What Long-Term Care Insurance Covers in Illinois

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Long-term care insurance policies vary depending on the provider, but most have similar core features. In Illinois, a typical policy covers services that assist with activities of daily living (ADLs). These include bathing, eating, dressing, continence, toileting, and transferring (moving from a bed to a chair, for example). If you are unable to do at least two of these tasks without help, your benefits may begin.

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Policies in Illinois may also include coverage for:

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• In-home care, provided by a licensed caregiver or home health aide
• Assisted living facilities, which offer a combination of housing and support services
• Adult day care centers, especially useful for families who wish to keep loved ones at home during the evenings
• Nursing homes, which provide 24-hour medical supervision and skilled care
• Respite care, which gives family caregivers a short-term break
• Hospice or end-of-life care

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It’s essential to understand that long-term care insurance is distinct from Medicare or Medigap. Medicare only covers short-term skilled care after hospitalization—like rehabilitation—and only up to 100 days under limited conditions. It does not pay for custodial care, the kind most often needed in long-term care situations.

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Illinois mandates that all long-term care insurance policies sold in the state are "tax-qualified." This means benefits received are generally not considered taxable income, and premiums may be partially deductible depending on your age and tax filing status. Policies must also include inflation protection for purchasers under age 76, ensuring coverage keeps pace with the rising cost of care.

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Another key feature unique to Illinois is the federal/state Partnership for Long-Term Care program. This initiative encourages residents to purchase private insurance by allowing them to protect more of their assets if they later apply for Medicaid. With a Partnership-qualified policy, every dollar the policy pays in benefits lets you retain that much in assets, above the normal Medicaid limit. It's an essential consideration for middle-income families worried about outliving their policy or needing additional support later in life.

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Comparing policies is critical. Look for terms like 'elimination period' (the waiting time before benefits begin), daily benefit amount (usually ranging between $100 to $300), and benefit period (how long coverage lasts). Choose features that align not just with your financial plan, but with your personal values and care preferences.

Costs and Affordability: What Long-Term Care Insurance Costs in Illinois

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One of the biggest concerns around long-term care insurance is cost—and it’s a valid one. However, like any investment, the real value lies in how well it protects you from bigger financial risks down the road. In Illinois, the average annual premium for a 55-year-old purchasing a comprehensive policy is approximately $2,500, though rates can vary significantly depending on age, gender, health history, and selected benefits.

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Here's a simple example: A healthy, non-smoking 55-year-old couple might buy a joint long-term care policy with a daily benefit of $150, a benefit period of 3 years, and built-in 3% inflation protection. Their annual premium might range from $3,500 to $5,000 combined. In contrast, waiting until age 65 could increase that cost by 40–60%.

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Illinois residents also have a few cost-saving options. Many insurers offer discounts for married couples, preferred health status, or if both spouses purchase coverage together. Some employers offer group long-term care plans, which may provide reduced rates and streamlined underwriting. Even the state's Partnership Program helps by enabling people to retain more assets if they must turn to Medicaid later.

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Is it worth it? Consider the math: If you pay $2,500 per year for 20 years, that’s $50,000 in total premiums. But if you require full-time nursing home care costing $85,000 a year, even a two-year benefit period brings in $170,000 in claim payments—more than triple your investment. And that's not counting additional benefits like in-home care that could help you avoid institutional care altogether.

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Timing makes a considerable difference. Premiums become significantly higher with every five-year age increase past 50, and you’re more likely to be declined due to pre-existing conditions as you age. Also, while some worry about rate increases, Illinois law requires insurers to prove financial necessity to the Department of Insurance before raising premiums, offering a degree of consumer protection.

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When building your long-term care strategy, evaluate insurance as one piece of your financial plan. Working with a qualified financial advisor familiar with Illinois-specific products can help match your coverage to your goals, making care more affordable and predictable should you need it.