When to Buy Long-Term Care Insurance: A Decision Checklist

Quick summary

This checklist helps you decide when to buy long-term care insurance (LTCI). It covers timing by age and health, how to evaluate policy features, when hybrid products make sense, how to run a simple affordability test, and how LTCI fits with Medicare and Medicaid. Where helpful, I link to deeper guides on FinHelp to compare options and explain related rules.

(Authority: See IRS Publication 502 for tax treatment of qualified medical expenses and long-term care insurance premiums; Consumer Financial Protection Bureau and NAIC for consumer guidance.)

Why timing matters

Buying LTCI is a timing trade-off:

• Younger purchase = lower premiums and easier underwriting, but more years paying them.
• Older purchase = higher premiums, greater chance of health problems that cause denial or exclusions.

Most financial planners (and my clients) find the mid-50s to early-60s is the best balance for many people: premiums remain relatively affordable and underwriting still favors approval. That said, the right age for you depends on your health history, family longevity, assets you want to protect, and budget.

Decision checklist (step-by-step)

1. Estimate your long-term care risk and likely costs

• Ask: Do you have a family history of dementia or chronic illness? Do you expect to need help with daily living (bathing, dressing, feeding) in later life?
• Local cost check: Look up average assisted living and nursing home rates in your area. For example, many areas see nursing home care costing multiple thousands per month. Use this local estimate to set a target benefit.

1. Determine what you want to protect

• Do you want to preserve a primary residence for heirs, protect an IRA/401(k), or avoid becoming financially dependent on family? If yes, insurance may be more attractive.

1. Run a simple affordability test

• Calculate: annual premium × (expected years until need) + premium increases vs. assets you wish to protect. If the premium stream is a small share of your retirement income and you value asset protection, buy sooner.
• Check whether premiums are guaranteed or adjustable. Adjustable premiums may rise; factor that risk into your decision.

1. Check health and underwriting window

• If you already have chronic conditions or recent surgeries, you may be declined or pay surcharges. If you are healthy now and in your 50s–early 60s, underwriting odds are better.

1. Compare policy features, not just price

• Benefit amount (daily or monthly), benefit period (years or lifetime), elimination period (days before benefits start), inflation protection, nonforfeiture, shared/couple benefits, and reimbursement vs. indemnity. Inflation protection matters — without it, a $150 daily benefit won’t buy much in 20 years.

1. Consider hybrids and alternatives

• Hybrid policies (life insurance or annuity plus LTC benefit) solve the worry about wasted premiums if you die without needing care. See FinHelp’s coverage of Long-Term Care Hybrid Policies: Pros and Cons for details.
• Self-funding: Some people choose aggressive savings earmarked for care. Others use annuities or a catastrophic LTC policy that covers high-cost events rather than routine home help.

1. Run Medicaid planning only as a last resort

• Medicaid covers long-term care for low-income people who meet eligibility rules, but eligibility often requires spending down assets and observing lookback rules. Learn Medicaid details before making irreversible transfers — see FinHelp’s guide on Medicaid Lookback and Long-Term Care Planning Explained.

1. Re-assess periodically

• Revisit the decision when you hit milestones (age 50, retirement, major health changes). If you delay, re-evaluate underwriting risk and expected premium increases.

Policy features explained (what to prioritize)

• Elimination period: Like a deductible measured in days (commonly 30–90 days). Choose one you can self-fund for short-term needs.

• Benefit period: How long benefits will pay (e.g., 2 years, 5 years, or lifetime). Match this to family history and asset goals.

• Daily/monthly benefit: Pick a benefit that reasonably covers local home care or nursing home rates; consider inflation riders.

• Inflation protection: Essential for anyone under 75. Compound inflation riders are costlier but protect purchasing power.

• Nonforfeiture options: Return-of-premium or reduced-benefit options can protect the value of premiums if you cancel later.

• Shared/couple benefits: Useful for spouses who want coordination of benefits without two full policies.

• Indemnity vs reimbursement: Indemnity pays a set benefit regardless of actual costs; reimbursement pays only for documented costs. Indemnity is simpler but sometimes more expensive.

Underwriting and timing — real-world trade-offs

In my practice, I’ve seen two typical client paths:

• Clients who buy in their mid-50s: Lock in lower premiums and underwriting acceptance, choose compound inflation protection, and sleep better at night.
• Clients who wait until late 60s: Face higher premiums or limited options; some are denied because of new diagnoses (e.g., diabetes complications, cognitive decline).

