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Long-term care services such as nursing homes, assisted living facilities, in-home health care and adult day care come with astronomical costs that could add up to over $100,000 per year. Fortunately, long-term care insurance policies are designed to reimburse you for those costs — sparing you a potential financial crisis.
There are dozens of private insurance firms that sell long-term care insurance policies today. Here are the top five best players in the market, their pros and cons, factors that make them competitive and their track record with customers.
Key takeaways:
- Long-term care encompasses a range of services that assist with everyday custodial tasks such as eating and drinking, using the toilet, dressing and bathing.
- Long-term care insurance policies, offered by private insurers, reimburse members a daily amount for services. Without long-term care insurance, out-of-pocket expenses could add up to over $100,000 per year.
- There are countless long-term care insurance providers. Here, we will review five of the top players, based on reviews from experts and consumers, financial strength ratings, company statements and other sources.
- This list includes: Genworth Financial, Mutual of Omaha, Nationwide, New York Life and State Farm.
What is long-term care insurance?
Long-term care (LTC) insurance policies cover the daily cost of care from nursing homes, assisted living facilities, home health aides and adult day care centers. LTC services help people with chronic conditions or disabilities with daily tasks such as eating, bathing, dressing, using the toilet, transferring, incontinence, housekeeping, taking medications, grocery shopping and even pet care.
Without LTC insurance, out-of-pocket costs are extremely high for the average consumer. Annual expenses range from $19,240 for adult day care, $51,600 for care in an assisted living facility, $53,768 for homemaker services, $54,912 for a home health aide and between $93,075 to $105,850 for a room in a nursing home.
The sooner you enroll in a long-term care policy, the better your pricing options will be. Your mid-50s is the ideal time to apply, according to the American Association for Long-Term Care Insurance, when you’re in good health and can qualify for a well-priced plan.
Premiums vary depending on your age and the condition of your health upon applying. Rates increase annually on your birthday — these increases typically range from 2% to 4% for members in their 50s, but they could rise by 6% to 8% per year through their 60s.
Most standard health insurance policies, including Medicare and employer-sponsored plans, don’t cover long-term care. That is why you need a separate LTC insurance policy to cover your bases if you’re among the 70% of seniors that need this type of health care at some point in your life.
Best long-term care insurance providers
The following analysis of the best long-term care insurance providers is based on each contender’s position regarding flexibility, affordability, financial strength, customer experience and other factors like discounts and waiting periods.
Genworth Financial
Virginia-headquartered Genworth Financial offers long-term care insurance as one of its core products, providing both individual and group coverage along with caregiver support services. The firm does business in all 50 states, but not all LTC policies are available in every state.
The company has over 1 million individuals and families on its LTC plans and has paid over $20.4 billion in claims for policyholders since 1974. More specifically, the firm pays out over $8.2 million in claims each business day.
Pros
- Proven track record in the LTC business, as one of the top insurers of its kind in the United States
- 4/5 stars on ConsumerAffairs, based on over 400 ratings submitted in the last year
- B (fair) financial strength rating from AM Best
Cons
- Details about cost and benefits are only provided by Genworth’s agents
- Medical exam required
- B+ rating; 1 out of 5 stars from customer reviews; 9 complaints in the last three years on Better Business Bureau
Mutual of Omaha
Founded in 1909 in Nebraska, Mutual of Omaha is a well-known financial service and insurance firm in the United States.
Mutual of Omaha’s long-term care policy stands out for its flexibility and opportunities for discounts. Members have the option to receive a reimbursement benefit after completing the policy’s elimination period (when LTC costs are the customer’s responsibility) or receive a cash benefit without an elimination period.
Most notably, Mutual of Omaha offers a 15% discount to policyholders for being in good health. Members can also save 15% on premiums when they are issued a policy with their partner. Or, they could save 5% if they’re married but their partner doesn’t buy a policy.
For an extra cost, Mutual of Omaha’s LTC offerings may include inflation protection, shared care, a security benefit and a return on the premium.
