Health care expenses are one of the biggest money worries retirees face after age 65. While Medicare covers many medical needs, it does not pay for most long-term care services. That gap leads many retirees to ask an important question:
Is long-term care insurance worth it after age 65—or is it too expensive to make financial sense?
Let’s break down the cost, benefits, and alternatives so you can compare your options and make a smart finance decision.
What Is Long-Term Care Insurance?
Long-term care insurance (LTCI) helps pay for services that assist with daily activities, such as:
-
Nursing home care
-
Assisted living facilities
-
In-home health care
-
Memory care for dementia or Alzheimer’s
These services are not primarily medical, which is why Medicare generally doesn’t cover them long term.
For retirees without substantial savings, long-term care costs can quickly derail a retirement investment plan.
Why Long-Term Care Becomes a Bigger Issue After Age 65
As people live longer, the likelihood of needing long-term care increases:
-
About 70% of adults over age 65 will need some form of long-term care
-
The average nursing home stay can cost $90,000+ per year
-
In-home care costs rise steadily with inflation
After age 65, even a few years of care can drain retirement money faster than expected.
The Cost of Long-Term Care Insurance After Age 65
This is where many retirees hesitate. The cost of long-term care insurance increases significantly with age.
Typical Costs After Age 65
-
Monthly premiums often range from $200 to $500+
-
Premiums may increase over time
-
Policies purchased later in life offer fewer benefits
Compared to buying in your 50s or early 60s, coverage after age 65 is more expensive and sometimes limited.
Is Long-Term Care Insurance Worth It Financially?
Whether it’s worth it depends on your personal money situation.
It May Be Worth It If:
-
You have moderate savings you want to protect
-
You can afford premiums without straining your budget
-
You want to avoid relying on family for care
-
You don’t want to spend down assets to qualify for Medicaid
In these cases, long-term care insurance can act as a form of risk management, protecting your retirement investment portfolio from catastrophic care costs.
It May Not Be Worth It If:
-
Premiums would consume too much of your fixed income
-
You have substantial assets to self-insure
-
You already qualify for Medicaid
-
You have health issues that raise premiums or disqualify you
For retirees on a tight budget, the ongoing cost may outweigh the potential benefit.
Long-Term Care Insurance vs Other Financial Options: How to Compare
Before deciding, it’s important to compare LTC insurance with other finance strategies.
Long-Term Care Insurance vs Self-Funding
-
Insurance: Predictable premiums, uncertain usage
-
Self-funding: No premiums, but high financial risk
Long-Term Care Insurance vs Medicaid
-
Medicaid: Covers care but requires spending down assets
-
Insurance: Preserves assets but costs money upfront
Long-Term Care Insurance vs Hybrid Policies
Some retirees consider hybrid life insurance or annuity products that include long-term care riders. These options:
-
Cost more upfront
-
May offer guaranteed benefits
-
Provide a death benefit if care isn’t needed
Each option affects retirement money differently.
How Long-Term Care Insurance Affects Estate and Investment Planning
Without coverage, long-term care expenses can force retirees to:
-
Liquidate investments at a bad time
-
Sell a home
-
Reduce inheritance for heirs
With insurance, you trade ongoing premium payments for potential protection of your estate and investment strategy.
The key is ensuring premiums don’t undermine your monthly cash flow.
Common Myths About Long-Term Care Insurance
“Medicare will cover it.”
Medicare only covers short-term skilled care, not extended long-term care.
“I’ll never need it.”
Many people underestimate the likelihood of needing care later in life.
“It’s always a bad investment.”
Insurance isn’t an investment—it’s protection against a high-cost risk.
Final Verdict: Is Long-Term Care Insurance Worth It After Age 65?
Long-term care insurance can be worth it after age 65, but only if it fits your overall finance plan.
It makes the most sense for retirees who:
-
Have assets to protect but not enough to self-fund care
-
Can afford premiums without financial stress
-
Want more control over care choices
For others, alternatives like hybrid policies, self-funding, or Medicaid planning may be a better use of money.
Before buying, compare policy terms carefully, understand future cost increases, and consider speaking with a financial advisor or elder-care planner.
A thoughtful decision today can protect both your retirement income and peace of mind tomorrow.
