- Introduction
- How traditional and hybrid long-term care insurance compare
- What traditional coverage includes
- How much traditional policies cost by age
- What to know before buying a traditional policy
- What hybrid coverage includes
- How much hybrid policies cost by age
- What to know before buying a hybrid policy
- The bottom line
- References
Long-term care insurance costs, from traditional to hybrid policies
- Introduction
- How traditional and hybrid long-term care insurance compare
- What traditional coverage includes
- How much traditional policies cost by age
- What to know before buying a traditional policy
- What hybrid coverage includes
- How much hybrid policies cost by age
- What to know before buying a hybrid policy
- The bottom line
- References
If you’re thinking about who will care for you later in life or how to support an aging parent or relative, long-term care insurance is one way to plan. Sometimes called elder-care insurance, these policies cover expenses that Medicare doesn’t, such as assisted living, nursing home care, and in-home assistance with daily activities such as bathing, dressing, and eating.
But these policies aren’t cheap—premiums typically cost thousands of dollars annually. And like other types of insurance, traditional long-term care policies operate on a use-it-or-lose-it model, which is why hybrid policies have emerged. They combine long-term care coverage with a life insurance benefit that goes to your heirs if you don’t use the care.
Key Points
- Medicare doesn’t cover the cost of long-term care if you need help with daily activities such as dressing, bathing, or eating.
- Traditional long-term care insurance policies may cost less over time but don’t provide a payout if you don’t use the benefits.
- Hybrid insurance policies are often more costly and may have benefit limits, but they include a life insurance payout for heirs if the coverage isn’t fully used.
Understanding the costs and what they cover—and don’t—can help you decide whether these policies are right for you.
How traditional and hybrid long-term care insurance compare
Traditional and hybrid elder-care insurance policies share some similarities. A policy’s cost depends on factors such as your age at the time of purchase, the maximum daily benefit, the number of years coverage lasts, and any optional features, such as an inflation rider.
Just what is “elder care”?
Elder care encompasses a broad range of services designed to help older adults with daily living, medical needs, and housing. It can include in-home caregiving, assisted living, nursing home care, and hospice. Although Medicare and Medicaid cover some services, others must be paid for out of pocket or through long-term care insurance.
Although elder-care insurance is sometimes used colloquially, long-term care insurance is the industry standard name for policies that help pay for these services.
Most modern policies are comprehensive, allowing benefits to be used for nursing home care, assisted living facilities, home health care, adult daycare services, and hospice care.
Whether traditional or hybrid, most of these policies have a waiting period, also called an elimination period, before benefits kick in. The waiting period is the gap between when care starts and when the policy starts paying for it. Policyholders choose the length of this period when purchasing a policy.
For example, if a policy has a 90-day waiting period and you move into an assisted-living facility today, you would be responsible for the full cost of care for the first 90 days before insurance starts paying.
Some long-term care insurance policies are tax qualified, meaning premiums may be deductible as a medical expense and benefits are generally tax free if they meet Internal Revenue Service (IRS) guidelines. Eligibility varies by state; check with your state insurance department to confirm whether the policy you’re considering qualifies.
Long-term care insurance isn’t right for everyone. The premiums are hefty, and if you already have difficulty paying for basics—such as utilities, food, or medicine—programs provided by Medicaid and Social Security may be better options.
But if you have significant assets you’d rather not use to pay for long-term care and can afford the premiums, a long-term care insurance policy may be the right choice.
What traditional coverage includes
Traditional long-term care insurance operates like other types of insurance: Policyholders pay regular premiums, and the policy helps cover costs when care is needed but isn’t paid for by another source—in this case, Medicare.
Coverage typically includes services such as nursing home care, assisted living, in-home care, and adult daycare. Policies vary in what they cover, how long benefits last, and whether additional features (like inflation protection) are included.
How much traditional policies cost by age
Traditional long-term care insurance policy premiums range widely and depend on what state you live in and your health (for starters). Women typically pay higher premiums than men because they tend to live longer and use these services more frequently, although couples can get discounts.
| Age | Annual premium for single males | Annual premium for single females | Combined annual premium for couples (male/female) |
|---|---|---|---|
| Note: The initial policy benefit equals $165,000. The cheapest premium has no inflation rider, while the most expensive includes an inflation rider that grows benefits 5% annually. Source: American Association for Long-Term Care Insurance, 2025, www.aaltci.org. | |||
| 55 | $950 to $3,710 | $1,500 to $6,400 | $2,080 to $8,575 (both age 55) |
| 60 | $1,200 to $3,800 | $1,900 to $6,700 | $2,700 to $8,700 (both age 60) |
| 65 | $1,750 to $4,255 | $2,700 to $7,225 | $3,750 to $9,675 (both age 65 |
What to know before buying a traditional policy
Traditional policies require medical underwriting, a process where the insurer reviews your health history and may request a medical exam to assess your risk of needing long-term care. Having a preexisting condition doesn’t automatically disqualify you, but some policies may delay coverage related to the health issue during an initial waiting period.
