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Chapter 10. Long-Term Care > Long-Term Care Insurance

Long-Term Care Insurance

Long-term care insurance is not for everyone. What is? If your assets, not including your home, are under $100,000, not only would it be relatively easy for you to become eligible for Medicaid to pay for the cost of long-term care in a nursing home, but in addition, the cost of the insurance would most likely not fit within your budget. People with assets of more than $2 million can probably afford to pay for the cost of long-term care themselves without the insurance. According to the Department of Health and Human Services, the average time that a person stays in a nursing home is 2.8 years. Of course, some people with millions of dollars may wish to purchase long-term care insurance as a safeguard for those assets. For the rest of you with assets between $100,000 and $2 million, long-term care insurance may be a viable option for providing for long-term care if, and that is a big if, the premiums fit within your budget.

There are, however, choices you can make in selecting a policy that can reduce your premium. The younger you are when you purchase a long-term care insurance policy, the cheaper the premium will be. The best time to buy long-term care insurance is around age fifty-five. Buying a policy between the ages of fifty and sixty will, over the long haul, cost you far less than if you waited until you were in your seventies to buy long-term care insurance. The average age of long-term care insurance purchasers is rapidly going down. According to a study released in 2003 by the Health Insurance Association of America, the average age of individual purchasers of long-term care insurance was seventy-two in 1990, but dropped to sixty-two in 2001.[2]


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