Should You Purchase Long-Term-Care Insurance?

Long-term-care insurance. It's a subject most people don't want to think about—but many people know they need to.


Critics, however, say insurers are using scare tactics to sell their products, which come with a hefty price. For most people, these critics say, long-term-care policies are either unnecessary or cost more than their benefits are worth. They believe that a great many people would be better off essentially self-insuring or relying on government-funded programs.

Mark Meiners, a professor of health administration and policy at George Mason University, argues in favor of long-term-care insurance. Prescott Cole, a senior staff attorney at California Advocates for Nursing Home Reform, argues against.

Yes: Don't Just Hope for the Best

By Mark Meiners


For anyone 65 and older, the odds are not in your favor. Statistics show 70% of those who reach 65 will need long-term care. With long-term care costing as much as $250 a day, it doesn't take long to completely deplete a lifetime of savings—even if you're "lucky" enough to only need it for a relatively short period of time.

MARK MEINERS: 'The biggest misconception is that Medicare covers long-term care. It does not.' ENLARGE

For those who buy and keep their policy it is a no-regret proposition. No one who has paid premiums and receives their benefits from the policy regrets having paid those premiums. And no one ever regrets being fortunate enough to never need those benefits.

The sad fact, though, is that only seven million to eight million people have bought the insurance so far. The market should be at least twice that size by now. Certain misconceptions, and some wishful thinking, are holding it back.

Some Misconceptions

The biggest misconception is that Medicare covers long-term care. It does not. Medicaid, meanwhile, pays for various kinds and amounts of long-term-care services and support—for the poor. But many states are cutting back on Medicaid benefits, and access to good care is always uncertain.

That isn't to say long-term-care insurance is right for everyone. It's not. The wealthy can be reasonably sure their savings will be enough to pay directly for long-term care, whatever its duration. And despite concerns about quality, Medicaid is there for the poor.

The Wall Street Journal


Critics of long-term-care insurance argue that many who need long-term care use it for less than 90 days, and that most policies have a 90-day deductible, meaning most owners of long-term care insurance will receive no benefits. But who wants to play those odds, hoping they'll be one of the people who only need such care for less than 90 days? And the fact is that most people who need long-term care need it for at least a year or two.

The important thing to understand is that there are a wide range of policies offering different degrees of security, but all preferable to taking the chance of being financially decimated. According to estimates done by the American Association for Long-Term Care Insurance, a typical couple buying a shared policy providing immediate benefits worth $328,500 at age 55 pays an annual premium averaging $2,700. By age 80 their joint benefit has grown to $708,000 with the built-in inflation protection. Alternatively, a typical couple buying a shared policy with $219,000 of coverage could reduce their premium by about 20% to 25%. That's a viable option for those who are worried about this risk. If more coverage is affordable, buy more coverage. But some is better than none.

In theory, it's true, if a person invested $3,500 a year instead of using it to pay insurance premiums, the investment might grow enough to cover any eventual long-term-care bill. But as nice as it sounds, most people simply won't set aside additional savings for long-term-care needs. Moreover, savings of $3,500—should the need for care come sooner than expected—will pay for only $3,500 of care.

Partnership Policies

In a worst-case scenario, a person in nursing care might outlive by many years the coverage that they purchased, wiping out his or her savings. People especially concerned about this might consider so-called Partnership Policies, developed by private insurers and state governments and offered in 40 states. These plans let people qualify for Medicaid's long-term-care benefits while they still have a good amount of savings to spend on other things or leave for their family. (Normally, a person can have no more than $2,000 in savings for Medicaid to pay their long-term-care costs.)

Partnership plans that offer to protect savings of up to $100,000, for example, will pay up to $100,000 in benefits. Then, if the purchaser has savings of more than $100,000, he or she becomes responsible for their long-term-care costs until their savings are reduced to $100,000. At that point, Medicaid will take over the expenses.

Dr. Meiners is a professor of health economics and policy at George Mason University. He can be reached at

No: The Cost Is Too High

By Prescott Cole

Buying insurance is basically gambling. You calculate the costs, risks and benefits—and hope that you come out ahead. In the game of long-term-care insurance, however, you are playing with a stacked deck.

PRESCOTT COLE: 'Instead of buying a policy and paying premiums, the consumer could set aside savings.' ENLARGE

The industry touts scary statistics about the probability of ending life in a nursing home. It's not uncommon to see ads claiming "50% of all seniors will go into a nursing home," or "the average stay is two and a half years."