Traditional long-term care policies typically build no cash value, unlike whole life insurance, which accumulates value over time. And like other forms of insurance, traditional policies are use it or lose it: If you never need long-term care, you receive no benefit.
Premiums can increase over time. If you can no longer afford the premiums, you risk losing the money you’ve already paid in, although some insurers may allow the return of some of your money. Premiums may rise for several reasons, including climbing health care costs and changes to the insurer’s pricing structure.
What hybrid coverage includes
Hybrid long-term care insurance was created for consumers who want coverage but worry about paying for a policy they may never use. These policies combine long-term care insurance with life insurance or an annuity.
If the policyholder doesn’t use the benefits, or uses only part of them, their heirs receive a death benefit. But that flexibility comes at a price—premiums for hybrid policies are more expensive than those for traditional policies.
As you use the hybrid policy to cover care costs, the available death benefit usually decreases—often dollar for dollar—although it can vary by policy.
How much hybrid policies cost by age
Comparing the cost of hybrid policies to traditional ones is difficult because prices vary widely based on the features offered and the insurance company selling them. Still, some factors consistently affect pricing, such as your state of residence and your health.
| Policy type and inflation growth | Traditional policy: Annual premium (and coverage details) | Hybrid policy: Annual premium (and coverage details) | Hybrid policy: Lump sum premium (and coverage details) |
|---|---|---|---|
| Note: Hybrid policy costs reflect averages for single adults age 55 and are based on pricing from two companies. Death benefits shown reflect the maximum available if no long-term care benefits are used and are typically reduced as long-term care benefits are paid. Source: American Association for Long-Term Care Insurance, 2025, www.aaltci.org. | |||
| Single male, age 55, no inflation growth policy | $900 (includes $165,000 in long-term care benefits, no death benefit) | $3,540 (includes $180,000 in long-term care benefits or $120,000 death benefit) | $52,753 (includes $180,000 in long-term care benefits or $120,000 death benefit) |
| Single female, age 55, no inflation growth policy | $1,500 (includes $165,000 in long-term care benefits, no death benefit) | $3,265 (includes $180,000 in long-term care benefits or $120,000 death benefit) | $54,022 (includes $180,000 in long-term care benefits or $120,000 death benefit) |
| Single male, age 55, 3% annual inflation growth policy | $2,100 (includes $464,300 in long-term care benefits at age 90, no death benefit) | $5,025 (includes $521,850 in long-term care benefits at age 90 or $181,000 death benefit that grows over time) | $71,700 (includes $521,850 in long-term care benefits at age 90 or $120,000 death benefit) |
| Single female, age 55, 3% annual inflation growth policy | $3,600 (includes $464,300 in long-term care benefits at age 90, no death benefit) | $5,975 (includes $521,850 in long-term care benefits at age 90 or $215,000 death benefit that grows over time) | $76,740 (includes $521,850 in long-term care benefits at age 90 or $120,000 death benefit) |
What to know before buying a hybrid policy
The application process for hybrid policies is similar to traditional long-term care insurance. A medical exam may not be required, but you may have to answer health questions and provide medical records. Preexisting conditions may not be covered or could result in higher costs.
Many hybrid plans can be purchased with a lump sum or through installments over a set period, which helps limit future premium increases. Unlike traditional policies, hybrid plans build cash value over time. How much depends on the policy, but the growth is modest—typically 1% to 3% yearly.
Alternatives to long-term care insurance
Long-term care insurance isn’t the only way to prepare for future care costs. Some other strategies include:
- Health savings accounts (HSAs). If you have an HSA (which requires a high-deductible health plan), it can be a tax-free way to save for future long-term care costs. The funds are yours to use in retirement for qualified long-term care expenses, even if you stopped adding to the account years earlier.
- Annuities with long-term care riders. Some annuities offer optional features that provide extra funds if you need long-term care.
- Personal savings. Setting money aside specifically for care costs can give you flexibility, although it requires disciplined saving and may not be enough if your care needs end up being extensive.
- Home equity. Selling your home, refinancing it, or getting a reverse mortgage can help cover care costs, but variables such as market conditions and fees can reduce the amount you receive.
These options aren’t for everyone, but they may help cover costs if long-term care insurance isn’t the right fit for you.
Whether a hybrid policy is worth the costs depends on your estate planning priorities. If you’re looking for long-term care coverage with the added benefit of leaving money to your heirs, a hybrid policy might make sense.
The bottom line
For some, long-term care insurance is about peace of mind—knowing they’ll have help when they need it. Others see it as a way to protect their savings from long-term care costs and avoid having to rely on Medicaid, which covers long-term care only after most personal assets have been depleted.
When shopping for a policy, consider working with a financial planner or insurance agent to explore your options. Compare quotes from multiple insurers and review each company’s financial strength and ratings. Your state’s insurance department can provide a list of approved insurers and information on partnership programs, which link private long-term care policies with Medicaid. Some employers also offer long-term care insurance, often at discounted group rates.
References
- Where to Look for Long-term Care Insurance | acl.gov
- [PDF] A Shopper’s Guide to Long-Term Care Insurance | naic.org