Insurance

One of the most common questions we are asked is, “What’s the best age to buy Long Term Care Insurance (LTCI)?” This question comes up because many clients wonder if they are somehow too young or too old to obtain effective coverage. However, there is no universally accepted “best” age. And the best time to buy Long Term Care Insurance will often come down to the needs of the individual client.

But there are some general guidelines and common challenges to consider when thinking about what the best time to purchase LTCI looks like for you. The conventional wisdom is that younger is better. However, another approach embraces a more holistic perspective, considering the individual’s financial situation as well as his/her age. To take this holistic approach, it’s important to understand what drives long term care costs, why those costs are rising, and how you should approach protecting yourself from inflation.

Sometimes in life waiting makes sense. However, when it comes to preparing for retirement, planning and acting sooner is often better. Our philosophy is simple. Tackle Long Term Care Insurance as soon as you’re financially ready. We define “financially ready” as someone who can cover day to day expenses without stress, limited debt, and has a plan for their financial future. This is different from choosing the best age.

Why Long Term Care Costs are a Moving Target

To find the “best” time to purchase Long Term Care Insurance, it’s important to understand what drives the cost of care and why meeting these costs can be a challenge. As with other forms of healthcare, the cost of long term care can be significant. And while the majority of Americans will require long term care at some point in their lives, the degree and length of the care required can be impossible to predict. 

The Challenges of Inflation in Long Term Care

It’s not just the care needed that can be difficult to predict. The cost of that care is rising quickly and significantly. In many cases, the rising costs of long term care are far outpacing inflation. According to the Genworth Cost of Care Study, here’s how annual mean costs rose from 2004 to 2025:

  • A private room in a nursing home in 2004 was around $65,000. In 2025, those costs skyrocketed to over $129,575, almost doubling.
  • Assisted living facility cost in 2004 was just under $29,000. In 202, the cost was closer to $74,400, an increase of nearly 80%, more than doubling.
  • Home Care Home Health Aid in 2004 would cost around $42,000 annually. In 2020, that number had increased to just under $80,080, almost doubling.

This doesn’t take into account other long term care expenses that may pop up: new medications, extra medical procedures, and so on. It’s easy to see how these costs can stack up quickly and become a significant financial burden.

While the current level of inflation is uncommon, inflation itself isn’t new. When inflation runs hot, it may become challenging to predict where prices will be next year or next month, much less a decade into the future. And it’s even more challenging to predict how much faster than inflation long term care costs will increase.

Cost of Living Adjustments Aren’t Enough

In theory, rising costs (which broadly fall under the umbrella term “inflation”) are something that social security’s cost of living adjustment (COLA) is designed to help with. Every year, the federal government increases social security payouts.

But between the years of 2004 and 2021, social security payouts increased an average of only 2.2%, far too low to reliably cover the rising costs of long term care.

That’s because social security cost of living adjustments are directly tied to inflation, as calculated by the federal government in its Consumer Price Index (CPI) figures. However, there are two primary problems with this:

  • Most COLA adjustments are immediately eaten up by inflation of everyday costs, such as groceries, fuel, and rent.
  • The costs of long term care (and healthcare more broadly) are increasing at a faster rate than inflation generally.

It’s tempting to believe that other retirement sources, such as a 401k, IRA, or annuity, may be able to provide a buffer against those rising costs. But the reality is that most retirement accounts such as these are positioned and invested more conservatively to protect principal. This means that growth rate is usually slow and steady and, as a result, below the inflation rate of long term care costs. As such, these types of funding sources typically do not provide a sufficient hedge against rising costs.

Protecting Yourself from the Unpredictability of Inflation

You may not know just how quickly the costs of long term care will rise before you might need it. But it is safe to say those costs will rise. The only way to protect yourself from that unpredictability is to build those rising costs into your plan.

A sound plan will consider many variables and possibilities. In general, we recommend several aspects to each plan, including the following:

  • Have multiple ways to pay for your long term care lined up: For example, you could couple your LTCI with some self-funded sources. The idea is to have multiple lines of revenue you can tap into if things get dicey.
  • Invest in Long Term Care Insurance: LTCI is a great way to hedge your bets and protect yourself against costs you can’t totally predict. Trying to access long term care without LTCI can be complicated–and expensive.
  • Keep an open mind: Look at all the options on the table when it comes to Long Term Care Insurance. There are several different types of plans (some with compound rates, some with simple–some tied to life insurance, some not). Be sure to plan rationally. Usually that means planning on living a long time and strategizing accordingly.
  • Be realistic about what your COLA increases will cover and what they won’t: Typical inflation is going to eat up most of your social security “raises,” so you shouldn’t count on COLAs to cover your long-term care costs.

