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. 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.
Long-term care insurance provides a more cost-effective way to pay for long-term care services than relying on personal savings. To pay for the same amount of services covered by insurance costing $188 a month, a 60-year-old person would have to put aside $1,666 a month over 22 years.