Is long-term care insurance appropriate for you?

Possibly, but it really depends on your specific circumstances. A well-designed long-term care insurance policy may be one of the best financial decisions you'll ever make. It can play a very important role in giving you and your family the "peace of mind" that you will have the necessary resources to pay for quality care - where and when you need it.

To Buy or Not to Buy

You SHOULD consider buying long-term care insurance if --
  • You have assets, income and a lifestyle that you are concerned about protecting.
  • You don't want to rely on the Medicaid (Medi-Cal in California) program.
  • You want to remain financially independent and not have to rely on family or friends for care.
  • You wish to guarantee you and your spouse will receive quality care, in the setting of your choice.
You should NOT consider buying long-term care insurance if --.   
  • You currently receive or may soon receive Medicaid benefits.
  • Your only source of income is a social security benefit or supplemental security income.
  • You have limited assets and can't afford the premiums for the life of the policy.
The National Association of Insurance Commissioners (NAIC) recommends generally that you not spend more than 7% of your income on LTC insurance premiums.  NAIC financial suitability guidelines state that if your assets (not counting your home) are less than $30,000 and/or if your income is less than $20,000 per year, then LTC insurance may not be appropriate.  In some cases other family members may choose to pay or help pay to make sure this coverage is in place.

Because today's long-term care insurance policies offer a variety of features and benefits, it pays to take your time when choosing your policy. In this section we will help you look at what makes up a good policy and the benefit options available to you.


You should consider the following items before considering the details of a long-term care insurance policy.
  • The benefits you receive in the future should be substantially more than the premiums you will pay in your lifetime.
  • It should not be a "cookie-cutter" or generic one-size-fits-all plan. The policy should be customized to your specific personal and financial needs.
  • The premiums should be affordable. Not only now, but in the future as well.
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