Will inflation continue to be as turbulent and chaotic as it is right at this moment? Probably not. But are prices going to come back down? Also probably not. At least, not for everything–and that’s almost certainly the case for long term care. (In fact, the costs of long term care were already rising faster than inflation.) 

Inflation isn’t the only reason that long term care costs are harder to anticipate. Costs are also rising for a positive reason: people are living longer. In 2004, life expectancy averaged 77.6 years. In 2025 (the latest year for which data is available), the number had increased by over a year, to 79.

So it’s important to build that reality into your strategies as you select Long Term Care Insurance. 

Can You Find Additional Income?

For those on a fixed budget, additional sources of income can help add a degree of flexibility and give into your finances. When unexpected long term care costs pop up, being able to tap into additional retirement accounts or state programs can help you make ends meet. 

How much help you can expect from these additional sources of income will vary considerably from individual to individual. It may depend on your age, the state you live in, and your overall health. And even if these additional sources of income exist, the costs of care are rising quickly, diminishing the potential help these extra resources can provide.

Long Term Care Insurance That Protects You from Inflation

That’s why it’s important to think about a Long Term Care Insurance policy that protects you from the unpredictability of rising care costs. 

An Inflation Case Study

Inflation can have direct impacts on your long term care. And it’s easy to see in this example. An accountant (Ben) and a teacher (Leslie) have been married for years. Over twenty years ago, Ben purchased Long Term Care Insurance. When he purchased the policy (way back in the year 2000 with an initial benefit of $150/Day), he had two plan options with regard to inflation protection:

  • Plan 1 had a 5% simple inflation rate.
  • Plan 2 had a 5% compound inflation rate.

Simple inflation vs. compound was the only difference in the plans. In real life, inflation compounds on itself. For example, if a loaf of bread costs $5.00 and inflation is 5%, next year that bread will cost $5.25. If inflation is 5% again, then the year after it will cost $5.51. That’s real life.

Simple inflation doesn’t mirror real life. That loaf of bread will cost $5.25 after the first year, but in the second year it would cost $5.50 using simple inflation. What’s the big deal with a 1 cent difference? For a loaf of bread, not much, but that difference becomes much bigger when you apply compound inflation to long term care costs over a period of years.

Plan 1 was tempting to Ben–it seems very similar to plan 2, and Ben would have saved $400 a year on his premium payments. Luckily, Ben was an accountant and knew how valuable that compound inflation rate would be (you’ll see why in a second). Eventually, Ben selected Plan 2 and even added unlimited coverage to his plan. 

In 2013, Ben needed to activate his policy. If Ben had gone with Plan 1, the 5% simple interest would have provided him with $217/day. But because Ben selected the compound interest option, his plan started paying out $232/day. In 2013, the compound inflation plan paid $5,475 more in benefits than the simple inflation plan would have. In 2023, it will have paid out $31,755 more!

The Best LTC Inflation Protection

The best protection will come from a combination of unlimited benefits and inflation protection. Unfortunately, unlimited protection isn’t as available as it once was–there is only one Hybrid  carrier offering it. Additionally, if a single person applies it’s very expensive. Pricing gets better if a couple applies. However, there are plenty of carriers that offer long benefit periods ranging from 2 – 8 years. So instead of receiving unlimited benefits, you would start with a pool of money, which will grow over time with inflation. 

For example, 6 years of coverage provides approximately $325,000 pool to start and by year 20 it will have grown to over $550,000 with a 3% Compound Inflation Rider (these figures vary depending on the initial benefit you select and other factors).

To a certain degree, inflation rates will vary depending on where you live. That’s because healthcare costs can vary dramatically from state to state. Assisted living in South Dakota, for example, may cost more or less than assisted living in Virginia. This could be true of just about any long term care related costs. So talk to your financial planner about where you’re planning your retirement–and where you might need care.

Finding the Sweet Spot: What is the Best Time to Buy Long Term Care Insurance?

