Should I Buy Long-Term Care Insurance?

Nursing Home
Photo by Photographee.eu / Shutterstock.com

Welcome to “Ask Stacy,” a short video feature answering money questions submitted by readers and viewers. You can learn how to send in a question of your own below.

If you’re not typically a video watcher, give it a try. These videos are short and painless, and you’ll learn something valuable. But if you can’t deal with video, no problem: Just scroll down this page for the full transcript of the video, as well as some reader resources.

Today’s question is about long-term care insurance — specifically, whether a couple in their mid-50s should have it. Here’s what I think.

For more information on this topic, check out “Should I Buy Long-Term Care Insurance?” and “This Retirement Expense Is Rising Fast — Have You Planned for It?” You can also go to the search at the top of this page, put in the words “long-term care” or “nursing home” and find additional information on this topic.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, everyone, and welcome to your money Q&A question of the day. I’m your host, Stacy Johnson, and this answer is brought to you by MoneyTalksNews.com, serving up the best in personal finance news and advice since 1991.

Today’s question comes from Theresa:

“Should my husband and I consider purchasing nursing home insurance? We are in our mid-50s, debt-free, and have a retirement plan.”

First of all, Theresa, congratulations on being debt-free and having a retirement plan!

I’ve thought about nursing home insurance myself, also known as long-term care insurance. I’m older than Theresa, and I’ve never purchased it, despite having reported on it for years.

Why haven’t I bought it? One reason is that I have a special situation. My wife is much younger than me, and she’s a nurse practitioner. So, I kind of have my own built-in nursing home insurance. Another factor is that neither of my parents — both of whom died years ago — had an illness requiring a long nursing home stay.

While these circumstances hardly guarantee I won’t someday need this coverage, they’re examples of personal factors to consider before paying thousands a year, perhaps for many years, for this type of insurance.

At first blush, long-term care coverage would appear important. Medicare, which we’ll all depend on when we reach 65, doesn’t cover long nursing home stays. It does cover rehabilitation in a nursing home for a month, but not prolonged stays. So, a lot of people are worried — with good reason — about how they’re going to meet those bills if and when they should need a nursing home.

Statistics suggest about 20 percent of Americans will someday end up in a nursing home. Despite this fact, however, only 8 percent of Americans have this type of insurance, most likely because it’s so expensive. While cost differs based on what’s covered and your age, prices range from $1,500 to more than $5,000 annually for this type of specialty insurance. That means many won’t be able to afford it whether they want it or not.

There are two categories of people who don’t need long-term care insurance

  • Rich people: They’re self-insured.
  • Poor people: Medicaid — the government program offering medical care for those with low incomes and few assets — pays for nursing home care.

The solution for the rest of us is to read, compare costs and benefits, and decide if this insurance makes sense and is affordable.

When shopping for long-term care insurance, pay attention to the fine print. Look for exclusions, benefits, when the policy kicks in and how much it pays. Many policies may also feature rising premiums, which could price you out of your policy just as the need for it approaches.

There are so many different things to look for when you shop for nursing home insurance, I can’t begin to cover them in this short video. But if you’re coming up on your mid-50s, do some research and see if it makes sense. There’s plenty of information online, including at MoneyTalksNews.com.

I hope, Theresa, that answers your question. Unfortunately, there isn’t a yes or no to this. You’ve got to weigh a lot of factors, some objective, some subjective. So, do some reading and see if it’s right for you.

Now, let’s close with our quote of the day. It comes from writer Ambrose Bierce.

“Lottery: a tax on people who aren’t good at math.”

I like that one because I hate lotteries. Hope you guys have a super-profitable day, and I’ll see you right here next time.

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter, just as you would any email in your inbox. If you’re not subscribed, fix that right now by clicking here. It’s free, only takes a few seconds, and will get you valuable information every day!

The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

Got more money questions? Browse lots more Ask Stacy answers here.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
The 10 Best Outdoor Home Upgrades for Your Money
The 10 Best Outdoor Home Upgrades for Your Money

There’s still time this summer to make improvements to the exterior of your home. These offer the best payback.

8 Retailers That Offer Free Prescription Drug Delivery
8 Retailers That Offer Free Prescription Drug Delivery

You won’t have to leave the safety of home to get prescriptions if you use these pharmacies.

Eat This Food If You Want to Avoid Alzheimer’s Disease
Eat This Food If You Want to Avoid Alzheimer’s Disease

One type of food associated with the Mediterranean diet offers especially large benefits.

20 Great Part-Time Jobs for Retirees
20 Great Part-Time Jobs for Retirees

Maybe you’re not ready to leave the workplace entirely.

10 Expenses You Should Not Put on a Credit Card
10 Expenses You Should Not Put on a Credit Card

Sometimes it’s simply safer to keep the plastic tucked away.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

This Is the Cheapest Place to Buy a Used Car
This Is the Cheapest Place to Buy a Used Car

Looking for a good deal on a set of wheels? This should be your first stop.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

9 Deep Discounts Available on Amazon This Friday
9 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.