Long-term-care insurance does not compare favorably with other insurance products. Using a cost-risk-benefit analysis reveals an "inverted formula": With long-term-care insurance the costs are high, the risks are low, and the benefits are low, but with, for instance, fire insurance the costs are low, the risks are low and the benefits are high.

Homeowners-insurance premiums run from $300 to $1,000 per year, whereas long-term-care insurance averages $3,500. Compare the fact that you can insure a half-million-dollar home annually for less than $800 with what you get for $3,500 in long-term-care insurance premiums and you will see that clearly the latter is not a good deal.

The 90-Day Rule

Another important point: Most long-term-care policies don't pay anything until the person has been in a nursing home for more than 90 days. If more than two-thirds of those going into nursing homes leave before 90 days are up, it is unlikely that most consumers will receive any benefits at all.


Proponents argue that having a longer exclusionary period helps the insurers offer lower premiums. Another way to look at it is the lower premiums reflect the companies' view that their liability is reduced and that payouts are less likely on those policies. It doesn't matter if the policy costs less if you can't use it.

Does that mean long-term-care insurance is unsuitable for everybody? To some extent, it depends on their personal wealth.




Admittedly, if a stay in a nursing home exceeds the set-aside savings, they will be worse off than if they had long-term-care insurance. On the other hand, if their stay doesn't exhaust their savings, they will have kept their money and done better than if they had insurance. It's a risk either way.

Unprofitable Partnerships

Some proponents tout Partnership Policies as a good solution for mid-wealth consumers, because they allow purchasers to retain more than the usual amount of savings and still qualify for Medicaid to pay their long-term-care costs. But before buying one of these policies, consumers need to ask two basic questions, "How long do I need to be in a nursing home before I can qualify for Medicaid?" and "Do I really want to end up on Medicaid?"

Indeed, getting onto Medicaid may be a phantom value. Even if a Partnership Policy holder were to survive in a nursing home long enough to shield their assets, would he or she really want to give up their private room to spend their remaining days in a Medicaid ward?

Buying any insurance can be considered a gamble. But with long-term-care policies, the high cost and the low probability of qualifying for benefits add up to a losing bet for most consumers.

Mr. Cole is a senior staff attorney at California Advocates for Nursing Home Reform. He can be reached at

Aaron Skloff
Aaron Skloff subscriber

We recently published an article on the pros and cons of long term care insurance.  We addressed some common myths and facts; and provided an example of premiums and benefits.

Pros And Cons of Long Term Care Insurance

Aaron Skloff, AIF, CFA, MBA

CEO - Skloff Financial Group

Aaron Skloff
Aaron Skloff subscriber

You have homeowners insurance even though there is only a 1 in 1,200 chance your home will burn down.

You have automobile insurance even though there is only a 1 in 340 chance you will have of a major accident.

You purchase Long Term Care Insurance because there is a 7 in 10 chance you will need long term care if you live past 65, and you don’t want to be a burden to your family.

The average length of care is 3 years (mostly home care), according to the U.S. Department of Health and Human Services. 

Combination Life and Long Term Care Insurance policies provide tax free, guaranteed benefits with guaranteed rates (your rates can never be increased).

Visit our Education Center here:

Aaron Skloff, AIF, CFA, MBA

CEO - Skloff Financial Group

Roger Brown
Roger Brown subscriber

Revisited this article prompted by CNA notice of LTHC annual cost increase for 2015 of 20 percent to $2,010 per person, two persons, on a policy held for 15 years. My concern isn't the 20 percent this year but the increases in coming years.  The likely impact to the insurance pool is opt out for many causing higher and higher premiums.  No good solution this time. 

Paul Dave
Paul Dave user

Great article. Thanks for the info, you made it easy to understand. BTW, if anyone needs to read more about long term care insurance, I found a good read in this link that you might find useful. This site PDFfiller also has some Long-Term Care Insurance forms template that you can fill out. 

