Long-Term Care Insurance

Buying Long-Term-Care Coverage for a Parent

It's a smart move. But do it while your parents are still relatively healthy.

My father is 68, relatively healthy and living alone. He has very little savings and works full-time. He can't afford to buy long-term-care insurance. If something happens to him, it's likely that my family and I will have to help pay for his care. Should I buy long-term-care insurance for him?

Buying the insurance is a smart move: The average cost of a private room in a nursing home tops $90,000 a year, and care in your home can be even more — making it highly unlikely your father could handle the expenses on his own. If he has very little income or savings (see Medicaid.gov for details), he may qualify for Medicaid, but his care options would be limited. Most states cover custodial care (the care needed by Alzheimer's patients and others with long-term-care needs) only in certain Medicaid-eligible nursing homes, although a few have special programs that cover care at home. For more information about Medicaid coverage for custodial care, see Does Insurance Cover Alzheimer's Care?

Long-term-care insurance can help pay for many more care options than Medicaid, including care at home, in an assisted-living facility or in a wider variety of nursing homes. You can cover your father's premiums, but he'll need to sign the application and health care releases himself. The cost will depend on your dad's health and the terms of the policy. A Genworth policy for a relatively healthy 68-year-old man, including a $3,500 monthly benefit, a three-year benefit period, 3% compound inflation protection and a 90-day waiting period, would cost about $3,200 per year, says Mike Ashley, of Senior Benefits Consultants in Prairie Village, Kan. A policy with the same terms that pays $4,000 a month runs about $3,700 a year.

If you are interested in getting long-term-care coverage for your father, don't wait too long. Long-term care insurers are making it more difficult to qualify for coverage, and Ashley says that most people who are interested in buying a policy for their parents wait until their health is too bad to qualify for coverage.

For more information about long-term care insurance, see Navigate a Course for Long-Term Care and A New Strategy for Paying for Long-Term Care and our Long-Term Care Special Report. For information about coverage options from families who are helping relatives with their long-term care needs, see Planning for Alzheimer's and Alzheimer's: Get Your Finances in Order.

Most Popular

The Inflation Reduction Act and Taxes: What You Should Know
Tax Breaks

The Inflation Reduction Act and Taxes: What You Should Know

The U.S. Senate has passed the Inflation Reduction Act of 2022—a climate, energy, healthcare, and tax bill that would increase IRS funding, and change…
August 8, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
‘I Can’t Retire – I Need Health Insurance’
health insurance

‘I Can’t Retire – I Need Health Insurance’

Health insurance is seen as a huge hurdle for early retirees, but the answer to finding affordable coverage could be simpler than you think.
August 7, 2022

Recommended

Four Options When – Not If – Your LTC Premiums Go Up
long term care insurance

Four Options When – Not If – Your LTC Premiums Go Up

If you’re dreading getting a letter in the mail about your long-term care insurance premiums rising, you’re in good company. And you have some decisio…
August 4, 2022
Tax Changes and Key Amounts for the 2022 Tax Year
tax law

Tax Changes and Key Amounts for the 2022 Tax Year

Americans are facing a long list of tax changes for the 2022 tax year. Smart taxpayers will start planning for them now.
July 19, 2022
Long-Term Care: Other Coverage You May Want to Consider
Long-Term Care Insurance

Long-Term Care: Other Coverage You May Want to Consider

A third of applicants are rejected from buying long-term care insurance. Here are some smart alternatives.
June 7, 2022
Long-Term Care Insurance Premiums Rising, Benefits Shrinking
Long-Term Care Insurance

Long-Term Care Insurance Premiums Rising, Benefits Shrinking

There's a 70% chance you'll need some type of long-term care. Getting the right insurance is more complex these days. Here's some guidance.
June 2, 2022