Do You Need Long-Term Care Insurance? According to the Department of Health and Human Services, those of us who reach age 65 will have a 40% chance of entering a nursing home, and 10% will stay in one for five years or more. So does this mean you need long-term care insurance? Possibly.

Those numbers don't take into account the millions of aging adults who will need some kind of in-home care as their health falters. By 2020, 12 million older Americans will need long-term care, according to one government estimate. Most will be cared for at home by family members.

Long-term insurance is marketed as a way to fill in the financial gaps if you have a chronic illness or disability and need help with the activities of daily life, like bathing and getting dressed.

"The additional expense of long-term [care] can be $40,000-$90,000 a year," says Rich Arzaga, founder of Cornerstone Wealth Management. "The average American cannot survive this risk and expense."

Nor can you count on the government to bail you out when the time comes: Medicare doesn't pay for "custodial care." Medicare pays only for medically necessary, skilled nursing facility or home health care. It may not give you the choice of the best care in your area. And while Medicaid pays for certain types of care for the low-income elderly, who is eligible and what services are covered varies from state to state, and is determined by such things as income and personal resources.

"Many folks wrongly believe that letting the government pay for their anticipated long-term care needs is the best solution, but Medicaid programs are in trouble funding-wise in every state," says Wilma Anderson, a registered financial consultant. "In the future Medicaid may become even harder to qualify for. If you don't plan for LTC, you may have limited or no choices to pay for care when your health changes."

Here are four things to consider when planning for long-term care:

How will you pay the bills?: Many financial planners and elder care experts say long term care insurance is a good place to start. It typically helps pay for things that your medical insurance won't, like in-home care, or remodeling your home so you can stay in it longer. But as with all forms of insurance, it's vital do your research.

Investigate the cost of a stand-alone long-term care policy: The younger you are, the lower the premium will be. The cost really depends on factors like family health history, age, how much insurance you think you'll need, how long you'll need it, where care is received, and more, explains Marion Somers, PhD, author of Elder Care Made Easier: Doctor Marion's 10 Steps to Help You Care for an Aging Loved One.

Shop around for the best policies and prices. Benefits vary: Weigh the scope of coverage, benefit and waiting periods, inflation protection and other factors against your income and health needs.

Read the fine print: "Insurance companies may try to offer added-value features beyond the basic benefits, but most of them don't add much value at all. Be thoughtful and realistic about your needs and priorities," says Ryan Malone, founder of

Truthfully, says Somers, "Not everyone needs long-term care insurance, but everyone needs a plan."

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Myth: Buy LTC insurance while young. Rates will remain low!!!!
LTC insurance is structured like health insurance. A policy group is marketed over a period of time. Then the group is closed and is treated as a block of business. As the group ages, the demand for benefit payout will increase. Insurance regulations guarantees the company a percentage of premiums for profit and overhead. A large rate increase creates “shock Lapse”, causing many to drop their coverage. Many must or will drop coverage. When a policy lapses, the company retains paid in premiums and any future risk of paying benefits is eliminated.
The below link was posted on an insurance blog which involved a discussion between a retired senior that was hit with a 105% rate increase and a LTC policy. This senior was hit with a 105% rate increase 5 years after purchasing the policy. The rate increase was approved 2 years after purchasing the policy, but because of a standard 5 year price guarantee, the policyholder was not advised of the rate increase for another 3 years. This blog presents two interesting viewpoints.

Long Term Care (LTC) Insurance Board • View topic - 105% price increase from Guarantee Trust Life (GTL). Drop??

February 25 2012 at 10:07 AM Report abuse rate up rate down Reply

While I was looking for a cheap health insurance my friend told me that there are sites, where people can compare prices from many providers.These sites are the only one way to save money on your insurance, because once you register many companies will make you different offers.The site he suggested me was:

I tried them and I saved more than 30%.Try it.Just register and get free quotes!

January 12 2012 at 3:56 AM Report abuse rate up rate down Reply

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December 29 2011 at 10:21 PM Report abuse rate up rate down Reply

This is an article from the wall street journal that sums up this debate. Read the fine print. If you are unable to, seek out a Long term care specialist and they will help you understand your policy. Here is an example to put it into perspective. If you have a problem with your ear will you go to a foot doctor? or if you have a problem with your foot will you go see an obgyn? the same hodls true for insurance. If you are looking at Long Term Care Claims, should you consult your Home or car insurance professional? No, most cases he will not have the specific knowledge of Long term care to adiquatly answer your questions? If you are Looking to purchase long term care would you go to you Financial advisor? No in most cases he will advise you to continue to invest even though your objective is to protect your investment. Seek out a Long Term care Specialist, who will have working relaionship with Car/home insurance professionals, financial advisors, and in may cases Lawyers. These Specialist will be willing to sit down with you and explore the options available, and answer the questions you have. Long Term care is not for everyone. You make the final, yet educated, decision. Yes your protection will cost you some money.
The sooner you purchase it the less it will cost you.