Alicia Smith-Richardson
Alicia Smith-Richardson user

To ask if one would need a long-term care insurance is just beyond comprehension. The gravity and importance it plays in retirement is often underestimated that most people would simply kick the idea even before someone suggests it. As the article states, it is better, even best for the lack of superlative impression, that we approach the future prepared, equipped with a insurance policy rather than just wait for the future's better days. There people who simply do no comprehend the idea that the cost for long term care is rising and will continue to do so in the future. (SOURCE:

Aaron Skloff
Aaron Skloff subscriber

Given the low interest rate environment, Long Term Care Insurance companies are beginning to charge more to compensate for lower investment returns on their bond portfolios (note: insurance companies invest policy premiums in bond portfolios).

One of the largest Long Term Care Insurance companies announced it will be introducing a new version of its policy in late June or July 2014.The company will use more conservative return assumptions on its bond portfolios.This is estimated to result in higher prices for the same levels of benefits offered today with the current version of its policy.Furthermore, it is slashing the length of coverage you can purchase from 10 years to 5 years.

On a complimentary basis, let us show you quotations from the top blue chip companies:

Aaron Skloff, AIF, CFA, MBA

CEO - Skloff Financial Group

Sarah Shinault
Sarah Shinault subscriberprofilePrivate

Does anyone have experience, good or bad, with Mutual of Omaha policies?

Todd Chalem
Todd Chalem subscriber

Guess what, OF COURSE insurance, on average, costs more than the benefits. How else would an insurer stay in business? Whether you can or should hedge LTC risk is a worthwhile discussion but do yourself a favor: don't take advice from someone who considers insurance gambling. It is not gambling (that's not an opinion, that's a fact).

Dan Shinnick
Dan Shinnick

Anyone who starts a commentary with "Insurance is gambling..." loses all credibility with me. Insurance is pooling risks, where the insurance company takes advantage of the law of large numbers to protect the individual consumer from the consequences of the law of small numbers. We can argue whether insurance companies charge too much to be the aggregators of risk, but to start your opinion piece with a false premise makes the rest of your opinion suspect...

Michael Liggan
Michael Liggan subscriber

A premium now is not a premium in the future. The insurance providers can and do raise premiums, gaming the risk in a way that customers can't. Also, the potential exists for insurance providers to play the usual game - deny, deny, deny. Maybe eventually they will actually pay but the insured individual is somewhat disadvantaged to argue. Too cynical?

Marietta Gaa Ostrander
Marietta Gaa Ostrander user

You are to sick to be covered by your insurance you should have bought long care insurance so when we dump you, you would have somewhere to go.

N Benedict
N Benedict user

Insurance companies are the biggest scams going. You will never see most of the money you pay into a LTC contract. Although controversial, assisted suicide at the end of life is a better alternative, and mark my words, you will see quite a lot of it in the near future.

Craig Pynn
Craig Pynn subscriber

The LTC insurance salesman basically laughed in my wife's face upon finding out she has multiple sclerosis. No way is she eligible. I have advanced prostate cancer. The end game is usually quite short and most guys like me die at home under the care of hospice. I asked if there was a LTC policy that covers only in-home care without the nursing home component. Answer was no. It's a simple issue of the product purveyor lacking a product that will meet either my wife's or my needs. LTC insurance is among the least creative or flexible products I've ever encountered.

Robert Walker
Robert Walker profilePrivateuser

All insurance is just prepaid risk avoidance with the insurance company taking a MAJOR piece of the pie.

Harlan Hill
Harlan Hill subscriber


Q - Can he tell me where I can get half a million in homeowners insurance for an $800 annual premium??? Not in my state.

GOULD HAGLER subscriber

Mr. Cole's very first sentence indicates he doesn't understand insurance: "Buying insurance is basically gambling."

No, buying insurance is nothing like gambling. It is the opposite of gambling.

When you gamble you create a risk that does not otherwise exist.

When you buy insurance you manage a risk that already exists. It is there whether you do something about it or not.

I did not read the rest of his article. There is no risk that I will miss anything important.

frankn Liwop
frankn Liwop

We all participate in the purchase of long term care whether we like it or not.

It's called TAXES. I'm looking forward to when my government starts giving back to me!

Chris Barriteau
Chris Barriteau subscriber

What's missing from the article is the fact that most insurance companies sell LTC insurance as a rider to some other form of life insurance or annuity product.
The key with LTC insurance is to also purchase some form of a Fix Annuity product, that provides for some form of "gap income" benefit. The attractive thing about that is if you never became severely ill or disabled to need geriatric/ nursing services, you would still received that annuity income as planned.

