Protecting Against the Costs of Long-Term Illness

The expense of catastrophic illness and long-term nursing home care ranks as one of the major concerns of aging Americans and their families. Most thoughtful people, upon reflection, would prefer not to have health care costs deplete their life savings, effectively disinheriting family members.  Even tapping the equity in your home or other property may no longer be a realistic source of medical payments, in view of the downturn in real estate values.

What can a person do?  It's important to make your plans as early as possible.  Long-term care insurance is a practical approach.  Policies today cover a wide range of options, from home care and assisted living facilities up to the higher levels of care provided by nursing homes.  Insurance costs depend on many factors, especially the age when you purchase the policy.   Insured persons would be eligible for daily benefits paid for home care or to a retirement facility.  Benefits would typically continue for three years, with increases for inflation built in, and would begin after a 90- or 100-day “elimination period.”  

You should investigate carefully the various companies and policies before buying.  Insurance premiums will vary state to state, as will the costs of care.  The most important step you can take is to see an insurance broker who works with a number of companies and can help you sort through the options and costs.

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