Nursing Home Insurance

(Finding the right coverage has never been easier.) Author Icon Written by Trusted Choice Author Icon
Written by Trusted Choice

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Paying for long term care without insurance

Preparing to live in a nursing home and planning to move a loved one to an assisted living facility are among some of the most stressful life events. The reality is that almost 1.5 million Americans live in nursing homes today and spend over $83,000 per year, on average, for a private room. 

But the good news is that quality nursing home insurance puts you in control of what's ahead instead of leaving you at the mercy of Medicare or Medicaid benefits. 

It also enables you to receive the care you need without having to deplete personal savings or your parents' savings. Additionally, it allows elderly family members to avoid handing off the financial burden of care to their children.

Click on this independent agent matching tool to find the best insurance solution in your area. Provide some detail about what you're looking for, and the tool will recommend the best agents for you. Any information you provide will be sent only to the agent you pick.

A Snapshot of Nursing Home Providers in US

  • Total nursing home beds: 1,813,665
  • Total nursing home facilities: 16,995
  • Total nursing home occupancy rate: 83%

What Is Nursing Home Insurance Coverage?

Nursing home facilities cost about $83,000 a year on average. That's over $227 a day. Although Medicare or Medicaid benefit plans may pay a portion of that, you'll still have to spend money out of your pocket for a large part of your nursing home expenses.

So what exactly is nursing home insurance coverage? In a nutshell, it is a type of healthcare coverage that covers nursing home, assisted living, skilled nursing, custodial care and in-home care for people who are 65 or older. 

There are also policies that will cover you under the age of 65. This includes the cost to live in the facility and the cost of the care you receive. A private room with skilled nursing care costs more than a semi-private room with just custodial care.

Normally, a private nursing home insurance policy, also known as a long-term care policy, pays $100 to $500 of your daily expenses. Of course, the amount depends on the type of nursing home coverage you carry. Coverage is guaranteed as long as you pay your premiums.

How Much Does Nursing Home Insurance Cost?

What is the cost of adequate nursing home insurance? Long-term nursing home insurance costs around $3,000 a year if you are 65 when you set it up, and the rates increase steadily as you age. 

It is significantly less expensive if you start the policy when you are younger. Here is a breakdown of how your premium costs may vary based on age and coverage limits.

  • Typical Benefits
    • 4-year benefit period: $219,000 for 4 years of care
    • $150 per day: $4,500 for monthly care
    • All types of care: Skilled nursing and custodial care
    • All methods of care: Nursing home, assisted living facilities, home health care
    • Elimination period: A zero day elimination period means the insurance company begins paying your expenses immediately.
  • Premium Costs
    • Age 40-49: $1,300
    • Age 50-54: $1,600
    • Age 55-59: $1,850
    • Age 60: $2,360
    • Age 61: $2,450
    • Age 62: $2,560
    • Age 63: $2,675
    • Age 64: $2,790

No matter what your age is now, getting started right away is the key to lowering nursing home insurance costs. Also, keep in mind that nursing home insurance coverage can vary widely based on your daily costs and your benefit period. 

In addition to the benefits listed above, you may also be interested in considering factors such as private or semi-private rooms, joint coverage with a spouse, location of care, and annual premiums.

Is Nursing Home Insurance Worth the Cost?

Most people find that the benefits of nursing home insurance plans far outweigh the costs. By the time you are 65 or older, there is a 68% chance you will need some type of long-term nursing home care. 

When you consider that you can pay $1,300 to $3,000 a year now, or $55,000 per year later, the cost of nursing home insurance may seem worth it. Even if you start at age 40, you only pay a total of $32,500 for an inflation-adjusted benefit of $750,000 by the time you are 65.

Also, time is of the essence. The American Association for Long-Term Care Insurance estimates that you have a 14% chance of being turned down for long-term care insurance in your 50s, and a 25% percent chance of being turned down in your 60s.

How to Decrease Your Nursing Home Insurance Costs

If you simply cannot afford an inflation-adjusted policy, you can still purchase less expensive coverage. It's much better to have some coverage than no coverage at all. Here are a few ways to reduce the cost of your premium if you think you can't afford nursing home care.

  • Buy early: Nursing home insurance rates will increase as you age.
  • Increase the elimination period: You choose to pay for the first part of the care yourself.
  • Choose the simple interest option: If you are 60 are older this option can decrease your premium and still keep your benefit on pace with inflation.
  • Pay annual premium: If you choose to pay annually, the premium will be slightly less expensive.
  • Purchase a joint policy: A policy that covers you and your spouse will typically offer discounted premium rates.

Get Nursing Home Insurance Quotes Now

Nursing home insurance policies are fairly complex. They take into account many different variables that are unique to each consumer. When you're considering this kind of coverage, there are a few steps you should take to make sure you're getting what you need:

  • Speak with your financial adviser. If you have a financial planner to guide you, make sure you mention that this is a coverage you're considering, whether this coverage is for you or for a loved one. These policies could be expensive, and building a budget to support your needs in the future is crucial.
  • Speak with an insurance agent. Selecting the best insurance option can be tricky, and you will probably need some guidance. There are online resources available, but when it comes time to get quotes and ask direct questions about coverage amounts, options, and types, it is most efficient to have someone to advise you.
  • Compare quotes before you buy. If possible, get several quotes from reputable insurance companies on similar coverage. Price should not be the only factor you consider, because different companies carry different coverage that may or may not meet your needs.

If you follow these steps, you'll have an easier time getting a full picture of your needs, the costs, and the options in the marketplace that can work for you. 

Use this independent agent matching system to find the best insurance plan in your area. Describe what you’re looking for, and the technology will recommend the best agents for your needs. Any information you provide will be sent only to the agents you pick.

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