Should I buy long-term care insurance and what does it cover?

The best policies pay for care in a nursing home, assisted living facility or at home. Benefits are typically expressed in daily amounts, with a lifetime maximum. Some policies pay half as much per day for at-home care as for nursing home care. Others pay the same amount, or have a “pool of benefits” that can be tapped as needed.

Four key reasons to buy long-term care insurance

1. Preserve your assets for your family instead of spending the money on long-term care.

2. The odds are one-in-three that a man over 65 will need long-term care; for a woman over 65, the odds are one in two.

3. New rules make it hard to qualify for Medicaid.

4. Premiums may be partially tax-deductible

 

Optional Features

1. Restoration of benefits. This feature ensures that maximum benefits are put back in place if you receive benefits for a time, then recover, and go for a specified period (typically six months) without benefits.

2. Nonforfeiture benefits return a portion of premiums or keep a lesser amount of insurance in force if you let the policy lapse. This provision, required by some states, adds to the cost of the policy.