But while a long-term care policy may be an affordable and attractive choice for some people, for others the cost may be too great or the benefits they can afford are not sufficient for their needs.

Currently, the cost of a year in a nursing home averages about $38,000 and can top $100,000 in some facilities. About one third of all nursing home expenses are paid for out-of-pocket by individuals. Medicare does not cover it, nor does supplemental insurance. Long-term care insurance is one means of defraying these costs. But while a long-term care policy may be an affordable and attractive choice for some people, for others the cost may be too great or the benefits they can afford are not sufficient for their needs.

You should not buy a policy if you can’t reasonably predict that you will be able to pay the premium for the rest of your life, cautions the American Association of Homes and Services for the Aging (AAHSA). The annual premium with inflation protection sold by a private insurance company can run as much as $2000 for someone aged 65. Policies purchased at age 75 will cost two and one-half times more than those bought at age 65, and six times more than those bought at age 55. Large daily benefits or longer benefit periods add to the cost as well.

If you are considering purchasing long-term care insurance, the AAHSA advises you to:

• thoroughly understand the terms of the policy
• obtain full information about the company
• discuss the policy with your family
• disclose all your medical history
• be skeptical of endorsements by celebrities or “the government”
• never pay in cash
• carefully review the policy during the free-look period

Whether you purchase long-term care insurance or not, there’s a good chance you will not need it, says the AAHSA. Two out of three persons who turned 65 in 1990 will either spend no time or less than three months in a nursing home, their studies have found.

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