If however you are in need of nursing services, but the LTC policy is still within the exclusionary period, the annuity payments would provide gap coverage if properly structured. Of course there is also "gap insurance", but to me that's a gimmick to sell people MORE insurance.

By the way, the Fixed Annuity products are probably the best way to "self-insure". Again, if properly structured, it can provide a sufficient level of income to cover the additional cost for elderly-care (be in in-home or assisting living).

Also, some firms like NY Life offer a quasi-Whole Life / Annuity product (trade name is "Custom Whole Life"), that will allow for "whole life" coverage, but will payout benefits at a predefined "attain age". the Insured will select the age they would want the Annuity to begin. The other benefit is that in case of unfortunate death, it will pay a death-benefit to the beneficiary as customary (even if death is premature). This is probably the best INVESTMENT product out there for the CONSERVATIVE portion of your portfolio - why? Because it pays out a fully "non-taxable" annuity (for LIFE)... check with your Financial Advisor (if they're very good, they will know this product)

i must say given the rising cost of care, I would suggest that everyone should secure some form of LTC ins or put in place a fixed annuity that could mitigate the certain cost of elderly care. Please please don't put 100% the burden on your love ones if you still have time...

Anne Cramer
Anne Cramer

The author of the "con" statement says this: "Compare the fact that you can insure a half-million-dollar home annually for less than $800 with what you get for $3,500 in long-term-care insurance premiums and you will see that clearly the latter is not a good deal." What a ridiculous statement---he clearly understands nothing about statistics. Whether it is a good deal or not depends on how many homeowners collect anything and how much, and how many long term care insurance buyers collect. This guy should stay away fro anything involving math.

Robert Post
Robert Post subscriber

As you contemplate this for your own personal situation, just consider that if the Insurance Company is selling it, its so they can make money off of you .. most likely its not going to work out profitably for you

Robert Stewart
Robert Stewart subscriber

This debate assumes everyone would opt for long term care if cost is not an issue. Really? What quality of life exists being entirely dependent on others to perform the most basic biological functions? When I'm no longer able to squeeze my own Charmin, I'll be loading the .45.

William Moss
William Moss subscriber

Wish I could recall where I read this but memory [still decent] was that only about 2-4 percent of people who have purchased LTC insurance actually use it for a period greater than one year; that is, truly benefit. And, something like 15 - 20 percent of people who had purchased LTC insurance use it for a period of roughly between 6 and 12 months. We cancelled ours because it did become way too expensive; started out in the mid-90's for a few hundred a year and was at just over 4K when we cancelled last year.

Chris Andresen
Chris Andresen subscriber

From a family viewpoint, I have been wrestling with this issue for about a year now. My father died one year ago leaving my older mother unable to completely care for herself; enter assisted living. My parents had taken out policies for each other with two separate long-term care companies. The exclusion for these policies was 120 days.

Fortunately, my mother had enough liquid cash to deal with the shortfall. Yet, the battle with getting the long-term care companies to pay took me nine months to reconcile for one, and never for the other. It all revolves around the level of care required and the criteria your policy lays out. If the type of care does not rigidly meet their standards, the company will not pay; despite what their salesmen pitch.

For one policy, having help dressing and bathing was sufficient to meet their certification of need. For the other policy my mother would have to require someone to feed her, and a host of other care needs in order to qualify. Needless to say, she did not qualify; and after seven months of calls, e-mails, letters, and interviews, the company denied my mother's claim. Now, all she has is the first policy, which has a terminal payout of 3 years. After this, I don't know what she will do other than to deplete her savings, and then find a facility that will accept Medicare, and many do not accept Medicare.

So, would having a long-term care policy pay; maybe. But, you would be well advised to find out the particulars before you shell out the $3,000 per year my mother has been spending for her premiums; not to mention all the years my dad paid in and never collected a dime because he died before he could collect. As the article stated, the money would have been better spent in an investment, which my mother could have been using now.

Lorri Badolato
Lorri Badolato

One aspect of these policies that is being ignored in the debate is that of home care benefits of LTC policiesl. Given that more people will live longer than ever before and need in-home help rather than nursing home admission, one cannot ignore the in-home care benefit. To assume that an adult child can take an elderly or disabled parent into their home and afford to either stay home and provide that care, or pay for outside help, is problematic. Having just dealt with having two elderly people at home (for 5 years) in need of assistance with tasks of daily living, having long term care insurance payments would have gone a long way toward providing the full extent of the care that my household could have benefited from. And for me, I don't have any kids to impose on, so that option is a nonstater. With regard to the cost comparison to property or car insurance, one has to keep in mind that there are far more participants in property or car insurance than in LTC insurance so of course the premiums will be lower than for LTC insurance - the risk is spread across more participants. Bottom line, sit down with a fee-only financial planner and do the anaylsis. Buy if it makes sense, don't if it doesn't.

