LTC insurance covers assistance with Activities of Daily Living (ADLs) when you cannot perform 2+ independently: bathing, dressing, eating, toileting, transferring, continence.

Services covered: nursing home ($8,000-12,000/month), assisted living ($4,000-7,000/month), in-home care ($25-35/hour), adult day care ($70-100/day), respite care for family caregivers.

Does NOT cover: medical treatment (Medicare covers that), independent living, acute hospital stays.

Optimal purchase age: 55-65 years old.

Age 55: Lower premiums ($1,500-2,000/year), easier health qualification, longer premium payment period.

Age 65: Still reasonable rates ($2,500-3,500/year), good balance of cost vs probability.

Age 75+: Very expensive ($6,000+/year), harder to qualify.

Do NOT buy: Under 50 (premiums paid too long), Over 75 (too expensive), or if net worth <$200k or >$2M (self-insure).

Average annual premiums by age (healthy individual, $165,000 benefit, 3-year coverage, 90-day waiting): Age 55: $1,800-2,200/year, Age 60: $2,200-2,800/year, Age 65: $3,000-3,800/year, Age 70: $4,500-6,000/year.

Couples get 30-40% discount.

Factors affecting cost: daily benefit amount ($150-300/day), benefit period (3-5 years or lifetime), waiting period (30-90 days), inflation protection (adds 40-50% to premium).

Lifetime probability of needing LTC: 70% of people over 65 will need some form of care.

Women: 75% will need care, average 3.7 years.

Men: 65% will need care, average 2.2 years.

High risk factors: family history of Alzheimer/dementia, chronic conditions, living alone.

Only 15% need care for 5+ years. 35% need nursing home care.

Self-funding risk: median 3-year nursing home stay costs $300,000-450,000.

Hybrid policies: Combine life insurance with LTC rider - unused LTC benefits go to heirs, no use-it-or-lose-it.

Cost: $100,000-150,000 single premium or 10-year payments.

Short-term care insurance: 1-2 year coverage only, 50% cheaper than traditional.

Self-insure: Need $500k+ liquid assets, invest premium difference.

Medicaid planning: Spend down assets, 5-year look-back period.

Annuities with LTC riders: Guaranteed income plus care benefits.

Yes, insurers can raise premiums on entire policy classes (not individuals).

Historical increases: 40-60% rate hikes common since 2010, some policies saw 100%+ increases.

Why increases happen: people living longer than projected, low interest rates, more claims than expected.

Protection strategies: buy from strong insurers (A+ rated), choose limited pay option (premiums stop after 10-20 years), hybrid policies with guaranteed rates, inflation protection built-in.

Budget for 3-4% annual increases.