The common wisdom is that the best time to purchase Long Term Care Insurance is when you’re younger. And from a strict insurance standpoint, this is true. (Interestingly, in 2018, the average age of policy issue was 56, a number that keeps trending lower.) That’s because LTCI is medically underwritten, and an individual’s health, age and gender will play a large role in determining: 

  • Whether they’re eligible for coverage
  • What their health rating will be
  • What their premium will be

In most cases, health declines as we age. Not surprisingly, the number of applicants who are declined LTCI coverage increases with age, while the number who qualify for good health discounts also declines with age.

Furthermore, the longer you wait, the higher LTCI premiums are likely to be. Like health insurance, LTCI premiums will most likely increase in the future. However, there is more to this story.

Considering Your Financial Situation

Long term care planning is a critical part of the financial planning picture. And knowing you can handle Long Term Care Insurance costs is critical. We believe that when it comes to age and LTCI, the right time to purchase is only after other financial priorities have been addressed. To assess this, we typically ask clients these four questions:

Are You Saving for Retirement?

According to a recent study, an unsettling 41% of families where the head of the household is between the ages of 35-64 will run out of money during retirement. Before someone thinks about purchasing LTCI, it’s important to have an adequate retirement plan in place. Perhaps they’re contributing to a 401K plan through their employer; perhaps they have a personal retirement plan. Either way, we believe that establishing a good retirement plan takes precedence over obtaining LTCI.

Is Your Credit Card Debt Manageable?

If a client has mounting credit card debt, we encourage them to get it under control before taking on LTCI premiums. We’re not talking about a mortgage and car payment, but rather a skyrocketing burden of debt. Otherwise, the interest due will only continue to balloon, making it even harder to pay off.

Do You Have College Savings Accounts in Place?

Right now, the average, four year cost of in-state public college is a staggering $101,160, and that number is rising. If a client has college-bound children, our recommendation is to make sure they have a college savings plan in place (a 529 plan or other savings vehicle) before they turn their focus to LTCI.

Do You Have an Emergency Nest Egg?

Sometimes unexpected things happen; such as layoffs, medical emergencies and property loss. Many experts recommend saving the equivalent of three to six months for expenses. Yet according to a recent study, 45% of Americans don’t have enough savings to last three months. That’s why we advise our clients to build their emergency nest egg before purchasing LTCI.

There’s No “Best Age” to Buy LTCI

While younger applicants are more likely to be accepted for coverage and secure lower rates, it only makes sense to purchase LTCI if you have their financial ducks in a row.  In other words, there’s no “good age” to buy LTCI. There is only the best age for you and your financial readiness for LTCI. 

Keep in mind, every LTCI carrier sets its own underwriting standards base. Some accept certain health conditions while others may not; and each sets the terms of its rates and discounts. At Gordon Associates, we work with multiple highly rated LTCI carriers so we can match our clients to the best carrier based on their age, health and financial comfort zone to come up with the best plan design. 

Strategic Timing for Couples

It’s important to remember that purchasing Long Term Care Insurance does not happen in a vacuum. Every aspect of your life will play a role in these decisions. Couples, for example, must consider the financial and physical health of both partners. Gordon Associates strives to educate couples to make the best choices for their particular needs. When applying for a shared plan, health underwriting and approval are required of both spouses or partners, and obtaining preliminary health details in advance of an application is key.

Each couple’s unique financial situation will help determine the best policy plan to achieve their desired goals.

Shared Care Rider Effectively Increases Coverage

LTCI options for married spouses or couples living together can provide an added shared benefit rider, whereby either partner can access the benefits first—and leverage those shared or ‘pooled’ benefits.  What this means is that the couple is better protected, as they are less likely to reach the maximum coverage while still requiring care.

Some people will never need Long Term Care coverage, while others may need three or five or more years of coverage. The ability to put a shared rider on the LTCI policy can be especially beneficial to couples. If one spouse requires a lengthier duration and/or more costly level of care, the policy period can essentially be expanded (even doubled) by tapping into the other partner’s coverage. Some Stand-Alone LTCI carriers offer this Shared Care Rider – be sure to ask about it.

Your Window of Eligibility

There is no universally perfect time to buy Long Term Care Insurance. It’s not about your age or when you think it is the right time to start to plan for Long Term Care. It’s about being financially ready. We understand that financially preparedness looks different for each client, and that’s completely understandable. However, success hinges on proactive planning and being well-prepared for the future. This includes understanding your Long Term Care insurance options and selecting the ones that best suit your individual needs. 

Don’t wait for a diagnosis to start the conversation. Request a personalized cost and timing analysis today.

On June 24, 2026   /   Blog