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CONSUMER Reports 
About 70 percent of people now over age 65 will require home health care, an assisted living facility or nursing home care. Photo courtesy Consumer Reports
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Does long-term-care coverage make sense? No one likes to think about having a physical or mental frailty that would cause them to need help with daily activities. But, according to the editors of Consumer Reports Money Adviser, about 70 percent of people now over age 65 will at some point require such assistance. Some might decide to hire a home health aide, while others might choose to move into an assisted-living facility or nursing home. Whatever the decision, long-term care can be expensive. Medicare pays for only some medically related home care and short-term stays in a nursing facility, and nothing at all for long-term care. Medicaid generally covers some home health care and most nursing-home costs, but becoming eligible requires exhausting most personal assets. It might be possible to cover some of these expenses with a long-term-care insurance policy (LTC). The coverage, however, has many drawbacks. It can be expensive, especially because it might require paying for it for decades before it’s used - if it’s used at all. And it often provides only limited benefits with many restrictions and conditions that might leave much of the cost unreimbursed. In general, CR Money Adviser experts say that for those with a net worth below $200,000 to $300,000 (not including their home and depending on the cost of care in their region), an LTC policy won’t be an affordable option. They will probably rely on government programs should they need long-term care. Those with assets of about $2 million or more should be able to pay for care themselves. Those who fall in between are more likely candidates for an LTC policy. Here are some tips for consumers to decide if and when a plan is a good idea: For those in their 40s. Many insurance agents aggressively promote LTC policies to people in their 40s, saying that since risk is low at this age premiums will be cheaper than if waiting another decade or two to buy. But there’s very little reason to buy a plan at this age. There’s time to ramp up savings and prepare to use assets to pay for care. And although premiums would be lower at this age, the insured is likely to be paying them for 30 or even 40 years (the average long-term-care claimant is 79), thereby spending more over time. And there’s no guarantee the premiums will stay level. For those in their 50s. This is probably the best time to begin reviewing options for financing long-term care to see if a policy makes sense. Someone who expects to work to age 67 or 68 and can afford the premiums can buy a policy that can be paid off in 10 years. But that will generally double or triple premiums, depending on the insured’s age. To make a decision, consider whether dementia, neurological disorders or chronic conditions like diabetes run in the family. Having relatives who tend to live a long time might also suggest a need for coverage. For those in their 60s. Most of the planners CR Money Adviser talked with say that if someone is healthy, this might be the best time to actually shop for a policy. The average age at which most people sign up for LTC coverage is 61. Waiting much longer may mean running into insurability and affordability issues. For example, 23 percent of policy applicants in their 60s don’t pass the required physical, and 45 percent of people in their 70s fail. Someone who doesn’t qualify for an individual plan might be able to get group coverage at work or through a professional association. Premiums will be cheaper, and passing a medical exam won’t be required. According to Consumer Report Money Adviser, a good long-term-care insurance policy covers care at home and in assisted-living facilities and nursing homes.
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