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Updated July 31, 2026. Quick answer: per the industry association’s 2026 price index, a 55-year-old couple pays about $2,080/year combined for $165,000 of initial benefits each with level coverage, and about $5,050/year combined with 3% annual benefit growth. The same couple buying at 65 pays about $7,030/year for the growing design. Identical coverage varies up to 80% between carriers, which makes shopping multiple quotes the single highest-return hour in this market.
2026 benchmark premiums ($165,000 initial benefit)
- Single man, 55: $950/year level · $2,200/year with 3% benefit growth
- Single woman, 55: $1,500/year level · $3,750/year with 3% growth (women pay more because they claim more, longer)
- Couple, both 55: $2,080/year combined level · $5,050/year with 3% growth
- Couple, both 65: $7,030/year combined with 3% compound growth
Source: American Association for Long-Term Care Insurance 2026 Price Index. Two structural facts matter more than any single number. Your price is set by your age and health on the day you apply, permanently — there is no re-rating for getting older, only for the whole class. And the association’s own carrier comparison found rate spreads of 56–80% for identical applicants, so a single quote is not a price — it is one point in a wide distribution.
What the premium buys against
What care actually costs (2025 survey medians)
- $129,575/year ($355/day) — nursing home, private room; semi-private $114,975.
- $74,400/year ($6,200/month) — assisted living.
- $80,080/year — in-home care at the $35/hour median, 44 hours/week.
Source: CareScout 2025 Cost of Care Survey (25,000+ provider rates collected July–November 2025, published by Genworth). These are national medians — metro areas run materially higher — and they are the defaults in the calculator below, editable to your area.
Run the two paths on your own numbers: the self-insure vs insurance breakeven calculator. Deciding when matters as much as whether: buying at 55 vs 65.
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The number that surprises people who bought a long time ago
Downsizing is the one home sale where the gain is usually large and the exclusion usually still covers it. A couple who bought in 1994 for $180,000 and sell at $760,000 with $46,000 of selling costs have a realized gain of about $534,000 before improvements. That is above the $500,000 joint cap — but decades of capital improvements are exactly what brings it back under, and most sellers have never added them up.
Improvements are the lever, and the records are the constraint
A new roof, an addition, a replaced HVAC system, new windows, a finished basement: these add to basis. Repainting and repairs do not. Thirty years of improvements on a family home routinely total six figures, and every dollar of it reduces the gain dollar for dollar. The practical problem is documentary, not legal — the seller who kept receipts pays less than the identical seller who did not.
Why downsizers should check the net investment income tax separately
A retiree with modest ordinary income can still be pushed over the 3.8 percent NIIT threshold by the sale itself, because taxable gain is net investment income. The thresholds are $250,000 on a joint return and $200,000 otherwise, written into Section 1411(b) as fixed figures with no indexing. A sale that produces $120,000 of taxable gain on top of $180,000 of other income crosses the joint threshold and picks up 3.8 percent on the part above it.
The move itself may change the tax
Downsizing usually means moving, and sometimes across a state line. Some states tax the gain the federal exclusion just removed. If the sale and the move are in the same year, the order of the two matters, and it is worth checking the destination state before signing.
Related
Methodology
- Exclusion caps, the 2-of-5 test, the nonqualified-use allocation, the reduced-exclusion fraction and the depreciation carve-out are taken from the text of 26 U.S.C. 121. The 3.8 percent rate and its thresholds are from 26 U.S.C. 1411. Both were read on 2026-07-30.
- Section 121 caps and Section 1411 thresholds are written in the statute as fixed dollar amounts with no indexing mechanism, so they are built in. Long-term capital gain brackets ARE indexed annually, so your rate is an input rather than a lookup.
- Figures were computed by two independently written engines that agree to the cent, and the calculator on this page reproduces both exactly.
- Federal only. State treatment varies and some states do not follow the federal exclusion.
Educational estimate, not tax advice, and not a filed return. Federal only. Confirm anything that changes a filing decision with a CPA or tax attorney.
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