Is Long Term Care Insurance Worth It for Long Island Families?

I get two versions of this question. A couple in their late fifties wants to know whether to buy a policy before the premiums climb. And an adult child wants to know whether the policy Dad has been paying on for twenty years is going to be worth anything now that he needs assisted living. I am not an insurance agent, and I do not sell policies. What I can tell you is how these policies behave when a family actually uses one on Long Island, because I see it on move in day.

Long term care insurance is worth it for people who have enough assets to protect that they would not quickly qualify for Medicaid, but not so much that they can comfortably pay for years of care out of pocket. It is also only worth it if you buy while you are healthy enough to be approved and can keep paying the premium for decades. For the right person it is the difference between choosing a community and taking whatever is left. For the wrong person it is an expensive policy that lapses.

The short answer: it depends on what you have to protect

Think of three groups. The first has modest savings and a house; if they need years of care they will spend down and likely qualify for Medicaid, and a policy may not change the ending enough to justify the premiums. The second has substantial assets and could pay for a long stay without selling the house or draining the retirement account; they may choose to self insure. The third is everyone in between, which on Long Island is a very large group, and that is who these policies are built for.

Then layer on age and health. Policies are cheaper and easier to get in your fifties, harder in your sixties and often unavailable after a diagnosis of dementia, Parkinson’s or several other conditions. I cover the health side in what disqualifies you from long term care insurance. Finally, the policy is only worth it if you keep it. Premiums on older policies have risen, and a policy dropped at 78 after twenty years of payments is the worst outcome of all. Talk to a licensed agent and your own financial advisor; I can tell you what the policy will face at a community, not whether to buy one.

What long term care insurance actually pays for

It pays toward the cost of help with daily living when you can no longer do certain things yourself, in a setting that the policy recognizes. On Long Island that usually means assisted living, memory care, a nursing home, or aides who come to the house. It is the only insurance product most families have that does this. Medicare does not pay for assisted living, memory care or independent living rent, and it pays for a nursing home only briefly after a hospital stay, which I explain in does Medicare cover long term care.

Most policies also cover care coordination, some equipment, and respite for a family caregiver. They do not pay for independent living, because no care is being delivered, and they may not pay for the parts of an assisted living fee that the policy defines as room and board unless the policy says so. Read your own policy; the definitions section is where families get surprised.

How a policy works, in plain terms

Every traditional policy has the same handful of moving parts. Here is what each one means and why it matters on the day you file a claim.

Policy term	What it means	Why it matters at move in
Benefit trigger	The condition that starts payments, usually needing help with two of six activities of daily living or having a cognitive impairment that requires supervision	A community’s assessment and your doctor’s notes are the evidence; early stage dementia with supervision needs often qualifies
Daily or monthly benefit	The most the policy pays per day or per month	If the community fee is higher, the family pays the gap
Benefit period or pool	How long payments last, or the total pool of benefits, often expressed as a number of years	Decides whether the policy covers a short stay or a long one
Elimination period	The waiting period, measured in days, before payments start	The family pays the full fee during the wait; ask whether days of care at home count
Inflation protection	A rider that grows the benefit over time	A policy bought twenty years ago without it may cover a fraction of today’s fee
Covered settings	The types of facilities and care the policy recognizes	The community must meet the policy’s definition; most licensed assisted living on Long Island does, but confirm
Tax qualified status	Whether benefits are treated favorably for tax purposes	Ask your tax advisor; most modern policies are tax qualified

I walk through the claim mechanics in how long term care insurance works when you move into assisted living. The two surprises I see most often are the elimination period, which families forget they have to fund, and the monthly benefit cap, which was generous in 2005 and is not generous now.

What a policy costs and what drives the premium

I do not quote premiums because they change by insurer, by year and by person; ask a licensed agent for current numbers. What I can describe is what moves them. Age at purchase is the biggest driver: every year you wait raises the price, and waiting also raises the odds that a health change rules you out entirely. Health at application matters next. Then the size of the benefit, the length of the benefit period, the length of the elimination period and whether you add inflation protection, each of which can move the premium substantially.

Women generally pay more than men on newer policies because they live longer and claim more. Couples often get a discount and can sometimes share a benefit pool. And premiums are not fully fixed: insurers have asked state regulators for increases on older blocks of policies, and many policyholders have seen their premiums rise in retirement. Build that possibility into the decision.

Who benefits most, and who probably should not buy

In my experience the families who are glad they bought a policy share a few traits. They bought in their fifties or early sixties, they chose inflation protection, they had income to keep paying through retirement, and they had assets they wanted to keep: a house for a spouse to stay in, savings for the surviving partner, something to leave the children. Many also had a parent who went through a long illness and saw what it cost.

