What’s the correct Long Term Care Policy daily benefit amount?

I’m often asked when meeting with clients “what daily benefit dollar amount should we select?”.  The quick response is “as much as you can afford”.  The policy price is determined by your health rating, length of benefits and of course, the amount of that daily benefit.  When Long Term Care policies first came out years ago most agents were recommending $100/day.  With the cost of care increasing with inflation, the amount you should select now really depends on your financial situation, age, geographic location.  If you are in a metro area and plan of retiring in an high cost of living area then a higher daily benefit will help.  A good way to do a little homework is to call a local nursing home.  If the going rate in your area is $6,000 per month…and you divide that by 30 days then we know $200/day would cover most of your costs today, assuming you add inflation protection to your coverage (which is a must for anybody purchasing a policy that is less than about 72 years old).  I typically recommend a range of $150/day to $220/day depending on your assets, age, and where you plan on retiring to.  Also, if this policy will be your only way to cover your long term care costs…then a higher daily benefit is needed.  If you have substantial assets and this policy is going to be used to mitigate most of your costs….then you could select a slightly lower daily benefit.  $200/day is typically what most of my clients purchase today.

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