Pros
- Comprehensive and easy-to-use website
- Discounts on premium payments
- Premium waiver when receiving covered long-term care services
- Online cost estimate tool (exact quotes provided by licensed agents)
- 4/5 stars on ConsumerAffairs, based on over 300 ratings submitted in the last year
- A+ (superior) financial strength rating from AM Best
Cons
- Quotes and policy details only provided by agents
- 1.4/5 stars on Better Business Bureau; 118 complaints closed in the last three years
- 2.5/5 stars on Trustpilot, based on 10 reviews
Nationwide
Founded in 1926, Nationwide Mutual Insurance Company and its affiliates have grown to become among the world’s top financial services and insurance providers. While it’s known for its car insurance offerings, Nationwide offers stand-alone long-term care policies and combination packages.
The company’s life Long-Term Care Rider policy offers flexible premiums and access to the death benefit that members can use if they need long-term care.
Nationwide also offers linked-benefit policies, which extend LTC benefits beyond life insurance coverage. Nationwide’s CareMatters program is a fixed-premium policy in which members are guaranteed to receive 100% of their monthly cash benefit to pay for their care as they see fit.
Pros
- Flexible options
- Stand-alone LTC and hybrid policies
- Website features a helpful interactive guide to LTC insurance
- A+ (superior) rating by AM Best
- A+ rating on Better Business Bureau
- 4/5 stars on ConsumerAffairs, based on 22 ratings
Cons
- You need to contact an agent to learn about costs
- Waiting period
- 1.17/5 stars on Better Business Bureau, based on an average of 127 customer reviews; 217 complaints closed in last three years
New York Life
Formed in 1845, New York Life Insurance Company currently operates as the largest mutual life insurance firm in the United States. The firm offers traditional long-term care insurance and plans with a combination of long-term care and life insurance benefits.
New York Life’s traditional LTC plans are best suited for people who already have their life insurance and retirement income needs met. New York Life offers these plans through its My Care and Secure Care products.
New York Life offers a combination of long-term care and life insurance coverage through its Asset Flex product. Premiums start at $10,000, and you can choose to pay the balance up front or through multiyear installments. Through this combined plan, members can pay for a set period of time and receive their money back if they don’t need long-term care. With this type of policy, premiums will never increase. It’s worth noting that this option offers less long-term care coverage than traditional LTC plans.
Pros
- Easy-to-use website with a location-based product comparison tool
- Offers both stand-alone LTC plans or plans with a combination of LTC and life insurance coverage
- Money-back guarantee for unused benefits
- ConsumerAffairs rating of 3/5 stars, based on 129 reviews
- A++ (superior) financial strength rating by AM Best
Cons
- No online quote tool
- Customers can only get a quote by contacting one of the company’s agents
- Better Business Bureau rating of 2/5 stars; 85 complaints closed in the last three years
Northwestern Mutual
Northwestern Mutual was established in 1857 and has grown to become one of the top financial services mutual organizations in the United States. The firm’s financial services and insurance offerings are split into multiple subsidiaries. Its long-term care insurance policies are issued by Northwestern Long Term Care Insurance Company, based in Milwaukee, Wisconsin.
Boosting customer loyalty and satisfaction, Northwestern Mutual prices its LTC plans through “low lapse assumptions,” meaning it anticipates that most members will retain and use their benefits. Northwestern adds upgrades, amendments and new features to members’ existing plans at a price consistent with the initial policy rates.
Pros
- Provides coverage to high-risk individuals with the requirement of health exams
- Offers a long-term care cost calculator
- ConsumerAffairs rating of 3/5 stars based on 77 reviews
- Only 15 complaints in the last three years on Better Business Bureau
- A++ (superior) financial strength rating from AM Best
Cons
- No online quote tool
- Customers can only buy a policy through one of the company’s advisors
State Farm
Founded in 1922 and headquartered in Illinois, State Farm is one of the most recognized names in the insurance business.
It offers a flexible care benefit rider, which allows members to take a portion of the policy’s death benefit if they need to receive benefits each month. This option is available nationwide, with the exception of Massachusetts, New York and Wisconsin.
Pros
- $500 daily limit, according to Consumers Advocate
- Easy-to-use claims filing tool
- 4/5 stars on ConsumerAffairs, based on over 650 ratings submitted in the last year
- A++ (superior) financial strength rating from AM Best
Cons
- Not all LTC policies are available in every state
- Policy changes must be made through a State Farm agent
- Limited information on the company’s website
- 1.37/5 stars on Better Business Bureau; based on 1,349 complaints closed in the last three years
- 2/5 stars based on 50 reviews on Trustpilot
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