What Are Long-Term Care Insurance Premiums?

Types

Both comprehensive and facility-only long-term insurance policies are available. Comprehensive covers medical care provided at home (such as a visiting nurse), in a nursing home or at an assisted living center. Facility-only policies only cover care given in a nursing home or an assisted living setting and are less expensive than a comprehensive policy, according to the U.S. Department of Health and Human Services. A comprehensive policy also may cover care in an adult day care center.

Several coverage options are available for long-term insurance, but the higher coverage limits and additional benefits increase the premium cost. Daily benefit limits -- how much the insurance company will pay for covered services each day -- can be as little as $50 or as high as $500, according to the U.S. Department of Health and Human Services. A policy with a set amount the insurer will pay before the plan is exhausted, such as $100,000, costs less than an unlimited policy that pays for all expenses.

Premiums for long-term care insurance vary widely by person. The cost of the policy is influenced by the coverage selected, policy type and the age of the person buying the coverage. A younger person typically receives a lower rate than an older person, as the insurer's risk rises with the insured's age. A person buying long-term coverage through his work usually receives a lower rate, as the employer negotiates with the insurer to get a group rate for all his employees. The group rate gives participants premium savings because the insurer reduces the cost to get the business. A larger group of employees with perceived low health risk usually gets a lower rate than a smaller group with health risks, such as chronically ill workers.

A person with a serious or chronic health problem may be denied long-term insurance or have to pay a greater amount in premiums to cover the associated risks. Various riders -- extra benefits the insured can add -- make premiums more expensive but may be worth the cost, depending on the insured's needs. A younger person benefits from an inflation rider, which adjusts the amount the insurer will cover to keep up with rising health care costs.