Alonzo Quijana
Alonzo Quijana subscriber

I remember from statistics class years ago the principle that people almost always overestimate the likelihood of an unlikely but dramatic events (winning the lottery, dying in a plane crash or by terrorism, getting struck by lightning). Casinos and lotteries use that proclivity to their advantage in their marketing. I wonder if that is the case with LT Care marketing?

Given Medicaid there is zero probability that a dementia patient -- or any LT disabled person -- will be kicked out onto the streets. The worst that could happen is that he or she spends down all their assets (and leaves the kids without an inheritance) and ends up in a "just OK" nursing home for a year or two until death.

Alonzo Quijana
Alonzo Quijana subscriber

This is anecdotal, but in my extended family, the people who go into LT care rarely last a year, and are far from spending down to Medicaid-level poverty.

Brian Flanagan
Brian Flanagan

Not mentioned by either of the writers of this article is the industry's history of going to state regulators with massive premium increases for existing policyholders. Underpricing policies in the early days of the industry drove many of the legitimate companies out , leaving many sleazy players in command. They would then go to state regulators, hat in hand, crying the need for massive premium increases. They would get it, and people who couldn't afford it would have to let their policies lapse. It was actually a business model. Genworth is now looking for rate increases because people stubbornly refuse to give up their policies. "We priced these policies expecting to have a larger number of them lapse," says Beth Ludden, senior vice-president of product development for Genworth. "More people are claiming benefits than we had anticipated." Caveat emptor.

PETER BROOKS subscriber

For those who enter nursing homes due to dementia, the length of stay is rarely "long term". There are no effective drugs to treat dementia, only drugs that overwhelm a person to make them docile while the lethal side effects slowly kill them ( one of the best kept secrets by nursing homes and their affiliated doctors). Maybe that's the merciful thing for all concerned, but also a common reason for shortened nursing home habitation. Something to consider when deciding on long term care insurance duration.

John Williams
John Williams subscriber

If you are wealthy LTC is not necessary in my opinion. From what I hear the average person spends 3 1/2 years in a nursing home. The decision to buy LTC seems to be very personal based on individual circumstances.

Aubrey Morrow
Aubrey Morrow subscriber

I'm a financial planner in San 2000, I recommended a long-term health policy for my client who was age 74 at the time. He has been in a resort- type skilled nursing facility with a private room for the past 6 years and is now 89 and still in good health. As I type this, I’m looking at a statement from Transamerica the company we chose. The policy has paid out $529,973.91 so far in benefits at a rate of over $22,000 per quarter.

Gregory Pavlov
Gregory Pavlov subscriber

Whether or not the insurance company will be around and whether or not you will be able to collect from it even if it is are two risk factors to weigh, especially if you're looking out 15-20 years or so. Another is technology: while medical care costs will go up, long-term care costs may end up being controlled or in some cases even reduced with robotics and other approaches that should reduce people costs. There is a heck of a lot going on in this area behind the scenes that will start to pop up on the market in the next 3-4 years.

Greg San
Greg San user

Seriously Mr. Cole??? Your statements are completely ignorant of risk. How can you compare LTC insurance to home owner insurance prices? Last I checked, your house did not have a 50/50 chance of burning down. If it did, home owner insurance would be unaffordable by your standards.

Moreover, people don't even save enough for retirement, you really expect them to save over $1 million per person for LTC claims 20 years from now? Those are the magnitude of expenses we are talking about here. By your own calculations, after 20 years of savings, someone would only be able to accrue $$70,000 which is less than what care costs for 1 year today. The annual cost is $91,000 today and expected to be $240,000 20 years from now.

The analysis from this guy is ignorant of math and completely irresponsible.


