What does it actually pay for? The best policies cover care in nursing homes, assisted living facilities, adult day care, and even your own home. Some even include memory care for Alzheimer’s or dementia. Policies vary by daily benefit amount, length of coverage (like 2, 3, or 5 years), and waiting periods before payments start. Most people choose a 90-day waiting period—it’s a balance between cost and protection. You can also add inflation protection so your benefits keep up with rising prices.

It’s not cheap, but it’s cheaper than paying out of pocket. Premiums depend on your age when you buy, your health, and how much coverage you pick. Buying in your 50s or early 60s is smart—you’re healthier, premiums are lower, and you’re less likely to be denied. People who wait until they’re 70 or older often face high rates or get turned down entirely.

You don’t need to buy a perfect policy. You just need one that fits your budget and covers the basics. Some people pair it with hybrid life insurance policies that include long-term care benefits. Others use savings or family support. But if you have assets you want to protect—your home, your retirement accounts, your legacy—then long-term care insurance isn’t optional. It’s planning.

Below, you’ll find real advice on how to compare policies, what to ask your agent, how to avoid common traps, and how to use this coverage wisely. These aren’t theoretical guides—they’re from people who’ve been there, figured it out, and shared what actually works.