LTCCPAS.com · Long-Term Care Planning
Waiting raises the premium. It can also remove the option altogether.
Withbert (Bert) W. Payne, CPA, CGMA, Chartered Accountant (England & Wales) · California Insurance License No. 0E90257
September 7, 2026
Long-term care insurance is one of the few things you cannot buy merely because you have decided to buy it. Eligibility is determined by health, not by the ability to pay. A household with substantial assets and a recent diagnosis may find that no carrier will issue a policy at any price.
That is what makes delay different from most financial decisions. If you postpone funding a retirement account, you can contribute more later. If you postpone long-term care coverage, you will pay a higher premium later — and you may receive no offer at all.
What follows sets out what delay actually costs, using published industry pricing and underwriting data rather than estimates. There is no artificial deadline, and nothing here is a reason to hurry a decision that deserves analysis.
Waiting costs money in three ways and eligibility in a fourth. Between ages 55 and 65 the average annual premium for the same benefit design rises about 40 percent. The benefit pool itself ends up smaller, because inflation growth has ten fewer years to compound. Every year of delay is a year without protection. And the proportion of applicants declined for health reasons roughly doubles between the sixties and the seventies.
Higher annual premium at 65 than at 55
Smaller benefit pool at age 85
Of applicants aged 70–79 declined
Of protection forgone
Age at application is the largest single driver of long-term care premium — larger than benefit amount and larger, in most cases, than the choice of carrier. The figures below come from the annual Price Index published by the American Association for Long-Term Care Insurance, which prices a standardized design across leading underwriters: an initial benefit pool of $165,000 growing at 3 percent compounded annually.
| Applicant profile | Purchased at 55 | Purchased at 65 | Increase |
|---|---|---|---|
| Couple, both insured (combined) | $5,010 | $7,030 | +40% |
| Single man | $2,200 | $3,280 | +49% |
| Single woman | $3,750 | $5,290 | +41% |
Average annual premium, $165,000 initial benefit pool with 3 percent compound growth. Couple figures are from the 2026 Price Index, priced as of July 20, 2026; single-applicant figures are from the 2025 Index, which the 2026 edition reports as substantially unchanged for the comparable couple profile ($5,050 in 2025 against $5,010 in 2026). These are published averages, not quotes.
One further point belongs beside that table. For the same design and the same applicants, carriers do not price alike. Five insurers quoting an identical benefit for a couple both aged 60 returned annual premiums of $4,591, $5,661, $6,440, $6,712 and $7,173 — the highest more than 56 percent above the lowest, with spreads across the wider index reaching 80 percent. Comparison across carriers can recover part of what a delay costs. It cannot recover all of it, and it cannot recover health.
A premium comparison understates the position, because the two buyers are not purchasing the same thing. Inflation growth compounds from the date the policy is issued. The earlier buyer gives that growth ten additional years, and by the age at which care is most commonly needed the difference is substantial.
| Same $165,000 pool, 3% compound | At issue | At age 75 | At age 85 |
|---|---|---|---|
| Purchased at age 55 | $165,000 | $298,000 | $400,500 |
| Purchased at age 65 | $165,000 | $221,800 | $298,000 |
Arithmetic on a $165,000 initial pool compounding at 3 percent annually; rounded.
The later buyer pays roughly 40 percent more each year for a pool that is about $102,500 smaller at eighty-five. No amount of shopping can restore the missing years of compound growth.
Premium is the recoverable cost. Insurability is not. Declines are uncommon among applicants in their forties and fifties and become ordinary in the seventies, and the change is not gradual at the boundary.
| Age at application | Share of applicants declined |
|---|---|
| Under 50 | 11% |
| 50–59 | 17% |
| 60–69 | 24% |
| 70–79 | 45% |
American Association for Long-Term Care Insurance underwriting data. Standards differ by product type and by carrier; a separate finding puts declines at 38.2 percent for ages 65–69 and declined-or-deferred outcomes at 47 percent for ages 70–75. A decline becomes part of an applicant’s insurance history, which is why health should be reviewed before an application is filed.
“You can recover from paying a higher premium. You cannot recover the insurability you have lost.”
The premium table assumes the later applicant is still in the same health class. Frequently that assumption does not hold, and the things that break it are rarely dramatic.
Painful, quantifiable, and survivable. This is the cost most people think of.
