Planning Ahead for Care: What Should I Look for in Long-Term Care Insurance, Helmut Höbart?

SBC: Many people believe that the long-term care allowance provides them with adequate financial security, but are now realizing, as they care for their own parents and grandparents, just how high the actual costs are. Based on your practical experience, when is additional financial support needed?

Höbart: In my view, the key factor is the point at which care becomes truly expensive. And that’s the case starting around care level 5, when people are generally already severely limited or bedridden. At the lower levels, people do need some assistance—for example, with personal hygiene—but this can often be adequately covered by in-home care. This type of care is relatively well-subsidized and, in terms of cost, is usually still affordable.

Once someone needs round-the-clock care, the long-term care allowance is no longer nearly enough. And that’s exactly when I recommend taking out private insurance. Those with a larger budget can, of course, get coverage starting at Level 3, but I especially recommend good coverage starting at Care Level 5.

SBC: How many providers are there in Austria, and how did you go about comparing them?

Höbart: The market is smaller than you might think. In Austria, only five insurers currently offer their own long-term care insurance. I first looked at the premiums and then compared the benefits across the different care levels—specifically for a healthy 40-year-old, because that’s a realistic starting age.

It quickly becomes clear that every provider calculates costs differently: Some are very comprehensive, but correspondingly expensive. Others only provide coverage starting at a higher tier, but offer more in return. I ruled out one provider because, despite my inquiries, I didn’t receive any detailed information. If I can’t understand what I’ll actually receive in an emergency, that’s not a basis for a recommendation in my view.

SBC: How exactly do the offers differ?

Höbart: The most important difference lies in whether an insurer pays only a monthly benefit or also makes a lump-sum payment. For example, one provider pays a one-time lump sum of 15,000 euros starting at care level 3—or 30,000 euros with a higher premium—and an additional monthly annuity starting at level 5. Another provider does not pay a lump sum, but instead pays a higher monthly benefit starting at care level 5 for a comparable premium.

Which option is better depends on your individual situation. If you have sufficient savings, what you need most is a reliable monthly payment. Those without a large financial cushion benefit greatly from a lump-sum payment, because the largest expenses occur right at the start of the need for long-term care, as well as when round-the-clock care becomes necessary.

SBC: Why is a lump-sum payment so valuable in these situations?

Höbart: Because there’s almost always an initial investment required. You need a nursing bed, and the bathroom may need to be remodeled. Doors may need to be widened or steps removed so that the person can be cared for at home or even manage some tasks independently.

It’s similar to accident insurance: If I receive a large sum from my insurance company after an accident, I can afford the renovations and other necessary measures without going into debt. With 15,000 euros, you can at least get started on the most important projects, and that can make the difference between being able to continue living at home or not.

SBC: Why did you choose the age of 40 for your comparison?

Höbart: Because the age at which you start plays a huge role, for two reasons. First, the premium increases significantly with age: A 50-year-old insured person pays noticeably more for the same coverage than someone who is 40. And someone who starts at age 20 pays considerably less.

Second, you have to answer health-related questions when taking out a policy. By the age of 50, many people already have pre-existing conditions and may no longer be insurable at all. If we’re honest, many 40-year-olds are already taking medication regularly, and that’s where the dilemma begins. The highest possible enrollment age among the providers I compared is 65, but to qualify, you really need to be in excellent health.

SBC: What is the minimum monthly cost you can expect?

Höbart: For a healthy 40-year-old, a budget of around 50 euros per month is already enough to secure very solid coverage starting at care level 5. Depending on the provider and the plan chosen, this may even include an additional lump-sum payment. For a 50-year-old, the cost for comparable coverage is already significantly higher.

It’s important not only to look at the premium, but also to always consider how much coverage you actually get for your money.

SBC: What should you look for in the terms and conditions, for example?

Höbart: First, look at the health-related questions in the application, since they vary from insurer to insurer. For someone with a pre-existing medical condition, one provider may be a better fit than another. Next, let’s look at supplemental benefits: For example, one provider may continue to pay benefits even if the insured person is hospitalized and the state nursing care allowance is suspended during that time. That’s a nice perk, but it’s often not the deciding factor.

What matters is that the coverage kicks in exactly during the phase when high costs arise—such as for home modifications—and that it fits your individual life situation.

SBC: Is it possible to do an initial comparison on your own, perhaps with the help of AI?

Höbart: That’s definitely a good place to start. You can use AI to get an overview of the strengths of each offer and have it analyze them based on your own criteria. But the real work begins when you look at the differences in the terms and conditions, and that requires experience. Even as an expert, it takes me a whole day to do a thorough comparison—it’s not something you can do in five minutes.

Insurance like this determines whether you’ll be well taken care of in your old age. We live in a time when the government is gradually scaling back its support due to a lack of funds. That’s why you should thoroughly review your own retirement plan before committing.

SBC: As a layperson, how can you tell if you’re getting good advice?

Höbart: The most important criterion is whether the advisor really knows what they’re talking about. My tip: Prepare three specific questions, such as at what care level the benefit kicks in, whether there’s a lump-sum payment, and what health-related questions will be asked. Anyone who can’t answer these questions doesn’t know what they’re talking about.

You should also pay attention to their independence. Anyone who only offers products from a single insurer is in the business of sales, not consulting.

SBC: For whom is this issue particularly urgent right now?

Höbart: For the generation between 40 and 50. That’s exactly the age when you see firsthand, through your own parents or grandparents, just how expensive long-term care is. At the same time, it’s the age when you can still make adequate provisions for yourself at reasonable premiums. Those who start now are not only protecting themselves, but also what they’ve built up and may want to pass on to their family.

Thank you very much for the interview!

Helmut Höbart is an independent insurance broker specializing in personal insurance. He primarily advises clients on disability, health, and long-term care insurance. Before transitioning to insurance consulting, he worked full-time as a rescue and emergency paramedic for the Red Cross and therefore has firsthand experience with the healthcare system. Learn more about him at deine-sichere-zukunft.at