If you’ve ever toured an assisted living community, hired a caregiver for a parent, or even just googled “home care costs in the Bay Area,” you’ve probably had the same reaction I did the first time I saw the numbers:

“Wait… it costs HOW much?”

Long-term care is one of those topics nobody brings up at dinner until it’s suddenly urgent. A fall. A diagnosis. A spouse who can’t safely manage alone anymore. And then you’re staring at a bill that looks like a second mortgage, wondering how families actually pull this off. Some pay out of pocket. Some patch it together. A smaller group has long-term care insurance—and when they do, it can be a total game changer.

I recently sat down with Alexis Ochoa, a long-term care insurance specialist, and asked him to walk me through it in plain English: what long-term care insurance covers, when it pays, why buying earlier matters, how policies are structured, and how it can pair with life insurance. What follows is my “no jargon” version of that conversation, plus some practical notes so you can understand the basics and ask smarter questions if you decide to explore coverage.

What long-term care insurance is (and what it isn’t)

Long-term care insurance is designed to help pay for ongoing help with daily living when you can’t safely do certain basics on your own. It’s not “medical insurance.” It’s not meant to pay for your surgery or your hospital stay. It’s meant to pay for the support you need after the medical part is over—or when the problem isn’t something that gets “fixed” quickly.

Here’s the simplest way to think about it:

Health insurance is about diagnosing and treating medical problems.

Long-term care insurance is about paying for the hands-on help you need to live day to day when you can’t function independently.

That might mean help at home for a few hours a day. It might mean assisted living. It might mean a skilled facility if your needs are higher. The common theme is: care and support.

The key trigger: the “two out of six” rule

Most long-term care policies use a standard test to determine when benefits can start. Alexis explained it as the “two out of six” rule.

If you can’t perform two out of the six Activities of Daily Living (often called ADLs), that’s typically when long-term care benefits kick in. Those six are:

• Bathing
• Dressing
• Eating/feeding yourself
• Using the restroom
• Walking/moving around
• Transferring (getting out of bed, standing up from a chair, etc.)

This is also why long-term care insurance isn’t only for “old age.” If you’re younger and you get in a serious accident, or you develop a chronic illness that affects mobility, or you’re recovering from a medical event and can’t function normally for a long period, long-term care coverage may apply. It’s about ability, not age.

What Long Term Care Insurance ypically pays for

Long-term care insurance generally helps cover expenses tied to receiving care when you can’t do those daily activities safely. Depending on the policy and situation, that can include:

• Home care aides or caregivers who come to your home
• Assisted living costs (room, meals, caregiver support)
• Facility care costs when you need a higher level of support
• Some care-related services and supplies associated with that daily assistance

What it usually does not cover: your normal doctor visits, hospital procedures, or things your health insurance is intended to cover. Alexis described it as: long-term care is about the care environment and support, not medical treatment.

A real-world example: “I’m in a full body cast—now what?”

We talked through an example where someone gets in a car accident and can’t perform any ADLs for months. In a case like that, the policy isn’t paying the “medical bills” like surgery or doctor visits. But it may help pay for rehab care, caregiver support, or facility costs related to daily assistance—depending on the policy structure and documentation.

That distinction matters. A lot of people assume long-term care insurance is like “extra health insurance.” It’s not. It’s “I need help living” insurance.

How policies are structured: daily maximum + pool of money

This is where most people’s eyes glaze over, so let me simplify it.

Long-term care policies are often built around two core numbers:

1. A daily maximum benefit This is the maximum the policy will pay per day toward care.
2. A total pool of money (lifetime maximum) This is the total amount available to pay out over the life of the policy.

So if you’re paying for care that costs less than your daily maximum, you’re not using the full daily benefit, which can make your total pool last longer. And if your care needs are part-time (two days a week, a few hours a day), that pool can stretch much further than people assume.

Alexis mentioned that, depending on the product, total pools can be substantial (he cited a maximum benefit pool around 1.25 million). But the more practical point is this: most people don’t need full 24/7 care for a decade. Many care situations are partial, and many are time-limited.

How long do people typically need care?

Alexis shared a common industry statistic: on average, men tend to need care for about 1.6 years, and women closer to 2.5 years. That’s not a guarantee, and every family has stories that don’t match the averages—but it gives context for why many people design policies around a 3-year benefit period as a baseline. It’s not because three years is magic. It’s because it covers a lot of typical scenarios, with room for a second care event later.

What does care cost in the Bay Area?

This is the part that usually makes people sit up straighter.

Alexis walked through typical Bay Area costs. Caregiver support at home can run roughly $30–$50 per hour, which quickly becomes several hundred dollars a day if you need meaningful help. Assisted living costs for a one-bedroom can easily land in the $8,000/month range, and can rise with a higher level of care. Skilled and medically intensive care can be significantly more.

In other words: even “moderate” care can be expensive. And that’s why people like me keep running into families who say, “We’re house rich, cash poor—and we need help now.”

When should you buy it?

If you’ve heard “buy it early,” that’s not just insurance industry marketing. There are two reasons, and both matter:

1. Age impacts cost All else equal, it generally costs less to buy younger.
2. Health impacts approval This one is bigger than people realize. Alexis said that long-term care insurance has a meaningful decline rate—he estimated about 20–25% of applicants may be declined, often because of medical history that the person doesn’t even realize is a problem. Long-term care underwriting tends to rely heavily on medical records and history.

So waiting too long isn’t just about higher premiums. It can be about losing the ability to qualify at all.

