Elder Care Cost Planning

Long-term care insurance break-even.

Compare the premiums you would pay with the benefits you could collect. Enter premium, daily benefit, benefit period and an inflation rider to see the benefit pool, payout and break-even years of care.

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Your numbers

Take every figure from a policy illustration. The inflation rider here grows the daily benefit by the percent you enter each year until the claim, then holds it flat. Real riders differ (simple, compound, capped), so check yours. Premium rate increases are common to model; set your own.

Result

Fill the form and press Calculate.

Benefit pool = daily benefit x 365 x benefit period in years. Break-even care = total premiums / daily benefit paid, plus the elimination period. With the example numbers the pool is $343,903 at claim time and break-even is about 0.79 years of care.

Not financial, legal, insurance or medical advice. This is arithmetic on the numbers you enter. It is not a care assessment, a quote, or a recommendation. Talk to a qualified financial planner, elder law professional, insurance adviser or your care team before you commit money or choose care.

Worked example

Premiums of $2,400 a year for 25 years total $60,000.00. A $150 daily benefit with a 3% compound rider for 25 years grows to $314.07 a day, but care is assumed to cost $300 a day, so the policy pays $300 a day. The pool at claim is $343,903.02. With 2.5 years of care and a 90-day elimination period, benefits paid are 822.5 days x $300 = $246,750.00, a net of $186,750.00 over premiums. Break-even is about 0.79 years of care.

How it works

Premiums = sum of the annual premium, raised by the yearly increase, over the years paid. Daily benefit at claim = daily benefit x (1 + rider)^(years until claim). Paid per day = the lower of that and your daily cost of care, if entered. Benefit days = care days minus the elimination period, capped at the benefit period x 365. Benefits = benefit days x paid per day. Break-even care = premiums / paid per day + elimination period.

Public funding by region

Pick a region for a pointer to the official source. These notes do not say what you qualify for or how much it pays.

Sources

Policy terms, rider types and premiums vary by insurer; this tool uses only the numbers you enter. It ignores interest on premiums, taxes and policy-specific rules.

FAQ

How is the benefit pool worked out?

ACL says the maximum amount per day times the number of days determines the lifetime maximum amount that a long-term care insurance policy will pay.

How long might someone need care?

ACL says, on average, women need care longer (3.7 years) than men (2.2 years), and that someone turning 65 today has almost a 70 percent chance of needing some type of long-term care services in their remaining years. Individual needs vary widely.

What does the inflation rider do?

It raises the daily benefit over time so that it keeps pace with care prices. This tool applies the compound percentage you enter until the claim starts. ACL lists benefits that increase with inflation as an optional benefit that affects the policy cost.

Does a break-even mean the policy is worth buying?

No. Insurance transfers the risk of a very large cost, so it can be worthwhile even if you never claim. This tool only compares premiums with benefits for the scenario you enter.

Does this give insurance advice?

No. Speak to a licensed insurance adviser and read the policy terms, including elimination periods, benefit triggers and premium increase rights.

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