When should you buy long-term care health insurance?

Long-term care insurance is designed to pay for extended stays in nursing homes and other lengthy health-care needs.

Long-term care health insurance should be part of your overall retirement planning and purchased in your late 40s or early 50s to protect your assets so that you can enjoy your "golden years." The American Council of Life Insurers estimates that one out of two women and one out of three men who live past age 65 will need nursing home care. Even more of the aging population will need home health care. An increasing number of people ages 18 to 64 are using long-term care services.

Would you be able to pay $50,000 to $60,000 out-of-pocket today for a year of nursing home care? How would this devastating cost impact your retirement savings? Medicare will provide only limited financial assistance with long-term health-care needs. If you needed home health care immediately, would you be able to pay $15 to $20 per hour to stay in your own home? If you wait to age 70 to purchase long-term care health insurance, you will pay more in premiums over your life expectancy for the same benefits than you would if you purchased it at age 50, even though you would pay the premiums over a longer period.

Why wait until you are older and ill to purchase long-term care health insurance at a time when you may not qualify for coverage and may not have the assets to pay the premiums?

Long-term care insurance premiums are based on your age. The earlier you buy the policy, the lower your premiums will be. Even though you may pay for a longer time, you can benefit from:

• Potentially lower total costs.
• Benefit amounts that increase over time.
• Decreased risk of being disqualified due to a change in health.

Genworth Financial's 2006 Cost of Care Survey reports that the average cost of a private room in a nursing home is $70,912, while a private room in an assisted-living facility carries an average annual cost of $32,294.

When you see these costs, consider how they would fit into your budget if you were to need care. The prudent move is to compare your sources of income and assets to your anticipated financial needs in retirement, then consider whether investing in long-term care insurance is appropriate for you.

If your resources are not sufficient to cover yearly costs of $32,000 to $71,000 on top of expected medical and prescription drug costs, then consider buying long-term care insurance. You will need income today to cover the premiums, but it may mean you can live comfortably in your golden years.

General guidelines: Stick with a top-rated company. Having limited coverage is better than none. Don't underestimate the likelihood of using this coverage. Today's plans pay for all levels of care and personal services like laundry, cooking, cleaning and transportation, where private health, Medicare and supplements do not. Some plans even provide you personal cash payments to use as you see fit.

Because long-term care policies contain a number of variables, such as length of coverage and limits on dollar amounts they will pay, buyers should compare policies carefully. Visit QuoteRetriever.com to receive a free no obligation comparison quotes from the top rated carriers in the country.