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Do Your Homework before Deciding to Purchase Long-Term Care Insurance

Nursing home insurance

People have become increasingly aware of how easily long-term care (LTC) for seniors can wipe out a lifetime’s savings — and insurance companies have been quick to capitalize on that fear. Long-term care insurance has been widely advertised as protection against the costs of long-term care, particularly residential nursing facilities. However, this kind of insurance is expensive, and it often provides only limited benefits — with many restrictions and conditions — that may end up covering only a small percentage, or nothing at all, of your total long-term care costs.

The actual odds of a long nursing facility stay are considerably lower than the insurance industry would like you to imagine, and with the protection afforded by Medicaid laws, there is virtually no risk of being thrown out of a nursing facility and into the street.

When you consider the true odds of a long nursing facility stay along with the high cost of LTC insurance and the other things you could do with that premium money, you may find that for you — as for the 95% of the population over age 65 who have not invested in it — LTC insurance is not a good bet.

Nonetheless, there are some people — for example, those who have assets worth $300,000 to $500,000 above and beyond the value of their homes — for whom LTC insurance may be a sound idea. This is particularly true if LTC insurance is viewed as a safety net rather than as a financial investment — and if your policy includes coverage for assisted living facilities.

The relatively slight chance that an elder will need three or more years of nursing facility care means that insurance companies do not pay out on their policies to nearly the extent that they suggest when they sell the policy. When the policies’ conditions, exclusions, and benefit limits are figured in, the performance of these policies has been quite poor — at least in the decade of the 1990s, for which complete statistics are available.

However, in response to pressure from consumer groups, embarrassing media exposure, and increased competition from other insurers joining the market, LTC policies have improved somewhat in recent years. These improvements include clearer terms and conditions, which give consumers a better idea what to expect for their money.

If you are considering LTC insurance, be a very careful consumer. Comparison shop among several policies, checking each for exclusions and limitations. Don’t base your decision solely on advice from an insurance agent or broker who is trying to sell you a policy. Check the latest analysis of LTC policies by Consumer Reports, a consumer information magazine that regularly does comprehensive studies and comparisons of particular policies. You can find Consumer Reports at any local library or online at (you may have to buy a subscription to access certain information).


If you need legal assistance in planning for long term care or managing an estate, trust or other elder law issue, the Law Office of Scott C. Painter can help. We specialize in elder law issues ranging from nursing home planning, guardianship, wills, trusts, estates, veteran’s benefits, and other related legal matters. A call to us is free, and the best advice is to act now to educate yourself and your options. Waiting to seek legal counsel may limit your options and be costly. Call now for your free consultation 610-378-5140 or visit for more information.