Not Your Parent’s Long-Term Care Policy: What’s Changed and What Hasn’t
Today’s long-term care insurance isn’t the same product many parents bought. Many stand-alone policies from the 1990s and 2000s saw premium increases, and most insurers left that market. Newer linked-benefit policies combine long-term care coverage with life insurance, and some guarantee premiums won’t increase. They also cost more upfront and have limits.
Why do so many people remember a parent’s policy this way?
Many families remember a parent’s long-term care policy, and the premium-increase letters that came with it. The products on the market today have changed, and so have the insurers selling them.
What did parents’ policies look like?
Most were stand-alone, or traditional, policies, sold widely from the 1990s into the 2000s. KFF Health News reports that as insurers miscalculated, they raised premiums or left the market, and the number of carriers offering these plans fell from more than 100 to fewer than a dozen by 2020. (KFF Health News)
The Congressional Research Service notes that premiums in the stand-alone market rose significantly over two decades, driven in part by premiums set too low at the start, inadequate medical underwriting, and lower-than-expected investment returns. (Congressional Research Service)
Those policies still exist and still pay claims. About 5.8 million people had stand-alone coverage at the end of 2024. (Milliman)
What’s different today?
- Linked-benefit policies, which combine life insurance or an annuity with long-term care coverage, have outsold traditional policies every year since 2010, according to the CRS. (Congressional Research Service)
- Some linked-benefit products offer fixed premiums. With the coverage we offer, premiums are guaranteed not to increase as long as they’re paid as scheduled and no loans or withdrawals are taken.
- Many linked-benefit products pay a death benefit if you never need care. See What Happens If I Never Need Long-Term Care?.
- Some products pay a cash benefit you direct instead of reimbursing bills. See How Does Long-Term Care Insurance Work?.
- Inflation protection and benefit period are options you choose. See How Inflation Protection Works in Long-Term Care Insurance.
Then and now at a glance
| Then (many stand-alone policies) | Now (many linked-benefit policies) | |
|---|---|---|
| Premiums | Many saw increases over time | Some offer fixed premiums; ask what the guarantee covers and under what conditions |
| If you never use it | Premiums generally aren’t returned | Often a death benefit or cash value, depending on the type |
| Cost to buy | Can cost less than a hybrid for similar benefits | Generally higher for similar care benefits |
| Who sells it | More than 100 carriers at the peak | Fewer than a dozen sell stand-alone; more offer linked-benefit products |
What hasn’t changed?
- Medical underwriting decides who qualifies. See What to Expect in Long-Term Care Insurance Underwriting.
- Benefits have limits: a monthly benefit and a benefit period.
- Premiums are a real cost.
- The NAIC notes that a traditional stand-alone policy can cost much less than a hybrid for similar benefits. (NAIC Shopper’s Guide)
- The policy, not the brochure, governs what’s covered.
What if your parent has a policy?
- Find the policy and read what it covers, including how benefits start and how long they last.
- Call the insurer and ask about the premium history and any options if premiums rise.
- Don’t cancel or replace a policy without advice, since you could lose benefits already paid for.
- Share what you learn with siblings, and see Signs a Parent Needs More Help at Home.
How can you evaluate a policy today?
Start with the types in How Does Long-Term Care Insurance Work?, use the questions in Researching Long-Term Care Insurance?, and compare illustrations in writing. The NAIC’s consumer guide is a good neutral reference. (NAIC Shopper’s Guide)
Staying Power is a licensed insurance agency that helps people compare today’s options side by side.
Get started to see what care costs and how to fund it.
Frequently asked questions
Are today’s long-term care policies different from older ones?
Yes, in several ways. Linked-benefit policies, which combine long-term care coverage with life insurance or an annuity, have outsold traditional policies annually since 2010, and some offer fixed premiums. Medical underwriting, benefit limits, and premiums still apply.
Do all linked-benefit policies have fixed premiums?
No. Ask what is guaranteed and under what conditions. With the coverage we offer, premiums are guaranteed not to increase as long as they’re paid as scheduled and no loans or withdrawals are taken.
Should my parent drop an older policy?
Not without advice. Dropping or replacing a policy can mean losing benefits already paid for. Talk with the insurer and a licensed professional first.
