Selecting a long-term care insurance (LTCI) policy is an important step toward protecting your future as well as your family’s peace of mind. But not all policies are the same. To find the best fit for your needs, you’ll want to understand the key elements that shape how a policy works and what kind of care it covers. Here are the most important things to keep in mind:

1. The Type of Policy You Want

There are two main types of long-term care insurance: traditional and hybrid (also called asset-based).

Traditional LTCI is a standalone insurance policy designed to cover future long-term care expenses. It typically offers the most flexibility and lower initial premiums. However, if you never end up needing care, there may be no return on the premiums you paid.

Hybrid LTCI combines long-term care coverage with a life insurance policy or annuity. These options often require a larger upfront investment but come with the added benefit of a death benefit or cash value. If you don’t use the long-term care coverage, your investment still returns value to you or your beneficiaries.

Choosing between the two depends on your personal financial situation, your goals, and whether you want the assurance of guaranteed benefits.

2. How Much Coverage You Need

The cost of long-term care varies widely depending on where you live and the type of care you receive. Your LTCI policy will determine:

• How much it pays each day or month for care (the daily or monthly benefit)
• How long those benefits will last (such as 2 years, 5 years, or even for life)
• Where that care can be provided (at home, in an assisted living facility, or in a nursing home)

As you consider coverage, ask yourself:

• Do you want your policy to cover the full cost of care or just supplement your savings?
• Are you hoping to receive care at home for as long as possible?
• Would you feel more secure with a longer benefit period?

There’s no one “right” answer—just the answer that fits your life and your priorities.

3. When Benefits Begin

Most policies include an elimination period, which is like a waiting period before your benefits start. During this time, which is usually 30, 60, or 90 days, you’re responsible for covering care costs out of pocket.

While a longer elimination period can reduce your premium, it also means paying more on your own when care begins. If you want your policy to begin paying out sooner, you may want to choose a shorter elimination period.

4. Whether the Policy Keeps Up with Inflation

One of the biggest threats to long-term care planning is inflation. What seems like enough coverage today might fall short 15 or 20 years from now. That’s where inflation protection comes in.

This policy feature increases your benefit amount over time to help keep pace with the rising cost of care. It’s especially important if you’re purchasing a policy in your 40s, 50s, or early 60s and don’t expect to use it for many years.

5. Your Age and Health at the Time of Purchase

Long-term care insurance is medically underwritten, which means your age and health can affect both your eligibility and your premium. Generally, the younger and healthier you are when you apply, the better your options and the more affordable your policy may be.

Planning ahead can help you avoid limited options later on, when coverage may be harder to qualify for or more expensive.

Need help deciding on the right LTCI policy for you?

Our team partners with experienced LTC Advocates who specialize in helping people like you understand their LTCI options and make confident decisions. Your consultation is completely free and comes with no pressure to buy.

Schedule a consultation today and take the first step toward protecting your future.