My dad bought long-term care insurance for my mom and she kept up payments after his death. My dad had investigated the insurance company from which he purchased the insurance and they were sound. However, they were bought by a not-so-sound company. When she needed it, insurance company balked until I threatened to take it to our State Insurance Commissioner (GA). Shortly after they paid off, the company went belly up. All-in-all, we got back about what we had paid in, but I would never do it again.

thomas g singley
thomas g singley subscriberprofilePrivate

Has anyone ever tried to collect on one of these LT policies? Just anecdotal, of course, but three of my friends/family members found that the insurance began to quibble over definitions of "disabled" and had to finally engage a lawyer to get them to even respond. I should imagine that this would be a fertile area for a good investigative journalist to explore. The point is that after paying premiums for years, the policies don't pay and at a time when you may not be able to deal with it.

Darrick Wilkins
Darrick Wilkins user

Updated. The largest Long Term Care Insurance company by sales and claims paid, just announced they are moving to gender based underwriting. This is a big deal for woman. Woman make up about 70% of the claims so you can bet they will be paying much higher costs once this change hits. Whisper numbers are around 40% higher premiums for woman... but nothing official yet. This change may sound harsh, but insurance companies have been doing this type of thing for years. 16 year old boys pay more for auto insurance, etc.

We are LTC Tree and sell more of this than anyone, just "virtually". That means no sales presentations and we'll mail you the info.

Check us out at

Darrick Wilkins
CEO of

Darrick Wilkins
Darrick Wilkins user

The title of this article "Should you buy Long Term Care Insurance", is a common question we get here at LTC Tree. The answer can go both ways and really depends on if you have a "Nest-Egg" to protect. If you don't have 50k+ then you probably don't need to bother buying it. However, if you do have assets of $50,000 or more, and have seen family members need care, it might be worth a look.

At LTC Tree we know this is not an exciting topic so we designed and built an animated video found here at YouTube.

We hope our new Long Term Care Insurance video helps you!

Darrick Wilkins
Founder and co-CEO

Darrick Wilkins
Darrick Wilkins user

If you are thinking of buying Long Term Care Insurance, I just heard from one of the major players that they are making some changes and increasing the cost. I won't mention the name of the company but they are one of the top five and they announced they are essentially raising cost by about 20%. They are also eliminating the unlimited benefit period and a few other features. The bottom line is this type of insurance changing and to insure you're getting the best deal you must look at least the top six companies.

Our company is LTC Tree and we help clients in all 50 States shop the market to get the best plan at the best price. We do this with NO sales agents coming out to your house. If you'd like to learn more about our unique process visit our site at:

Darrick Wilkins
co-CEO of LTC Tree

Becky Brignac
Becky Brignac

I just bought a policy last year,2 years before I turned 60. I put it off a few years. Down here in Texas, it isn't nearly as expensive. Policies vary in coverage based on how much you will need or want. Higher standards of living, that is, living high on the hog or up North in New York or or the west and east coasts, you may need more money. As a single person, I have no one to take care of me if I should need round the clock care. Who can predict a stroke? I know a woman who had a stroke and had to rehabilitate for a year. Now she is doing fine. I don't take many risks. Young people, like Christopher Reeve and the young woman who was in the hospital for about 20 years who made news in 2008 needed a policy. And, with LTC, you don't have to totally deplete your savings, as with Medicare. It wouldn't hurt to discuss this with Genworth.

Sandy Harris
Sandy Harris

While it is true Long Term Care insurance (LTCi) isn’t for everyone, the tragedy in this story is that people that have no idea what they are talking about comment on subjects of which they have no knowledge.

When people want advice, they go to an attorney or their religious leader. When they want accuracy in their taxes or other accounting areas, they talk to accountants. And, when they want certain guarantees for their lives, like a guaranteed income for life, or to be able to make sure they can rebuild their house in case it burns down, they talk to an insurance agent.

Just because someone graduated law school and supposedly appears to have something to do with the subject of LTCi because of some board he works with, is by no means any kind of guarantee he has any idea of what LTCi is about.

To begin with, CALIFORNIA was one of the 4 original states to have a Partnership program, along with Connecticut, Indiana and New York. These original 4 stand alone. There are over 30 other states that have formed a national partnership and interact with each other.

There is no question that I could spout all kinds of scary statistics about who will possibly need LTCi and under what conditions. But rather than do that let me say what is does in general and correct complete falsehoods as stated.

