Should I Buy Long-Term Care Insurance?

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Senior man in long-term care insurance facility
Tyler Olson /

By the time you reach your 50s, it’s natural to start thinking about long-term care insurance. Do you need it, or can you get by without this expensive coverage?

A Money Talks News reader named Theresa asks that question:

“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 myself have thought about nursing home insurance, 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% of Americans will someday end up in a nursing home. Despite this fact, however, only 8% 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 for us.

When shopping for long-term care insurance, pay attention to the fine print. For example, 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.

So, 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 Money Talks News’ latest articles about long-term care.

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.

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.

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