However, weighting the premium against the cost of care is a wise choice. For example the cost of assisted living care in Texas in 2011 is $38,520 per year. The cost of a Private room in a nursing home in Texas is $60,225. Inflation is causing the cost of that care to rise at an alarming rate. In twenty years that same care will cost $102,205 and $159,795 respectivley.
I am 36 and coverage for my wife and I is provided for $160per month. That is a policy that pays me cash as soon as I cannot do two or more activities of daily living or I become cognatively impaired. I also choose a 5% compound inflation rider so I will still have enough money to pay for care when the time comes. If I pay my premiums for 50 years it will have cost me $96,000. That is the amout that one year and four months of care would cost me today.

Who will you choose? The foot doctor aka financial advisor? The OBGYN aka the home and car insurance professional? The Specialist. Please visit for more information or to find a Specialist in your area.

December 15 2011 at 11:21 AM Report abuse rate up rate down Reply

And I actually consider myself lucky that I am a vet with a service connected spinal cord injury.. I actually do have healthcare and the taxpayers foot the bill for my long term care until I die.

November 30 2011 at 6:30 PM Report abuse rate up rate down Reply
1 reply to mjmest's comment

I agree that you are lucky in that you have VA benefits for your health care. You are even luckier if you have care with in 500 miles of your home. (My Dad had to have shoulder surgery the closest hospital that could do it was 442 miles, he made the drive 9 times.) Even luckier if you get disability benefits. Yet in reguards to Long Term Care the VA operates on the concept Last discharged First cared for. Do you want to have the choice of where to live or have the government tell you where to go? HMM something to look in to.

December 15 2011 at 11:35 AM Report abuse rate up rate down Reply

The problem with LTC insurance is that there is no point in buying it younger than 60. There rates in my state are so high that it really does not matter when you buy it. The only incentive to buy it earlier is in case you become uninsurable at a younger age..

The larger issue is diability. I am a totally disabled vet.. so I can give you the major points. Forget what insurance people and financial professionals tell you. They get their "expert" knowledge from insurance company b/s. Who also write the certification and text books on financial planning..
Instead ask people who have gone through the process..

aminsure,, you have no idea what you are talking about.

First of all.. SSDI has "presumptive conditions" like the VA..(They deny it, but there are ). It is not simply unable to work, but it also requires that the disability will last more than 1 year, and the first 5 months don't count. ( actually 6 ). And certain medical conditions are "automatic", blindness, certain cancers, spinal cord injuries ( not backaches ).

Now the real problem with SSDI is that disability determination is done by the individual states, and then passed up to the hhs. And it goes back and forth.

Honestly, your long term disability insurance from your workplace is no easier to deal with. Though they do answer the phone. But check your long term disability policy, and you will find that their definition of disability differs from what you consider disabled. If you can sit at a desk and say "thank you for calling Walmart", then you are not exactly disabled are you? ( this is the point of endless lawsuits ).. Though they will pay the difference between your previous employment and what you get after the disability, and will pay for rehab..

The real issue, and what you cannot prevent, or buy insurance to cover is this: Health insurance. (Yeah we really need reform ). Becoming disabled and having these chronic medical conditions changes your life. Instead of a few doctor visits when your spouse forces you to go ends. You will professionally become a patient.. And guess what? Yo will lose your health insurance long before the need for it ends. And you will become financially devistated by it.

And there is not a single thing you can do, and you cannot insure for it. ( psst health insurance companies hate the chronically ill )

November 30 2011 at 6:28 PM Report abuse rate up rate down Reply

I thought about the 31% number you quoted and that is the approximate percentage of working age people who apply for Social Security Disability who have it approved in the first round. Qualifications are disabled and unable to work in any occupation anywhere in the US no matter their education and background.

November 28 2011 at 11:24 PM Report abuse rate up rate down Reply

I am an agent and broker of insurance (including long term care) and have been for more than 20 years. There are a few important points to watch. First, almost all policies are paid when the insured cannot do two of the six activities of daily living: eating, bathing, transferring, toileting, grooming, dressing or if the insured is cognitively impaired. There is seldom a question about "paying out" because doctor statements are used. Also, almost all policies can be used at home or assisted living or nursing homes. Hospices are covered 95% by Medicare so LTC payout there are very small.

As to the remodeling of houses. We're not talking about new curtains but wheel chair ramps and bathroom modifications are often included in the policies.

It is worth noting that it is better for seniors to age in place where they are comfortable and they have control over their environment and it's cheaper for the senior but that is not how Medicare/Medicaid are set-up. To enhance decision making for the insured LTC is a great option but please know the premiums are not guaranteed to be level for life so do expect increases. Make sure to buy compound interest and know that it is better to purchase a two year benefit than no benefit.

Also, in many States, there are partnership plans that help with preservation of assets.

Al Mendelsohn
Abrams/Mendelsohn, Inc.

November 28 2011 at 11:13 PM Report abuse rate up rate down Reply

If you are over 60, do your loved ones a favor and purchase Long Term Care Insurance.

November 28 2011 at 11:12 PM Report abuse rate up rate down Reply

I have heard that only 31% of long-term care claims presented for payment actually get approved, so I've held off getting this very expensive coverage. If I had some guarantee this coverage would be available to me when I needed it, I'd get it, but I just can't afford to pay the premiums and run the risk of my claim being denied. We must all remember that in the insurnace business, a claims representative's job is to find a way NOT to pay the claim.

November 28 2011 at 10:52 PM Report abuse rate up rate down Reply