First, there is no requirement that someone has to wait 90 days before a policy pays. Perhaps your confusion is that a doctor has to certify that you will need these services for a minimum of 90 days. There are policies that pay on the first day of qualification. There is no requirement that someone only gets coverage in a nursing home….ever hear of home care, or an adult day care center or an assisted living center?

It is true that insurance for fire insurance for a home is relatively inexpensive. Know why? That is because statistically, only 1 in 1200 will burn. As for cars, 1 in 250 people will have an accident. But 2 in 3 over the age of 65 will need some form of Long Term Care in the balance of their lifetime.

Telling people to save instead of buying LTCi, especially in the current economic conditions that have persisted for the last 10 years, is the same as getting advice from a fool! The last group of people that were able to save pennies, and buy homes, and put their children through college, marry off their daughter were the baby boomers. Like building pyramids, we don’t know how to do that anymore!

In 2007 the cost for Long Term Care for an individual exceeded $1 million for the first time in our history. How much do you have to have as an income to save that?

Finally, what LTCi does is help to protect your assets, your loved ones, those funds you’ve worked so hard for your retirement, and your independence. Relying on family to take care of you puts undo pressure on them as well as their finances and their own personal lives.

Talk to the people that know what they are talking about when it comes to something so important as Long Term Care insurance.

Sandy Harris is the President of The Harris Group and has been advising clients for more than 25 years in Long Term Care insurance and retirement income planning. He can be reached at

dee wadsworth
dee wadsworth

From a gerontologist: the problem is LTC insurance has no uniform wording; contracts vary. It's not like life insurance that has uniform contract language. One key point: what are the "triggers" to start benefits and who decides that the "triggers" have been met? Today unfortunately, it's often true that the primary care physician's report takes a back seat to the nurse who evaluates according to the insurance company criteria. Denials happen. Another pitfall: the rates are not locked in. Typically they change every 5 years of age. Just when someone is likely to need the benefits - over age 80- the price becomes prohibitive and the insured person drops the plan.


I was diagnosed in 2002 with MS. At thetime I was only 32 years old. I was shown to have a more aggressive form of it. I continued to work a number of years after but was thrilled when our compay was bought and offered us LTC insurance. For someone like me this is great

Darrick Wilkins
Darrick Wilkins user

LTC Tree here again and we are the thought leader in this space. We strive to give to the NONE salesperson approach and if we lose deals because we speak the truth, we don't care because we know our clients made the choice not to buy with accurate info.

One more point I'd like to make is the statistics you hear from agents' comments in this blog and in articles on the topic in general are a bit inflated in my opinion. Those stats that are designed to scare people into acting fast and are somewhat disingenuous.

Think about this, a common stat you'll hear from agents is that people 65 and older have a 50% chance of needing care. Pretty bleak right? Think again, that stat is of the general population, and included in that sample are people who might have a laundry list of ailments such as Diabetes, Cancer, 5'5" 297lbs etc. Those people are more likely to file claims because of their poor health. But guess what? Those less healthy people more than likely CAN'T qualify for a policy and will be filtered out by the underwriters. The stat should be of those people healthy enough to qualify for a Long Term Care policy have a ______ % chance of needing care. I don't know what the true number is and have never seen it in my 14 years.

If you are reading this article there is a good chance that you have good health. Of people who have good health like you, and are healthy enough to be approved for a Long Term Care Insurance policy, the odds that the healthy subset of people 65+ will need care is NOT 50%.

I know as an agent I'm kicking the hornet's nest with some but a fact is a fact. Do I believe if you have 100k+ it's wise to buy LTCI, absolutely. It's a smart business decision but Long Term Care Insurance needs to be sold with accurate facts. If you tell people the truth and don't hype the risk up they still will buy. They will buy an LTC policy because although the risk is not 50% chance that they will need care, the risk still is greater than the chance a person's house will burn down and most all have home owners insurance.

Long Term Care Insurance is an excellent retirement planning tool for those who understand the true risk and have assets and or a lifestyle to protect. If you like our no-nonsense approach check us out at the link below.

Michael Yeley
Michael Yeley

Mr. Cole is dangerously uninformed and flatly wrong on so many counts; let me enumerate a couple, beginning with his 90-day rule. 80% of long term care takes place in the home; 10% in assisted living and only 10% in nursing homes. Thus, the 90-day stay in a nursing home figure seldom applies, not to mention that a nursing home is seldom the first paid experience for LTC; it's typically at the end of a continuum of services. Next point: the 90-day elimination period is the most popular choice of several choices, each with different costs. There are also options to waive it. Most other points have been handled nicely in the comments, leaving me only to ask WSJ where they found this yahoo and how much they paid him for these comments.

