Premiums are set largely by your age at application, and most individual policies require a health review. Here is how the timing works and what to weigh.

This guide is general information, not insurance, tax or legal advice. Rules, limits and deadlines change each year, so check HealthCare.gov, Medicare.gov or your insurer for your situation.

Long-term care insurance rewards early decisions in a way few other policies do. The price is set largely by your age on the day you apply, and most individual policies require a health review that can end in a denial. Here is how age, health and underwriting shape your eligibility and your premium, and what to weigh before you sign an application.

Why Does Age Matter When You Apply?

The premium is based largely on how old you are when you buy the policy, along with any optional benefits you select, such as a rider that raises the benefit with inflation. Age works on two fronts at once. The price itself climbs as birthdays pass: rates for new applicants generally rise 2 to 4 percent per year through your 50s and 6 to 8 percent per year in your 60s, according to the American Association for Long-Term Care Insurance. Your health also tends to change with age, and those changes affect whether an insurer accepts you at all. Buying earlier can lock in a lower price and, if you qualify, a good-health discount that stays in place even if your health declines later.

How Does Health Underwriting Work, and Why Can Waiting Cost You?

Most individual policies require medical underwriting, which means answering detailed questions about your health so the insurer can decide whether to approve you. Underwriters screen out would-be buyers whose conditions suggest a disability may come soon, and the screening is strict. In a study of people in the target buying range of 50 to 71, researchers estimated that about 30 percent of those whose wealth met industry suitability standards would be rejected for medical reasons, and about 40 percent of the general population would be disqualified.

Insurers commonly decline people who already use long-term care services, and they weigh other conditions individually. Standards differ between companies, so a denial from one insurer does not mean every insurer will say no. One detail matters most: if you buy a policy before a condition develops, the policy will cover the care you need for that condition. Waiting raises the odds of paying more, qualifying only at a higher non-standard rate, or being shut out entirely.

Is There a Typical Age Range Buyers Consider?

Yes. Many advisors point to a window from the mid-50s to the mid-60s, when applicants are usually still healthy enough to qualify and premiums are lower than they would be later. The exact edges depend on the company: some insurers stop selling new policies at 65, while others will insure applicants at 70 and beyond.

The averages bear this out. Individual buyers are about 60 years old on average, while people buying policies offered through an employer tend to be about 50, and some group policies require no health review at all. Buying in your 40s means paying premiums for many more years before care is likely. Buying at 70 means higher premiums and a real chance of denial. That trade-off is why the mid-50s to mid-60s range comes up so often in consumer guidance.

What Does the Coverage Pay For, and What Does It Exclude?

Long-term care insurance covers long-term services and supports: personal and custodial care in your home, a community organization or a facility. Policies pay a daily amount up to a pre-selected limit once you meet the benefit triggers. Most pay on a reimbursement basis, meaning the insurer pays after you receive covered care and submit a claim, though some costlier policies pay a cash benefit.

To collect, you must be chronically ill. That generally means you cannot perform at least two activities of daily living without substantial help for at least 90 days, or you need substantial supervision because of a severe cognitive impairment. The activities usually include eating, continence, bathing, dressing and moving from a bed to a chair. A licensed health care practitioner must certify eligibility and prescribe a plan of care, and a waiting period, similar to a deductible (our guide to health insurance terms explains how those work), usually passes before benefits begin. Policies also limit how long they pay: many cover two to five years of care, and only a few cover care for life.

The reason people consider this coverage at all is the cost of care itself:

Type of care	Median annual national cost, 2015
Nursing home, semiprivate room	$80,300
Assisted living, single occupancy	$43,200
Home health aide, four hours per day	$29,200

Medicare does not pay for this kind of extended care. Our article on whether Medicare pays for nursing home care explains what Medicare does cover, and Medicare basics covers enrollment if you are approaching 65.

What Alternatives Do People Compare?

Three come up most often. Hybrid policies pair life insurance with long-term care benefits, so if care is never needed, a death benefit can still go to your beneficiaries; people who worry about paying for coverage they may never use often compare these first. Self-funding through savings keeps full control, but it leaves assets exposed to nursing home costs that can exceed $110,000 a year. Medicaid planning treats Medicaid as a possible payer of care, but eligibility depends on strict rules that differ from state to state, so check with your state Medicaid agency before counting on that route. Private sources, including out-of-pocket payments and private insurance, covered about 30 percent of paid long-term support services.

How Much Coverage Should You Buy?

Consumer guidance says to buy neither too much nor too little. If you have enough income to cover part of the care costs, or family members willing and able to help, a smaller policy may cover the remainder. Buying too little only delays the point at which your own assets and income must pay. You can usually decrease coverage later, but increasing it is harder, especially if your health has declined.

Important: A policy you cannot sustain is not protection. The NAIC’s shopper guidance says not to buy long-term care insurance if you cannot afford the premiums, including possible increases, so review your budget before applying rather than after.

What Should You Ask Before Signing an Application?

Start with the premium history, because an insurer can raise premiums after you buy. Tax-qualified plans are guaranteed renewable, meaning the company cannot cancel your coverage because your health or age changes, and their benefits generally are not taxable income; premiums may be deductible as medical expenses if your total qualified medical expenses exceed 10 percent of your adjusted gross income. Then ask:

• Whether benefits are paid on a reimbursement basis or in cash, and how the waiting period works.
• Whether the benefit amount rises with inflation and what that option adds to the premium.
• How long benefits last, and whether home care, assisted living and adult day care are all covered.
• Whether the price fits your budget over time, since your income may change.

Free help exists. State insurance counseling programs such as HICAP in California offer no-cost guidance, and the NAIC publishes “A Shopper’s Guide to Long-Term Care Insurance” with worksheets for comparing coverage. For advice on your own situation, a financial advisor can help you weigh premiums against your savings and family support. A practical first step is to request the NAIC’s shopper guide and your state insurance department’s consumer rate information, then talk through your budget and health history with an advisor or counselor before you submit an application.

Frequently asked questions

Does Medicare pay for long-term care?
No. Medicare is not designed to cover extended long-term care, which is what long-term care insurance is intended to pay for.

Can I be denied for health reasons?
Yes. Most individual policies require medical underwriting, and insurers commonly decline people who already use long-term care services or have certain conditions. Standards vary, so a denial from one company does not guarantee a denial from another.

What happens if I never need care?
With a traditional policy, the premiums buy protection you did not use. Hybrid policies that pair life insurance with long-term care benefits are one alternative people compare for this reason.

Are long-term care insurance benefits taxable?
Benefits from tax-qualified plans are generally not counted as taxable income, and premiums may be deductible as medical expenses if your total qualified medical expenses exceed 10 percent of your adjusted gross income.