Long-term care insurance is one of the most underutilized financial tools available to families planning for the cost of assisted living, memory care, or in-home care. As the owner of Peace of Mind Senior Solutions, a Certified Senior Advisor (CSA)®, Certified Dementia Practitioner (CDP)®, and Certified Placement and Referral Specialist (CPRS, I work with families across the Dallas-Fort Worth area who are navigating senior care costs that often range from $3,200 to $7,500 per month. The families who fare best financially are usually those who planned ahead, and long-term care insurance is one of the most important instruments in that plan. This guide explains how long-term care insurance works, what it typically covers, how to evaluate a policy, and what Texas families should consider before making a decision.
What Is Long-Term Care Insurance?
Long-term care insurance is a policy designed to help cover the cost of care services not covered by standard health insurance or Medicare. These services include assistance with activities of daily living, such as bathing, dressing, eating, toileting, transferring, and continence, as well as supervision for cognitive conditions such as Alzheimer’s disease and other forms of dementia.
Medicare generally does not cover long-term custodial care, meaning the ongoing, non-medical assistance that most seniors in assisted living or memory care actually need. Long-term care insurance fills that gap. It pays a daily or monthly benefit toward covered care costs for a defined benefit period, subject to an elimination period and a maximum benefit amount.
What Does Long-Term Care Insurance Typically Cover?
Most long-term care insurance policies cover a broad range of care settings and services. Coverage varies by policy, so reading the specific terms is essential. Standard covered services generally include the following.
Assisted living communities are typically covered. If your loved one needs help with two or more activities of daily living, most policies will pay benefits for care received in a licensed assisted living facility. In Dallas-Fort Worth, assisted living costs approximately $3,200 to $6,000 per month, depending on the community and level of care required.
Memory care communities are covered by most policies when the insured has a qualifying cognitive impairment. This matters because memory care in DFW typically costs between $4,500 and $7,500 per month, and a long-term care policy can meaningfully reduce that out-of-pocket burden.
In-home care, including licensed home health aides and adult day programs, is covered by many policies. Families who prefer to keep a loved one at home for as long as possible can often use long-term care insurance benefits to fund this care before transitioning to a residential setting.
Skilled nursing facilities are usually covered, though Medicare may cover the first portion of a skilled nursing stay following a qualifying hospital admission, as explained in my article on what Medicare does not cover.
What long-term care insurance typically does not cover includes care provided by an unlicensed family member, preexisting conditions, and mental health conditions that do not involve a physical or cognitive basis for care.
How Long-Term Care Insurance Policies Are Structured
Understanding policy structure helps families compare options accurately. The four most important components of a long-term care insurance policy are the daily or monthly benefit amount, the elimination period, the benefit period, and the inflation protection option.
Daily or Monthly Benefit Amount
This is the maximum amount the policy will pay per day or per month toward covered care. A policy with a $150 daily benefit would pay up to $4,500 per month. In the DFW market, where assisted living can cost $3,200 to $6,000 per month, a $150 to $200 daily benefit provides meaningful but not complete coverage. Many families use long-term care insurance to cover a portion of care costs while drawing on savings or other income to cover the remainder.
Elimination Period
The elimination period is the number of days that must pass before the insurance begins paying benefits. Common elimination periods are 30, 60, 90, or 180 days. A 90-day elimination period is the most common. During that time, the insured family is responsible for all care costs. Think of the elimination period as a deductible measured in days rather than dollars.
Benefit Period
The benefit period is the length of time the policy will pay benefits once the policy is triggered. Common benefit periods are 2, 3, or 5 years, with some older policies offering lifetime benefits. The average length of a long-term care stay in the United States is approximately two to three years, though individuals with dementia frequently require care for five or more years. Choosing the right benefit period involves balancing premium cost against the risk of outliving the benefit.
Inflation Protection
Care costs increase over time. A policy purchased at age 55 may not be used until age 80, at which point a $150 daily benefit may cover far less than it would today. Compound inflation protection, typically at 3% or 5% per year, increases the daily benefit each year and is widely regarded as the most important optional feature for younger buyers. Older buyers or those who cannot afford compound inflation protection may choose a simpler inflation option or none at all, accepting that the benefit’s purchasing power will erode over time.
When Should You Buy Long-Term Care Insurance?
The ideal window for purchasing long-term care insurance is between 55 and 65. At younger ages, premiums are significantly lower, and approval is more likely because applicants are generally healthier. Most insurers require a health underwriting review, and conditions such as Alzheimer’s disease, Parkinson’s disease, multiple sclerosis, or recent hospitalization for certain conditions can result in denial.
Waiting until a health event occurs is usually too late. Once a diagnosis is on the record, most insurers will decline the application or exclude coverage for that condition. Families who are considering long-term care insurance for an aging parent should understand that the conversation needs to happen before a crisis, not during one.
How Much Does Long-Term Care Insurance Cost?
