By Sylvana Rinehart

Every March we receive our bill for our long-term care insurance policy and my husband invariably asks me “should we keep it?” Every time, I unequivocally answer affirmatively. Why do we go through this annual ritual?

When my husband was going to turn 60, I knew that it was best to purchase a long term care policy earlier rather than later in life. We found a broker who represented several good insurance companies and he demystified the intricacies of the health care insurance world. I would like to share some of what I learned.

Because this is complex and lengthy, I will break it down in two segments:
The first one will be on when, why and affordability for obtaining long-term care insurance (LTCI). Part two will be on what to look for in a plan.

Important questions to ask yourself when considering long-term care insurance:
1. At what age should I start purchasing LTCI?
The younger the better. Generally 60 to 64 is a good age to start because hopefully you don’t have any chronic disqualifying diseases and your premiums will be substantially lower than if you started at 70 and above.
2. Can I afford the premiums?
Will you be able to pay the premiums for the rest of your life or until the policy kicks in? These can be anywhere from $2,000 to $4,000/year if you start early like we did.
3. Have I done the math?
Currently it costs approximately $240,000 annually for 24/7 in-home care, or $72,000 to $96,000 per year for Assisted Living and $110,000 to $146,000 in skilled nursing. An insurance broker can share the life expectancy tables that they use to determine pricing relative to your age and health.
4. If I have budgetary restrictions, should I still purchase LTI?
With a low income and limited assets you might be able to qualify for Medicaid (Federal and State Assistance Program) when you can no longer care for yourself and start needing outside help. Unfortunately, you will need to first exhaust almost all of your resources to qualify for this subsidy.

Despite my husband’s moderated protestations and annual fee increases, we ultimately arrive at the same conclusion. Retain LTCI. A major factor is neither of us wishes to be a burden on the other, nor do we wish to impose any financial burdens on our children. We also wish to retain a certain life style without having to deplete our savings. This is the why in this piece.

Some employers offer long-term care policies to their employees at discounted group rates. These are worthwhile options to consider. I would always recommend using an insurance professional to help you through the literature, as it can sometimes be daunting.

In our next segment, we will address covered services, long-term care benefits and how to protect yourself against increased health costs and inflation. Stay tuned!

Image courtesy of David Castillo Dominici at