Should I buy long-term care insurance?

If you need long-term care services and have to pay to obtain them, what financial resources could you call on? Do you have enough to pay for four or more years in a nursing home, an assisted living facility, or home health care?

If youre over 65, dont rely on Medicare or private health insurance. Medicare doesnt pay for custodial care, and private health insurance rarely pays any of the cost of long-term care.

If you expect to have very little money when you need long-term care services, you might qualify for Medicaid, a government program that pays the medical and long-term care expenses of poor people. If you expect to be in that situation, you probably shouldnt buy long-term care insurance, because your states Medicaid program will pay your long-term care expenses. Buying long-term care insurance would only save the statenot youmoney If you expect to have a lot of money when you need long-term care services, you also probably shouldnt buy long-term care insurance. Instead, you should plan to pay for the care out of pocketthat is, as a regular expense. One financial advisor suggested in a newspaper interview that if your net worth is in the $1.5 million range, not including the value of your home, you could safely skip buying long-term care insurance and treat long-term care expenses, if they arise, as you do your other bills.

If you fall in-between these two categories, owning long-term care insurance, like all other insurance coverages, offers peace-of-mind benefits as well as financial ones. For example, a recent survey of people age 50 and over asked how confident they were that they could pay for long-term care services if they needed them. Among those with long-term care policies, 52 percent said they were very confident and another 40 percent said they were somewhat confident. Among those who didnt own a long-term care policy, only 8 percent were very confident and only 27 percent were somewhat confident.