If you have a specific health concern (upcoming surgery, early-stage disease), buy before it occurs if possible. Underwriting looks at recent medical records and sometimes functional status.

Costs and market trends to watch (through 2025)

• Premiums for traditional LTC policies rose sharply in the 2000s and 2010s; many insurers left the market and have since tightened product designs. Hybrid LTC solutions have grown as an alternative.
• Some older policies received rate increase requests; regulators and insurers still negotiate on rate approvals — check state insurance department updates and NAIC resources before buying.
• Tax rules: A portion of qualified LTC premiums can be included as medical expenses for itemized deductions (IRS Publication 502). For comprehensive, individualized tax advice, consult a CPA.

Authoritative sources: IRS Publication 502 (medical and dental expenses), Consumer Financial Protection Bureau (consumer guide to long-term care), and National Association of Insurance Commissioners (NAIC) consumer materials.

Common mistakes and how to avoid them

• Mistake: Assuming Medicare covers long-term custodial care. Reality: Medicare generally pays only for short-term skilled care after hospitalization, not ongoing custodial assistance. (See Medicare.gov.)

• Mistake: Buying the cheapest policy without checking inflation protection or benefit period. Cheap policies can be worthless in 10–15 years due to inflation.

• Mistake: Waiting until retirement without checking underwriting. Health changes can disqualify you.

• Mistake: Forgetting the elimination period. A 90-day elimination period means you must fund three months of care before benefits kick in.

When a hybrid or alternative makes sense

• You dislike the idea of ‘‘losing’’ premiums if you die without needing care. Hybrid policies return a death benefit or cash value, so they appeal to legacy-focused households.
• You want a single solution combining life insurance and LTC coverage — hybrids may have simpler underwriting and predictable costs.
• For more detail and a direct comparison, see FinHelp’s Long-Term Care Hybrid Policies: Pros and Cons and Evaluating Long-Term Care Funding Options: Insurance vs Self-Funding.

Useful internal links:

• When Long-Term Care Insurance Makes Sense for Your Family: https://finhelp.io/glossary/when-long-term-care-insurance-makes-sense-for-your-family/
• Long-Term Care Hybrid Policies: Pros and Cons: https://finhelp.io/glossary/long-term-care-hybrid-policies-pros-and-cons/
• Medicaid Lookback and Long-Term Care Planning Explained: https://finhelp.io/glossary/medicaid-lookback-and-long-term-care-planning-explained/

Short checklist to act now

• If you are healthy and age 50–65: get quotes, compare features, and lock in underwriting if premiums fit your budget.
• If you have early chronic conditions and still want coverage: ask about guaranteed-issue hybrids or limited-underwriting options.
• If you’re over 70 and uninsured: consider a hybrid or targeted catastrophic LTC policy rather than a full traditional policy.
• Always get multiple quotes, request sample policies, and read definitions for benefit triggers (ADLs vs. cognitive impairment).

FAQs

Q: What is the best age to buy LTCI?
A: Many people buy in their mid-50s to early-60s. The right age depends on health, budget, and whether you want to protect assets.

Q: Are LTCI premiums tax-deductible?
A: Qualified LTCI premiums may be treated as medical expenses for itemized deductions (see IRS Publication 502). There are age-based limits and rules; check with your tax advisor or IRS guidance.

Q: Does Medicare pay for long-term care?
A: Generally no. Medicare covers limited skilled services short term; Medicaid covers long-term care for those who meet financial and medical eligibility.

Final thoughts (professional perspective)

In my 15+ years advising households, the most common regret is waiting until a health change closes the underwriting window. Buying too young can feel like unnecessary spending, but the peace of mind and asset protection often justify a midlife purchase for those with moderate assets to protect.

Always: compare multiple insurers, read policy definitions carefully (especially benefit triggers and inflation protection), and consult a licensed financial planner or insurance broker familiar with long-term care in your state.

Professional disclaimer: This article is educational and does not constitute personalized financial, tax, or insurance advice. Consult a licensed insurance agent, financial planner, or tax professional for your specific situation.

Authoritative references

• IRS Publication 502 (Medical and Dental Expenses): https://www.irs.gov/publications/p502
• Consumer Financial Protection Bureau — Guide to long-term care: https://www.consumerfinance.gov
• National Association of Insurance Commissioners (NAIC): https://content.naic.org