Inflation growth has fewer years to compound before it is needed.
A claim arising during the interval falls entirely on the household.
The only one of the four that cannot be bought back at any price.
The figures above describe traditional long-term care insurance, which is where the published pricing data is. Much of my work involves a different structure: a single-premium policy covering two insureds, which pays a long-term care benefit if care is needed and a death benefit if it is not. One current illustration, for two preferred non-tobacco insureds both aged 50:
| Two insureds, both age 50 | Guaranteed at issue |
|---|---|
| Single premium, one payment | $271,867 |
| Monthly long-term care benefit | $20,000 per insured; $40,000 combined |
| Benefit duration | Lifetime, for each insured |
| Death benefit if care is never needed | $480,000 |
| Guaranteed first-year cash surrender value | $114,605 |
| Net capital at risk | $157,262 |
| Net capital at risk, per insured | $78,631 |
All figures are guaranteed at issue and do not depend on market performance. Cash surrender value is available from the first day and is loanable, subject to the terms of the contract; loans, withdrawals and surrender charges reduce the benefits. The death benefit is generally income-tax-free, subject to applicable tax rules. Illustrative for the stated ages and health class on a single date, and not a quote.
The $78,631 net capital at risk per insured is less than four months of that insured’s maximum monthly benefit. If care is never needed, the $480,000 death benefit exceeds the $271,867 premium by $208,133.
The same design can be illustrated at issue ages 55, 60, 65 and beyond, holding the benefit level constant so that the premium difference is visible on its own. Those figures are produced from current carrier illustrations on request — they are not projections, and I do not publish estimates of what a policy might cost in a future year.
Some long-term care marketing attaches urgency to a state program. It should not. California has no state long-term care program, no long-term care payroll tax, and no enrollment deadline. The task force that studied one submitted its report in December 2023 and was repealed by its own statute on July 1, 2024. Washington’s exemption window closed on December 31, 2022, and buying a policy today exempts nobody from anything.
The California Department of Insurance issued an alert to agents and brokers on August 23, 2023 addressing precisely this kind of claim. The case for acting earlier is underwriting and pricing, both of which are documented above. It is not a deadline, and anyone presenting it as one is telling you something that is not true.
Acting earlier is not the same as acting quickly. A policy purchased at fifty-five that does not fit the household is not an improvement on one purchased at sixty-five that does. The design has to sit correctly against assets, expected care costs, tax position, liquidity, and estate objectives, and the structure that suits a business owner with a C corporation is not the one that suits a retired couple drawing on a portfolio.
For some households the right conclusion is that no policy is needed at all. Where a decade of care for both spouses would not materially change the plan, self-funding is the correct answer, and I will say so.
The most useful thing a household in its fifties can do is find out where it stands before the answer changes — and that is done through a preliminary underwriting review, discussed informally, not by filing an application to see what happens. A declined application becomes part of your record and follows you to the next carrier. Health history is worth reviewing before anything is submitted anywhere.
I hold CPA and CGMA credentials, am a Chartered Accountant (England & Wales), and hold California insurance license 0E90257. I began my career at Price Waterhouse. I am independent: I compare designs and structures across multiple carriers, my compensation does not vary by carrier or by product, and it does not vary according to whether you buy anything at all. Underwriting comes before design in my process, because a recommendation built on a health picture nobody has examined is not a recommendation.
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Withbert (Bert) W. Payne, CPA, CGMA, Chartered Accountant (England & Wales)
California Insurance License No. 0E90257
Founder & Principal | Insurance Review Services
This is a solicitation for insurance. This material is educational and is not tax, legal, or accounting advice; consult a qualified professional regarding your specific situation. Insurance benefits are subject to underwriting and to policy terms. Premium figures shown are published industry averages for a standardized benefit design and are not quotes; actual premium depends on age, health, state of residence, benefit design and the insurance company selected. Illustration figures apply only to the stated ages, health class and design on the date illustrated and will vary by carrier, health, age and design. Tax treatment of benefits is generally income-tax-free, subject to applicable tax rules. An insurance agent may contact you. © 2026 Insurance Review Services · LTCCPAs.com. All rights reserved. Withbert (Bert) W. Payne, CPA, CGMA, Chartered Accountant (England & Wales) · California Insurance License No. 0E90257.
