This blog post is designed to provide general information on the subjects covered. It is not, however, intended to provide specific estate planning, insurance, tax or legal advice. Please note that LTC Consumer and its representatives do not give financial planning, tax or legal advice. You are encouraged to consult with your tax advisor or attorney concerning your own situation.

What is the average cost of long term care insurance?

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Many people want to know what the average cost is for long term care insurance?  It is a fair question, as outside of there isn’t much consumer friendly resources for someone to get educated without having to talk with a sales agent.

Averages can be very misleading.  For example, the average height of two men if one is 7 feet and another is 5 feet, is 6 feet tall.  But both are on the extremes.  So, what is the “average” cost for long term care insurance?  For a person in their 50s the cost averages between $100 and $180 per month.

What benefits does the average person buy:

  1. $4,500 per month of benefits.
    • Why?  70% of all claims today will start in the home.  The average cost of home care nationally is $4,500 per month.
  2. 3 year benefit period.
    • Why?  The latest claims study done earlier this year revealed the average claim for men is 2.4 years and the average claim for women is 3 years.
  3. 3% Compounding inflation
    • Why?  The average inflation rate over the past 10 years for home care has been 1.5% and for facilities has been 3%.

While this is the “average” policy it is not to say this is what is best for you.  For example, maybe you have some extra money or home equity available should you need care so you only need a 1-2 year benefit period.  Or you have a family history of Alzheimer’s’ and know that a claim can last much longer than 3 years, in which case you might want a longer, richer plan.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.

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