Several factors affect the cost of long-term care insurance, including:

• Type of services covered (care at home or in a facility)
• Amount of daily, weekly, or monthly benefit
• Length of waiting period for benefits to begin (also known as the elimination period)
• Duration of coverage

Other factors may affect the price of a policy, such as whether it has inflation protection or a nonforfeiture clause, which provides some level of benefits for a period of time if you cancel your policy.

The age you purchase a policy also affects its cost: the younger you are, the lower the cost. A 40-year old pays far less than what a 60-year old pays for long-term care insurance: $950 vs. $2045 in premiums annually. Once a policy is purchased, premiums cannot be increased because of age. Premiums can only be raised if the increase applies to a whole group of insureds.

In general, the cost of premiums is less than the cost of long-term care services. A 45-year old woman today could pay about $1140 a year for a long-term care policy. By age 85, if she enters a nursing home, she will have paid about $44,000 in premiums--far less than the nearly $220,000 that a one-year stay in a nursing home will likely cost in 40 years.