Long-Term Care Cost Projection Calculator

How it works

Cost at need = today’s cost × (1 + inflation)^years; total = Σ monthly cost over the duration with continued inflation; policy benefit at need = daily benefit × (1 + rider)^years; pool = daily × 365 × benefit years × rider growth; covered = min(total, pool, monthly benefit × months)

Long-term care is the largest uninsured risk most households carry: help with daily living at home, in assisted living or in a nursing home, which health insurance and Medicare largely do not pay for. Costs run several thousand dollars a month today and have risen faster than general inflation, so a need 25 years away must be projected forward — a $5,900 assisted-living bill becomes about $15,700 a month at 4%. Policies pay a daily or monthly benefit for a benefit period, and unless an inflation rider grows that benefit it will cover only a fraction of the future bill; the comparison here shows the covered share and the gap. Against that stands the alternative of investing the premiums, which for a short, average need may come out ahead but cannot cover the multi-year tail that bankrupts families, which is the real argument for insurance or hybrid policies.

Worked example

Assisted living at $5,900 a month rises to $15,730 a month in 25 years at 4%; three years of care then costs about $600,000. A $200/day policy with a 3% rider pays $419/day by then — $12,730 a month, a $459,000 pool over 3 years — covering about 76% and leaving $142,000 to fund. Premiums of $2,800 a year invested at 5% would grow to $134,000: far short of the care bill, but the policy leverages them 6.5× if care is needed.

Frequently asked questions