How would you pay for long-term care if you needed it? When baby boomers were asked this in a study commissioned by CareQuest, which helps employers set up long-term care packages, only 5% said they would rely on long-term-care insurance. Most said they expected life, health or disability insurance or government programs to cover the costs.
Buy sooner rather than later. The younger and healthier you are when you get a policy, the cheaper your premiums will be. A 55-year-old would pay $911 a year for a policy that pays $100 a day for three years of assistance, according to a study by the American Council of Life Insurers. A 65-year-old would pay more than double that for the same coverage. If your health is less than perfect, finding coverage can be difficult but is not impossible.
Stick with major issuers. You're buying this protection for the long term, so make sure you find a company that's going to be there a long time.
Don't skimp on coverage. Most people who have long-term-care coverage wish they had bought more, according to a recent study by LifePlans. Consider at least a three-year benefit period, which would cover the average nursing home stay. Also, a short "elimination period" (basically a deductible -- see below), even though it will increase premiums, could save you out-of-pocket costs in the long run. And look for a policy that covers care in as many situations as possible: at home, in an assisted living facility, in a nursing home.