On Long Island the house is often the largest asset, and it is the one families most want to keep for a surviving spouse. A policy that covers even part of a long memory care stay can be the thing that keeps the house out of the care budget. That is the single most common reason the families I meet are glad they bought one.

The policy tends not to make sense when premiums would strain the budget today, when assets are small enough that Medicaid would arrive quickly anyway, when the person is already in poor health, or when they are so well off that they can fund a long stay without consequence. A couple with one healthy spouse and one with a diagnosis might insure the healthy one; a single person with no heirs and a paid off house might reasonably decide to self fund and plan with an elder law attorney instead. None of these is a universal rule, and a licensed agent and a financial advisor should run your own numbers.

The best age to buy, and the biggest drawbacks

Most agents will tell you that the mid fifties to early sixties is the sweet spot: old enough that the purchase feels real and premiums are not paid for forty years, young enough to pass underwriting and lock in a lower rate. Buying in your late sixties is possible but expensive, and by the seventies most applicants either cannot get coverage or cannot afford it.

The age question also has a couples angle. When one spouse is a few years older or has a health history, agents often suggest applying together while the healthier spouse still anchors the application, because some carriers extend the couples discount even when only one is approved.

The drawbacks families run into

• Premiums can rise, sometimes sharply, after years of payment.
• Traditional policies are use it or lose it; if you never need care, the money is gone.
• The elimination period means paying the full community fee out of pocket for weeks or months.
• The monthly benefit may be well below today’s fee, especially without inflation protection.
• Claims require paperwork: assessments, doctor’s statements, invoices, and sometimes a dispute over whether the setting qualifies.
• Independent living is not covered, and some policies pay less for assisted living than for a nursing home.

None of these is a reason not to buy. They are reasons to know your policy before the day you need it, and to involve someone at the community’s business office early.

Alternatives if a traditional policy is not the answer

The market has changed and there are other ways to cover the risk, each with trade offs that a licensed agent can explain.

Hybrid life and long term care policies

A life insurance policy or annuity with a long term care rider pays for care if you need it and leaves a death benefit if you do not. Premiums are often fixed, underwriting can be lighter, and the use it or lose it problem goes away, at the cost of a larger up front payment.

Using an existing life insurance policy

Some policies can be converted or accelerated to pay for care. I explain the options in using life insurance to cover senior living costs.

Self funding with a plan

Savings, the house, and a realistic view of how long care might last. This works best with an elder law attorney and a financial advisor in the room.

Medicaid planning

For families who may need Medicaid later, early planning with an elder law attorney matters because of timing rules. Medicaid pays for assisted living on Long Island only through a limited program with few participating communities, which I describe in does Medicaid pay for assisted living. New York has also had a partnership style program that links private policies with Medicaid protections; confirm the current rules with an agent.

Using a policy at a Long Island community: what I see on move in day

When a family arrives with a policy, the process at the community follows a predictable path, and the families who do these steps in order get paid sooner.

1. Pull the policy and find the benefit trigger, the elimination period, the monthly benefit and the definition of a covered facility.
2. Call the insurer before touring to open a claim file and ask exactly what documents they need.
3. Ask each community’s business office whether it has billed this insurer before and whether it meets the policy’s facility definition.
4. Get the doctor’s statement and the community’s care assessment in the insurer’s format.
5. Fund the elimination period yourself and keep every invoice.
6. Set a reminder for the annual recertification so payments do not stop.

My post on paying for assisted living and memory care with long term care insurance covers the paperwork in more detail. I have toured more than 90 communities across Nassau, Suffolk and Queens and I know which business offices handle claims smoothly, which is a small thing until it is your parent’s bill. My assisted living on Long Island page explains how fees are structured so you can see where a policy’s monthly benefit lands against a real offer. Ask me for current numbers.

Two more things I have learned at move in. First, some insurers want the community licensed in a specific category and will ask for a copy of the license, so request it from the business office early. Second, a change in care level inside the community, from assisted living to the memory care neighborhood, usually does not require a new claim but does require updated paperwork, and the monthly benefit stays the same even though the fee rises. Know that gap before the transfer, not after.

Bring the policy to our first call

Assisted Living Locators of Long Island helps families across Nassau, Suffolk and Queens choose assisted living, memory care or independent living with the finances in view, and the help is free to families; communities compensate the advisor when a family moves in. I am not an insurance agent or a financial advisor, but I will read the policy with you and tell you how it will behave at a community, and I plan 18 to 24 months past the move so a rising level of care is anticipated.

My office is at 42 Prospect Ave, Glen Cove, NY 11542. Call me with the policy in hand.

Questions readers ask

Read next

• How Long Term Care Insurance Works When You Move Into Assisted Living
• What Disqualifies You From Long Term Care Insurance
• Does Medicare Cover Long Term Care? The Short Answer and the Exceptions