Financial Answer Center
A good long-term care policy helps you pay the cost of nursing home care, adult day care, assisted living arrangements, and home-based care. So, should you buy one? Here are some general factors to consider:
Review the following table to help you make your decision:
If You Are over Age 55, and: |
Should You Consider Long Term Care Insurance?* |
You expect to have no assets other than a home, car, clothing and a burial plot. |
No—You will probably qualify for Medicaid anyway. |
You cannot afford the premiums. |
No—If you fall behind on the premium payments, you will lose coverage anyway. Also, it is better to devote the premium payments to retirement savings instead. |
You have a life-threatening illness, and strongly feel that you will not live past age 70. |
No—If it is not likely that you will live past age 70, the odds of having a long stay in a nursing home are small. Check to make sure that you have adequate medical insurance. |
Your family has a history of diabetes, Alzheimer's disease, arthritis, stroke, etc.** |
Strongly consider—These illnesses can result in long nursing home stays and tend to run in families. If you have significant assets, long-term care insurance may be a good investment. |
There are significant assets other than a house. |
Yes—You have significant assets and it may be difficult to qualify for Medicaid. |
You want your house to go to family or friends and not to be used for unpaid long term care costs after you (and your spouse) die. |
Yes—Although the house is protected from Medicaid, many states can seize the property after you and your spouse die. |
You strongly object to being on Medicaid. |
Yes—Medicaid is government assistance that puts strict limits on people in the program. |
You want choices when selecting a nursing home. |
Yes—Some nursing homes do not accept Medicaid patients in their facilities. If you can pay with insurance, you will have more options. |
You do not expect relatives or friends to be available to help take care of you. |
Yes—Without having a network of family or friends to assist you, the chances of needing home-based or nursing home custodial care increases. |
You are over the age of 79. |
No—It may not be available or may be too expensive. |
* The appropriateness of purchasing long-term care insurance is dependent on the specific facts and circumstances of each individual.
** If you have an existing health problem that is likely to result in the need for long-term care, you will probably not be able to buy a policy due to medical underwriting standards.