Long-term care insurance
Medicare won't pay for a home health aide, assisted living, or nursing home — beyond a narrow short-term window. A long-term care policy protects your savings and your options.
What LTC covers
The care Medicare won't pay for
Long-term care insurance pays for assistance with daily living — the kind of ongoing, non-medical care that is the most expensive and most common need in later life.
- In-home care — personal care aides, home health aides, skilled nursing at home
- Adult day care centers — structured daytime care and social programs
- Assisted living facilities — residential care with daily assistance
- Memory care units — specialized care for Alzheimer's and dementia
- Nursing homes / skilled nursing facilities — 24-hour nursing care
- Hospice and respite care (on some policies)
The Medicare gap
What Medicare does NOT cover
- Ongoing custodial care — help with bathing, dressing, eating, or mobility
- Long-term stays in assisted living or memory care facilities
- Home health aides for non-medical personal care
- Nursing home stays beyond 100 days (and limited even within 100 days)
- Care driven by dementia or cognitive decline without a skilled nursing need
New Jersey
Long-term care costs in NJ
NJ is one of the most expensive states for care. Planning early is the most effective protection.
$130K+
NJ nursing home / year
$75K+
NJ assisted living / year
$60K+
NJ home aide / year
3 yrs
Average LTC need duration
- NJ median nursing home cost: ~$120,000–$140,000 per year (private room)
- NJ median assisted living cost: ~$65,000–$85,000 per year
- NJ home health aide: ~$55,000–$70,000 per year for full-time assistance
- NJ Medicaid (Medicaid long-term care) requires spending down to asset limits — typically $2,000 in countable assets for Medicaid eligibility
Policy types
Traditional LTC vs. hybrid policies
Both approaches have advantages. The right choice depends on your assets, health, and goals.
Traditional LTC insurance
Annual premiums in exchange for a daily/monthly benefit if you need care. Comprehensive coverage, strong benefit pools. Premium rates can increase over time — this is the primary trade-off.
Hybrid life / LTC policy
Single premium or limited-pay structure. Combines a death benefit with LTC coverage. If you never use LTC benefits, your heirs receive the remaining death benefit. No "use it or lose it" concern.
Home and community-based
Many policies offer strong home care benefits — often the preferred choice over facility care. Ensure the policy you choose has a robust home health benefit, not just facility coverage.
Shared care riders
Married couples can pool benefit periods — if one spouse exhausts their benefit, they access the other's pool. Reduces the risk of one spouse depleting family assets on extended care.
Timing
When to buy long-term care coverage
The best time to plan is before you need it — health and age both determine whether you qualify and at what premium.
- Ages 50–65 offer the best combination of premium affordability and insurability
- Health matters — pre-existing conditions can increase premiums or cause denial
- Waiting until a diagnosis or health event often means higher premiums or uninsurability
- Buying at 55 vs. 65 can cut total premium outlay significantly over a long benefit period
FAQ
Long-term care questions
Why doesn't Medicare cover long-term care?+
Medicare covers skilled nursing care for a limited time after a qualifying hospital stay — up to 100 days total, with copays starting on day 21. It does not cover ongoing custodial care (help with daily activities like bathing, dressing, or eating). That gap is what long-term care insurance addresses.
What about Medicaid (NJ FamilyCare)?+
NJ Medicaid does cover long-term care in nursing homes and, increasingly, home and community-based services. However, qualifying requires spending down your assets to very low levels (generally $2,000 in countable assets). LTC insurance is designed to protect your assets so Medicaid is a last resort, not a first plan.
What is a hybrid life/LTC policy?+
A hybrid policy combines a life insurance death benefit with a long-term care benefit. If you use LTC benefits, they reduce the death benefit. If you never need LTC, your beneficiaries receive the death benefit. Hybrids avoid the 'use it or lose it' concern of traditional LTC policies. They are typically funded with a lump-sum premium rather than annual premiums.
What is an elimination period?+
The elimination period is the number of days you must pay for care yourself before the policy begins paying. Common options are 30, 60, or 90 days. A longer elimination period lowers your premium — think of it as your LTC deductible.
Are LTC premiums tax-deductible?+
Premiums for qualified LTC policies may be deductible as medical expenses, subject to IRS age-based limits. Self-employed individuals may deduct a higher portion. This is one of the few insurance products with tax advantages on the premium side — a licensed advisor and your CPA can advise on your specific situation.
What carriers offer LTC insurance in NJ?+
Traditional LTC carriers include Mutual of Omaha and Transamerica. Hybrid life/LTC products are offered by Lincoln Financial, Nationwide, Pacific Life, and OneAmerica, among others. The market has narrowed over the past decade — we work with the most stable carriers still actively issuing new policies.
Plan before you need to.
A licensed NJ advisor will walk you through traditional and hybrid LTC options — no cost, no obligation.