Premiums vary based on the applicant’s age at purchase, health status, the daily benefit amount, the benefit period, the elimination period, and whether inflation protection is included. As a general benchmark, a healthy 55-year-old purchasing a policy with a $150 daily benefit, a 90-day elimination period, a three-year benefit period, and three percent compound inflation protection might expect annual premiums in the range of $1,500 to $3,000, depending on the insurer.
Premiums for the same coverage purchased at age 65 are typically 60 to 100 percent higher than at age 55. This is why financial planners generally advise purchasing coverage well before retirement if it fits the budget.
It is worth noting that long-term care insurance premiums are not guaranteed. Insurers have raised premiums on existing policyholders in recent years as claims experience has exceeded original pricing assumptions. Before purchasing a policy, ask the insurer for its rate increase history on similar products. A policy that is affordable today could become a budget strain if premiums rise significantly.
Alternatives and Hybrid Products
Traditional long-term care insurance is not the only way to plan for care costs. Several alternatives and hybrid products have grown in popularity as traditional carriers have exited the market.
Hybrid life insurance with long-term care riders combines a life insurance policy with a long-term care benefit. If the insured never needs care, the death benefit is paid to beneficiaries. If care is needed, the policy’s long-term care benefit pool is drawn down first. Premiums are typically paid as a single premium or over a fixed number of years and are guaranteed not to increase. This product appeals to families who are uncomfortable with the use-it-or-lose-it nature of traditional long-term care insurance.
Annuities with long-term care riders allow a lump-sum premium purchase that generates both a guaranteed income stream and a long-term care benefit multiplier if the annuitant requires qualifying care. This is particularly useful for seniors who already have liquid assets they want to reposition.
Short-term care insurance covers care for up to one year and is typically easier to qualify for medically. While it does not address the risk of multi-year care needs, it can bridge the gap for families who are not eligible for traditional policies.
Self-insurance is the strategy chosen by many high-net-worth families who determine that their investment portfolio can absorb care costs without a dedicated insurance product. This is a legitimate strategy, but it requires disciplined planning and honest projections of potential care costs.
Does Texas Have Any Long-Term Care Insurance Programs?
Texas participates in the Long-Term Care Partnership Program, a federal-state initiative that allows policyholders who exhaust their long-term care insurance benefits to protect an equivalent amount of assets and still qualify for Texas Medicaid. For example, if a policy pays out $200,000 in benefits before being exhausted, the insured can protect $200,000 in assets from Medicaid spend-down requirements. This dollar-for-dollar asset protection makes partnership-qualified policies particularly attractive for families who want both insurance coverage and a potential Medicaid safety net.
To qualify as a Partnership policy in Texas, the policy must meet the state’s inflation protection requirements, which vary by the insured’s age at purchase.
Texas Medicaid, known as the STAR+PLUS waiver, provides home and community-based services and some assisted living personal care for income- and asset-eligible seniors. For seniors who require round-the-clock skilled nursing care, Texas Medicaid may cover nursing home placement for income- and asset-eligible individuals through a separate pathway from the STAR+PLUS waiver. You can learn more in my Medicaid Senior Care Guide for DFW Families.
What to Look for When Comparing Policies
Evaluating long-term care insurance requires comparing not just price but also the insurer’s stability, the breadth of covered settings, benefit triggers, and the claims process. Here are the most important factors to examine.
- Financial strength of the insurer. Long-term care is a long-tail product. The insurer needs to be financially sound 20 or 30 years from now when claims are filed. Look for AM Best ratings of A or better.
- Benefit triggers. Most policies require the inability to perform two of six activities of daily living, or a cognitive impairment. Confirm exactly how the policy defines these triggers and what documentation is required.
- Care coordination services. Some policies include a care coordinator who helps the family navigate the placement process and ensures that care settings qualify for benefits. This is a valuable service that reduces family stress.
- Inflation protection type. Compound inflation protection is far more valuable than simple inflation protection over a 20-year horizon. Understand exactly what you are buying.
- Rate increase history. Ask your broker for the insurer’s history of rate increases on existing policyholders. Some insurers have raised premiums 50 percent or more on older blocks of business.
- Facilities that qualify for benefits. Confirm that the assisted living and memory care communities you are considering in your area are eligible for reimbursement under the policy.
A Note for Families Who Are Already in Crisis
If you are reading this because your parent or spouse already needs care right now and does not have long-term care insurance in place, you are not alone. Most of the families I work with are in exactly this situation. My role as a senior placement advisor is to help you find the right community at the right cost, regardless of how care is being funded. The process is free to families because placement advisors are compensated by the communities where clients are placed. Read more about how the placement process works, or explore the full range of payment options in the article on how to pay for assisted living.
You may also want to review the VA Aid and Attendance benefit if your loved one is a veteran or surviving spouse. In 2026, the Aid and Attendance benefit pays up to $2,424 per month for a single veteran, $2,874 per month for a married veteran, and $1,558 per month for a surviving spouse, with the actual payment determined by subtracting countable income from the Maximum Annual Pension Rate.