He described the “sweet spot” for many buyers as roughly 40–50, with typical maximum purchase ages around 70–75 depending on the product. Could someone buy later? Sometimes. Is it ideal? Usually not.

“Do premiums go up forever?” (Not always.)

This is one of the most surprising parts of my conversation with Alexis.

We’re trained to assume every insurance premium climbs relentlessly forever—health insurance, car insurance, home insurance… they all do it. Alexis explained that with their structure, after a period of time (he cited 10 years), dividends can begin to apply and help reduce the net premium over time for policyholders. That’s not universal across the entire industry, and specifics depend on the company and product—but the big idea is important:

Not all long-term care policies behave like the insurance products you’re used to.

If you’re exploring policies, ask directly: “How have premiums changed historically, and what mechanisms exist to control them?” Get a straight answer.

Can you adjust coverage later?

Alexis explained that their approach includes periodic offers to increase coverage over time without additional proof of insurability—meaning you might start with a smaller, budget-friendly policy, and then increase the benefit pool later as finances allow.

This is a big deal for people who say: “I want coverage, but I don’t want to commit to the Cadillac plan today.”

The key is: policies vary. You have to ask what flexibility exists and what’s guaranteed versus optional.

Inflation: will today’s daily maximum still matter in 20 years?

Another great question—and the answer is nuanced.

Alexis explained that the daily maximum benefit you lock in is generally locked, meaning you typically can’t just “change it” later. However, there may be inflation protection riders that increase the overall pool of money over time by a set percentage to help keep pace with rising costs.

Translation: there are ways to build inflation protection into a policy, but you need to plan for it intentionally. You don’t want to wake up 20 years from now with a daily benefit that used to feel big but now buys you a sandwich and half a caregiver.

Can you have more than one policy?

Yes. Alexis said it’s permitted and not uncommon for planners to have two policies—for example, one through an employer and one privately. It’s less common to see more than two, but it can happen. That can be useful if someone bought an older policy years ago with a lower daily maximum and wants additional coverage today.

What about hybrid policies (life insurance + long-term care)?

Hybrid policies combine a life insurance component with long-term care benefits. They can be appealing because people like the idea of “if I don’t use it, it still pays out.”

But there are tradeoffs. Alexis described that when long-term care benefits are used, the life insurance benefit typically declines. Also, these products can behave differently than traditional long-term care in terms of premium structure and flexibility.

His general take was that hybrid policies can make sense for higher-income households—especially those who can fund them with a lump sum and want a large pool available without ongoing premium concerns. But they may be more complex and not always the best fit for someone simply trying to solve for “how do I cover future care costs affordably?”

If you’re considering hybrid options, treat them like a separate category and compare them apples-to-apples with traditional long-term care.

Can long-term care cover care outside the U.S.?

Potentially, with limitations. Alexis said international care isn’t necessarily “forbidden,” but benefits can be more limited depending on the country and documentation requirements. Policies are generally designed around U.S. care systems.

If overseas care is part of your plan—Mexico, Costa Rica, Portugal, wherever—ask that question upfront and get the policy language clarified before you assume anything.

What do most people choose as “typical coverage” in the Bay Area?

Alexis said it varies by budget, but he often recommends at least around $300–$350 per day for a middle-class household in the Bay Area, with a 3-year benefit period as a common starting point. That’s not a rule. It’s a practical baseline—enough to cover a meaningful portion of real local costs without assuming you need maximum everything.

And here’s the reality check I appreciated: most people shouldn’t expect long-term care insurance to cover every penny of care in every possible situation. The goal is to create a plan that prevents a care event from wiping out your retirement, forcing a fire sale of assets, or turning adult kids into full-time caregivers by default.

The three planning questions that matter most: who, where, and how

Near the end of our conversation, Alexis shared what I think are the best questions to ask—whether you buy long-term care insurance or not:

1. Who would be in charge of your care if you needed help? Is it your spouse? Your adult children? A professional care manager? Are you assuming someone will “just handle it,” or have you actually talked about it?
2. Where would you want to receive care? Most people say “at home” for as long as possible. That’s a great goal. But you should also understand what home care actually costs and what support is realistic.
3. How will you pay for care? Out of pocket? Selling investments? A home equity plan? Long-term care insurance? A combination? This is the part most families avoid until the crisis—and that’s when the math gets ugly.

What I’d add from the real world

I’m not a financial advisor, but I spend a lot of time with homeowners who are planning their next chapter. Here’s what I see over and over:

• Families underestimate cost and overestimate how “manageable” care will be.
• Adult kids want to help, but they have jobs, kids, and lives—and caregiving can burn people out fast.
• Many older homeowners are sitting on significant equity, but the cash flow mismatch is real: care needs can happen before a home is sold, or while the home is being prepared for sale.
• The best outcomes happen when families plan early and build options, instead of hoping they’ll “figure it out later.”

Long-term care insurance is one option to create breathing room and control. It doesn’t solve everything. But it can prevent the worst-case scenario: needing help urgently and having only bad financial choices on the table.

Bottom line

Long-term care insurance is about preserving independence—yours and your family’s. It’s not just about money, and it’s not just about age. It’s about having a plan for the very real possibility that at some point, you’ll need help with daily living.

If you’re thinking about it, don’t start with “what’s the cheapest policy?” Start with the real questions: what kind of care would I want, what does it cost where I live, and what resources do I want to protect?

And if you do explore a policy, ask about approval criteria, benefit triggers (ADLs), daily maximums, total pool, inflation protection, flexibility to increase coverage, and how claims/reimbursements work. The goal is clarity—not fancy brochures.

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