Long-Term Care Insurance Premium Tool

Long-term care is retirement's unpriced risk: ~70% of people over 65 will need some care, 20% will need it for 5+ years, and neither Medicare (skilled/short-term only) nor health insurance pays for the years of help-with-daily-living that assisted living and nursing homes sell at $70,000–130,000 a year. This tool projects the bill to your likely claim decade, prices the three honest strategies — traditional insurance, hybrid policies, self-insurance — and shows why the decision has a deadline: premiums climb ~8%/yr with purchase age, and health underwriting slams the door on 15–30% of applicants past 60.

The Cost You're Planning For

Care inflation has outrun CPI for decades (labor-intensive services do). A 3-year assisted-living episode beginning at 85 is a $600k–700k event in tomorrow's dollars — the number that reframes the premium conversation.

The Three Strategies, Without the Sales Pitch

• Traditional LTC insurance: the most benefit per premium dollar — but premiums are not guaranteed: the industry's early mispricing produced 50–100% hikes on old blocks, and while post-2010 policies are priced more realistically, the risk is structural. Buy the inflation rider (3% compound) or the benefit pool is a fossil by claim time. Sweet spot: buy at 55–65.
• Hybrid life/LTC: now ~85% of new sales — a life policy whose death benefit converts to LTC dollars. Premiums are guaranteed, unused coverage pays heirs, and underwriting is gentler; the cost is leverage (~$1.50–2.50 of LTC per premium dollar vs traditional's $4–6). It's insurance for people who hate insurance-company surprises, funded ideally by repositioning idle cash or an old annuity (1035 exchange, tax-free).
• Self-insurance: credible above ~$2M of retirement assets — the calculator's invest-the-premium line shows your version. The honest requirements: actually earmark the money, accept that a long dementia claim is the tail that breaks it, and remember home equity (via sale or a reverse mortgage) is the traditional backstop.

The Fine Print That Decides Claims

• Benefit triggers: needing help with 2 of 6 activities of daily living, or cognitive impairment — standard since HIPAA, and the dementia coverage is why the product exists.
• Elimination period: the 90-day self-funded deductible on most policies — hold that cash.
• Premiums are tax-deductible within age-based caps (~$1,800 at 55, ~$6,000 at 71+) as medical expenses, and payable from HSAs — the HSA is the designed funding vehicle.
• Medicaid is the default plan for the unprepared: it pays for care after assets are spent down to poverty levels, in facilities of its choosing. Partnership-qualified LTC policies protect assets dollar-for-benefit-dollar from that spend-down — an underused state program worth asking about.

How to Use the Tool

1. Set your age, the care level to plan for, years of coverage, pricing sex, and inflation.
2. Read the projected bill, the premium estimate, and — the honest comparison — what self-investing that premium builds by 85.
3. If insurance wins your math: quote traditional AND hybrid through an LTC-specialist broker while your health still passes underwriting. The deadline is biological, not financial.

Frequently Asked Questions

Doesn't Medicare cover nursing homes?

Only up to 100 days of SKILLED care after a hospital stay — rehabilitation, not living assistance. The multi-year custodial care that constitutes most LTC is explicitly excluded. This misunderstanding is the foundation of America's care-funding crisis.

What age should I buy?

The consensus window is 55–65: late enough that premiums-paid-years are limited, early enough that health passes underwriting and rates are sane. Each year of waiting costs ~8% in premium and a real chance of becoming uninsurable.

Will my premiums go up after I buy?

Traditional policies: possibly — increases require regulator approval and apply to whole classes, but the history is sobering. Hybrids: no, guaranteed. That single difference explains the market's migration to hybrids despite their weaker leverage.

What happens if I never need care?

Traditional: premiums are gone (like your homeowners insurance — the fire didn't happen). Hybrid: heirs receive the death benefit. Self-insure: the earmarked fund is your estate's. This 'use it or lose it' asymmetry is emotional, not financial — but it sells hybrids.

How do couples' policies work?

Shared-care riders pool two benefit periods (3+3 becomes a joint 6) at a discount — statistically smart since couples' claims rarely overlap fully. Women pay ~40% more solo (longer claims); couple pricing softens it.

What is Medicaid spend-down, really?

Qualifying requires exhausting countable assets (~$2,000 individual, with spousal protections), a 5-year lookback on gifts, and estate recovery after death. It's a real safety net with real costs: facility choice, home-care limits, and your legacy. Partnership policies exist precisely to buy asset protection from it.

Is my information private?

Yes — every figure computes locally in your browser.

Run the three-strategy math once at 55 and once at 60 — the numbers, not the brochures, will tell you whether you're an insurer, a hybrid buyer, or a disciplined self-funder. The only losing strategy is the default one: deciding at 75, in a hospital discharge office.