Long Term Care Insurance Premiums Rising: What to Know Before Buying

Long term care insurance is coverage designed to pay for nursing homes, assisted living or in home aides once someone can no longer handle daily activities on their own. Medicare barely touches these costs, and premiums have jumped roughly 40% since 2020, making the timing of a purchase almost as important as the decision itself.

At a Glance

• About 70% of people turning 65 today will need some form of long term care, per the U.S. Department of Health and Human Services.
• A semiprivate nursing home room now averages about $115,000 a year, according to a recent CareScout Cost of Care Survey.
• Only 3% of U.S. adults, and 15% of those 65 and older, currently carry long term care insurance.
• Premium quotes for identical coverage varied by more than $5,000 a year among top insurers in 2025.
• Waiting until your mid 60s or later roughly doubles the premium compared with buying in your 50s.

Why So Few People Are Covered for a Risk They Fear Most

Surveys now show that needing long term care has overtaken outliving savings and worries about Social Security cuts as the top retirement fear among Americans. Yet fewer than a third of people without a financial advisor have made any plan for it, according to a Northwestern Mutual survey. The mismatch between fear and preparation is stark: most people know the risk exists but haven't priced it, let alone insured against it.

The math explains some of the hesitation. CareScout's latest figures put a private nursing home room at about $130,000 a year and assisted living at $74,000. In home care isn't cheap either. Families paid a median of $34 an hour last year, ranging from $25 in Mississippi to $44 in South Dakota, which adds up to roughly $78,000 annually at a standard 44 hour week.

What a Policy Actually Pays For

Long term care insurance typically covers nursing home stays, assisted living facilities and aides who come to your home. It does not replace Medicare or serve as a substitute for medical insurance; it's meant to cover the custodial and daily living support that Medicare generally excludes. Benefit amounts, growth rates and elimination periods vary by policy, which is part of why shopping around matters so much.

Quick Facts

• A healthy 55 year old woman today pays about $3,750 for a $165,000 benefit pool with 3% annual growth, up from $2,675 in 2020.
• The same woman waiting until 65 pays about $5,290.
• A 55 year old man pays roughly $2,200; at 65, about $3,280.
• Insurers decline nearly half of applicants over age 70.
• Premiums roughly double between ages 65 and 75.

Timing the Purchase Without Overpaying

David Tenerelli, a certified financial planner at Values Added Financial, says your 50s are generally the sweet spot for requesting quotes, since chronic health issues are less likely to trigger a denial than they would be a decade later.