What is the best long term care insurance plan for my needs?

Short answer: It depends.

Long answer:  It depends on what you are most concerned about and how much you want to spend.  Are you trying to protect a portion of your assets to gain peace of mind?  Are you concerned about outliving your retirement savings?  Does the rising healthcare cost in retirement seem like a threat?  Does your family have a history of Alzheimer’s and/or dementia?

There are three critical components you need to consider when it comes to a plan design.

1)    How much – amount policy will pay out
Our research shows 42% of people apply for a daily benefit amount of about $130- $1601

This means that when your plan kicks in, you will be reimbursed $130-$160 each day to help pay for care, depending on what you decide to purchase.*

Your policy will grow with the cost of care depending on inflation protection purchased.

  • Guaranteed Purchase Option (GPO) or Future Purchase Option (FPO) – you will be offered the option to add additional benefits every 3-5 years
  • Simple – your benefit amount will increase each year by a set dollar amount
  • Compound – the benefit amount will increase on a  compounding basis each year


3% compound is a popular selection and tends to be the most affordable in the long run.

2)    How soon – when benefit payments begin

Our research shows 96% of policies have a 90 day waiting period – also known as ‘elimination period’1

There are two types of elimination periods to consider:

  • Calendar Day – waiting period begins the first day of certified (approved by your doctor) need for assistance with activities of daily living (ADL) or due to Cognitive Impairment
  • Service Day – each day of care received by a licensed provider  satisfies a day of the waiting period

Calendar Day elimination is the recommended choice for most plans if available.

3)    How long – how long are benefits paid

Our research shows 58% of policies have a benefit length of 3 years1

If there is a history of illness in your family or a desire for a more comprehensive coverage, consider a longer benefit duration.

As always, it is best to speak to a specialist.  Our team of specialists are some of the best in the country and have helped thousands of people with their long term care planning.

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.

This article assumes you qualify for long term care insurance.  See our blog post Long Term Care Insurance Underwriting and Long Term Care Insurance with a Pre-Existing Medical Condition  to get a better idea if you do.

1 LTC Consumer 2014 Buying Trends

*Payout methods vary; they could be cash based, reimbursement, indemnity, or whatever else your plan has outlined.