Who Should Consider Long-Term Insurance?

Long-term care helps millions of older adults live productive lives but can break the bank of whoever's footing the bill. The question may be less "Might I need long-term care someday?" than "How can I afford to pay for it?"

Who Needs It?

• Long-term care can be in your home for a few days a week or in a skilled nursing facility staffed around the clock. You'll need care if you can't perform two activities of daily living, such as moving from a chair to a bed, or feeding yourself. Mental diseases like dementia and Alzheimer's also necessitate care. Consider your family history and how healthy your lifestyle has been. These factors can tell you if you're at an increased risk for someday needing long-term care.

Medicare Myth

• But you have Medicare. You're covered, right? No. The rumor that Medicare will pay for long-term care just isn't true. Medicare may help offset long-term care costs for up to 100 days after a hospital stay, and provide a skilled nurse on an intermittent basis. But it won't pay for ongoing care.

Statistics

• Cost is directly proportional to the level of care required. In 2009, on average, you'd pay $198 a day to stay in a skilled nursing home and you'd be sharing a room with someone else. To stay in an assisted living facility where medical care is not provided, you'd pay $104 a day and get a private room. If you don't have your calculator handy, these turn into big numbers fast. Three years of nursing home care could set you back almost $217,000. But check costs in your area. The numbers can vary widely between states and increase every year.

Your Options

• Even if you think you won't need it, you still need to plan for the contingency. Your options are to buy long-term care insurance, rely on family members to take care of you, or some combination of the two. If you find the premiums prohibitive, involve the rest of your family in the discussion. Look at your situation, health and assets, and leave pride out of it. If your children want to help you pay for insurance, let them. Some insurers sell hybrid policies with life insurance or annuities that may make sense for you. And in 2010, the IRS instituted tax breaks for using an annuity or life insurance proceeds to pay for a policy. If you already have coverage, review it. But don't procrastinate. Insurance premiums can increase dramatically as you age, and you run the risk of developing an ailment or injury that could make you uninsurable.