Long-term Care Insurance Print E-mail
Many of us share a concern about having to use long-term care services in our lifetime. We may know someone who is already receiving long-term care services in the home, in the community or in a facility. We all understand that long-term care services are not cheap. Recent studies indicate that home care used just three times a week can easily add up to about $1,000 per month¹.  Assisted living on average costs $25,908 per year² and a nursing home facility average annual cost is $65,700. So why aren’t more of us buying long-term care insurance?

The most common answer is that the insurance is too confusing or too expensive. But it doesn’t have to be that way. To determine the correct coverage and contain costs for your situation, it is essential to know your income and asset information. Factors that determine how much coverage is needed:
  • Age
  • Health
  • Income
  • Assets to be protected

Upon gathering the above information, it is time to design your long-term care insurance policy. The following factors determine policy coverage and premiums:
  • Benefit amount (monthly or daily)
  • Benefit period (number of years of coverage)
  • Elimination period (waiting period before benefits start)
  • Inflation options
  • Other riders

Every person's situation is different. Some people should not purchase it and others may not be eligible for the coverage. It is important to use an insurance agent that can walk with you step-by-step in choosing the correct coverage for you.

The National Association of Insurance Commissioners, the organization of insurance regulators from all 50 states, sponsors a helpful website for individuals considering long-term care insurance. Go to the website at: www.naic.org/index_ltc_section.htm

In addition, the NAIC has produced an excellent booklet, A Shoppers Guide to Long Term Care Insurance, which all long-term care insurance agents are required to provide to prospective buyers.

Consumers Reports also offers a useful discussion about whether it makes financial sense for individuals to purchase long-term care insurance.

Many Area Agencies on Aging also offer individual counseling on long-term care insurance through their Medicare Medicaid Assistance Programs. To be connected to the program near you, call (800) 803-7174.

James J. Speir, owner of Speir Financial Services, LLC, helps many clients determine their insurance needs. He is also founder and President of the
Senior & Caregiver Resource Network. James can be reached at (888) 458-0667 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

SOURCES:
  1. A Guide to Long Term Care Insurance, Health Insurance Association of America, 2002.
  2. Met Life Mature Market Institute Study, 2002.