Turning 65 can change the way you think about your retirement budget. Medicare begins for most people, Social Security may become part of your monthly income, and protecting the savings you’ve accumulated becomes increasingly important.

It is also an important time to think about an expense Medicare generally doesn’t cover: long-term care.

If you’re already 65 or older, you haven’t necessarily missed your opportunity to purchase long-term care insurance in California. But age, health, coverage choices, and the type of policy you select can all affect your options and what you’ll pay.

Can You Buy Long-Term Care Insurance After Age 65?

Yes. Long-term care insurance is available to people over 65, although insurers establish their own eligibility requirements and generally require medical underwriting.

Your health can be as important as your age. Insurers may consider your medical history, current health, medications, cognitive health, and ability to perform everyday activities when determining whether to offer coverage and at what price.

That means waiting has two potential consequences: coverage may become more expensive, and a future change in health could reduce your coverage options or make it more difficult to qualify.

How Does Age Affect Long-Term Care Insurance Premiums?

Age at purchase is one factor insurers use when pricing long-term care insurance.

However, it’s important to distinguish between the premium you receive when purchasing coverage and future premium increases.

California recognizes different LTC insurance rating methodologies. With an issue-age policy, pricing is based in part on your age when the policy is issued and doesn’t automatically increase simply because you enter a new age bracket. Other policies may use attained-age pricing, under which premiums can increase as you age.

Long-term care insurance premiums can also increase for reasons unrelated to an individual policyholder’s health or claims. California regulates rate increases for policies subject to the state’s rate-stabilization requirements.

How Much Long-Term Care Coverage Do You Need?

More coverage generally means a higher premium, so the objective isn’t necessarily to purchase the largest policy available.

Instead, consider how much of a future long-term care expense you could comfortably pay from retirement income and assets and how much you would want insurance to cover.

Important policy decisions can include:

• The maximum daily or monthly benefit
• How long benefits can be paid
• The elimination or waiting period before benefits begin
• Inflation protection
• Coverage for care at home
• Assisted living and nursing facility benefits

The California Department of Insurance notes that the appropriate benefit amount depends in part on both the premium you can afford and the assets you would otherwise have to spend on care.

Can You Lower the Cost of Long-Term Care Insurance?

There isn’t one universal strategy for lowering LTC insurance premiums. Instead, policy design can be adjusted to balance protection and affordability.

For example, choosing a smaller benefit, a shorter benefit period, or a longer elimination period may reduce the initial premium. Couples should also ask whether a carrier offers a spouse or domestic-partner discount. California notes that insurers may offer discounts when both spouses or domestic partners purchase coverage, as well as discounts based on health or tobacco use.

But the lowest premium isn’t automatically the best policy. The more important question is whether the coverage provides meaningful protection while remaining affordable enough that you can reasonably expect to maintain it.

What If Your Long-Term Care Insurance Premium Goes Up?

Buying a policy doesn’t necessarily mean its premium can never increase.

California requires insurers to meet specific requirements for LTC insurance rate increases, and the California Department of Insurance maintains rate-increase histories for insurers offering or maintaining long-term care policies in the state.

Before purchasing coverage, review an insurer’s rate history along with the benefits and initial premium. If you already own a policy and receive a rate-increase notice, don’t automatically cancel it. Depending on the policy, you may have options to modify benefits and reduce the premium while retaining some coverage.

Where Does Long-Term Care Fit Into a Retirement Budget?

Long-term care planning is ultimately about deciding how much financial risk you want to retain.

Some households have sufficient assets to self-fund a substantial amount of care. Others may eventually qualify for Medi-Cal. For people in between, long-term care insurance can help protect retirement income and assets from an expense that could otherwise consume a significant portion of them.

At 65 or older, the question isn’t simply, “Is long-term care insurance expensive?”

A better question is: If I need long-term care later, how do I want to pay for it?

Understanding that answer can help determine whether insurance belongs in your retirement plan and how much coverage makes sense.

Frequently Asked Questions

Is 65 too old to buy long-term care insurance?

Not necessarily. People over 65 may still qualify for long-term care insurance. Eligibility and pricing depend on the insurer, your age, health and the coverage selected.

Does Medicare pay for long-term care?

Medicare may cover certain short-term skilled nursing or home health services when its requirements are met, but it generally doesn’t pay for ongoing custodial care simply because someone needs help with activities such as bathing, dressing or eating.

Can long-term care insurance premiums increase after I buy a policy?

Yes. Depending on the policy, premiums can increase. California regulates LTC insurance rate increases and provides consumers with information about insurers’ rate-increase histories.

What should I compare when shopping for long-term care insurance?

Compare more than the initial premium. Look at benefits, elimination periods, inflation protection, covered settings, benefit periods, underwriting requirements, available discounts, insurer financial strength, and the carrier’s history of rate increases.

Should I buy long-term care insurance or self-fund my care?

That depends on your assets, retirement income, expected expenses, health, family situation and tolerance for financial risk. Long-term care insurance can transfer some of that risk to an insurer, while self-funding means retaining the risk yourself.