Clients ask me all the time whether or not they should have long-term care insurance. The answer isn’t always so cut and dry. The important thing is that if people are going to consider it as part of their retirement planning, they need to make a thorough assessment. In the May 2008 edition of Smart Money, Peter Keating makes the argument in favor of long-term care insurance. Take (Long-Term) Care, Smart Money, May 2008.

The most valuable benefit of long-term care insurance is that it gives you options. No one wants to be in a nursing home. “Americans 65 and over have a 40% chance of entering a nursing home at some point in their lives, according to the Department of Health and Human Services.” Sadly, there are many people currently living in nursing homes who might thrive in less restrictive settings if they could afford them. Unfortunately at-home care and assisted living usually require private payment. There are very few public assistance programs, and most have strict income or asset rules. As Peter Keating points out, it’s clear that depending upon Medicaid to pay for long-term care costs isn’t a wise choice, unless it’s the only choice.

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