Frequently Asked Questions: Long-Term Care Insurance
Does long-term care insurance cover assisted living?
Yes, most long-term care insurance policies cover assisted living. To receive benefits, the insured typically must require assistance with at least two activities of daily living, such as bathing, dressing, or transferring, or have a qualifying cognitive impairment. Once those benefit triggers are met and the elimination period has passed, the policy pays a daily or monthly benefit toward the cost of care. In Dallas-Fort Worth, assisted living costs approximately $3,200 to $6,000 per month, and a policy with a $150 to $200 daily benefit can offset a substantial portion of that cost.
What is the elimination period in long-term care insurance?
The elimination period is the number of days the insured must pay out of pocket for care before the insurance policy begins paying benefits. It functions like a deductible measured in days. The most common elimination period is 90 days. A 90-day elimination period means that during the first 90 days of a care stay, all costs are the insured’s responsibility. Families should plan to have liquid assets available to cover the elimination period before insurance benefits begin.
At what age should you buy long-term care insurance?
The optimal window for purchasing long-term care insurance is between 55 and 65. Premiums are substantially lower at younger ages, and health underwriting is more likely to result in approval. Most insurers require a full health review, and conditions such as Alzheimer’s disease, Parkinson’s disease, multiple sclerosis, or recent major health events can result in denial. Waiting until a health crisis occurs is generally too late. For families whose loved one is already past this window, hybrid life insurance products with long-term care riders may still be available and worth exploring.
What does long-term care insurance not cover?
Long-term care insurance typically does not cover care provided by unlicensed or unpaid family members, conditions that were diagnosed before the policy was purchased and excluded as a preexisting condition, mental health conditions without a physical or cognitive basis, care that does not meet the policy’s benefit trigger requirements, and the elimination period, which is the initial days of care the insured pays out of pocket. Each policy has its own exclusions, so reviewing the actual policy language before purchase is important.
What is the Texas Long-Term Care Partnership Program?
The Texas Long-Term Care Partnership Program is a state-approved program that allows Texans to purchase a qualified long-term care insurance policy and, if they exhaust its benefits, protect a dollar amount of assets equal to what the policy paid out before qualifying for Texas Medicaid. For example, if a policy pays $200,000 in benefits before being exhausted, the policyholder can protect $200,000 in assets from Medicaid spend-down requirements. This asset-protection feature makes partnership-qualified policies particularly valuable for families seeking insurance coverage with a Medicaid safety net.
How much does long-term care insurance cost in Texas?
Long-term care insurance premiums in Texas vary based on the buyer’s age and health at the time of purchase, the daily benefit amount selected, the benefit period length, the elimination period, and whether compound inflation protection is included. As a general reference, a healthy 55-year-old purchasing a policy with a $150 daily benefit, a 90-day elimination period, a three-year benefit period, and three percent compound inflation protection might pay annual premiums in the range of $1,500 to $3,000. Premiums for the same coverage purchased at age 65 are typically 60 to 100 percent higher. Working with an independent insurance broker who specializes in long-term care products is the best way to get accurate quotes from multiple carriers.
What if my parent needs care now and has no long-term care insurance?
If your parent or spouse needs care immediately and has no long-term care insurance in place, there are still options. Private pay using personal savings and retirement accounts is the most common approach. Veterans and surviving spouses may qualify for the VA Aid and Attendance benefit, which in 2026 pays up to $2,424 per month for a single veteran. Texas Medicaid’s STAR+PLUS waiver covers some assisted living personal care costs for income- and asset-eligible residents. A senior placement advisor like Linda Clement, Certified Senior Advisor (CSA)®, Certified Dementia Practitioner (CDP)®, and Certified Placement and Referral Specialist (CPRS) at Peace of Mind Senior Solutions can help your family identify the right community at the right cost and navigate payment options at no charge to your family. Call or text 817-357-4334 or visit peaceofmindseniorsolutions.com to get started.
READY TO TALK THROUGH YOUR OPTIONS?
If you are navigating senior living options right now, you do not have to figure it out alone. I offer a free, no-pressure consultation for families in the Dallas-Fort Worth area who are trying to determine the right next step for their loved one. If you are not in DFW, I can still point you in the right direction. You can reach me in three ways:
- Call or text: 817-357-4334
- Email: info@peaceofmindseniorsolutions.com
- Complete our contact form
There is no obligation and no cost. Just an honest conversation with a Certified Senior Advisor who has helped many DFW families through exactly what you are facing right now.
ABOUT THE AUTHOR
Linda Clement, Certified Senior Advisor (CSA)®, Certified Dementia Practitioner (CDP)®, and Certified Placement and Referral Specialist (CPRS), is the founder of Peace of Mind Senior Solutions LLC, based in Dallas-Fort Worth, Texas. With 20 years of experience in senior healthcare operations, Linda helps Dallas-Fort Worth and other families nationwide navigate senior housing and care decisions with honest, pressure-free guidance. For personalized assistance, contact Linda at info@peaceofmindseniorsolutions.com