David Cotie
David Cotie

People like Prescott Cole I’ll never understand. Likening insurance to gambling? Is this guy for real? Another attorney who thinks because he has a law degree he is an expert on all subject matter known to Mankind. No Prescott, insurance is not gambling, it’s about the transfer of the risk of loss.

Prescott, I would love for you to hear some of the calls I receive from panicked sons and daughters who have an infirm parent (most likely approached several times about LTC and advised by people like you that they didn’t need it) who are now scrambling to figure out how to pay for the cost of their parents care. I get calls many times a year from people or thier spouses of those who are now uninsurable (been diagnosed with early stage Alzheimer’s or Parkinson’s) and wanting to buy LTC and I have to tell them they would not qualify at this point. You don’t by LTC for yourself! You buy it for the people who are going to be burdened with your care that you’ll leave behind. You buy it to have the control of where and how you will get care.

Prescott, stick to what you know and leave insurance counseling to professionals who are licensed and trained to keep their clients best interests at heart. Your “advice” is as irresponsible as it is misguided.

JJ Rusch
JJ Rusch

Dear Mr. Cole,

I find most people who speak aggressively against LTC usually haven't had family members in long term nursing care to begin with. In my family, my great aunt lived for over 30 years in nursing care, one of my grandmothers, for 15 years, the other grandmother, for 6 months and my parents, (yes, both, are there at the same time) will be celebrating two years of said incarceration at the end of this month.

90 Days is not the issue here - it is about caring for elders who require ongoing higher levels of care - not rehab. (For those of you who don't know, short term (90 days or less) rehab is big business for nursing homes; it is their best way of charging for and receiving full payment for services rendered through Medicare vs. Medicaid.)

I will also risk guessing you have never had the honor of committing a loved one to nursing care, nor liquidating their assets, nor filing for Medicaid on their behalf to insure they'd be taken care of once their assets were gone. It is a journey no adult child should have to travel...long term care planning is also a family issue.

Ironically, my husband (a financial planner) and myself urged my parents to purchase LTC, but my mother's fears of cost stood in the way. If she had the clarity to see how all this played out, I know she would be devastated - she never wanted to be a burden nor end up in a nursing home - it tears my heart out.

I can so appreciate the gentleman who commented about his wife's illness and how thankful he is they have long term care coverage for her at home. LTC is not just about nursing homes, it is also about helping us age gracefully and staying in our homes. While your stats seem to indicate not a lot of people will end up in nursing homes, (potentially under estimated) how many will need help?

In a society of people living longer and public funding running shorter, all options are viable. Yes, LTC isn't cheap, but neither is nursing and skilled care. As Mr. Meiners pointed out, "...what about consumers with midlevel savings—in other words, most people? These consumers need long-term-care insurance the most. They tend to have too little savings to pay for even a couple of years of care without impoverishing themselves and their families, and too much to qualify for Medicaid."

I have watched my parents slip from middle class to Medicaid status in the blink of an eye - a mere fraction of their lifespan and life's work. My mom would be the first tell you, it wasn't worth saving $3,500 a year over...if she could.

Jackson Browning
Jackson Browning profilePrivateuser

Aren't the companies backed by insurance? That is my understanding. I am not being sarcastic. Perhaps not fully informed, however.

Jonathan Seder
Jonathan Seder user

Cole's analysis was excellent, and you don't treat it fairly. He (very conservatively) said that if you save $3500/year for 20 years, you'd have $70,000 "plus interest." But at a 5% rate of return (not crazy by historical standards), you would have $115,731. Personally, given the choice between $115,731 in the bank or a long-term policy capped at $240,000 with a 90-day deductible (which means I'd probably get nothing), I'd take the $115,731.

One thing the article didn't mention is that if you have a high-deductible HSA-qualified health insurance policy, you can fund a Health Savings Account with tax-deductible dollars, let it accumulate tax-free, and then use it for long-term care or other medical expenses late in your life - without ever paying any taxes on the money. If that's available to you, it's almost certainly favored over long-term care insurance.

ALAN LANCTOT subscriber

Read your policy carefully, it doesn't provide eternal coverage.....there's a cap....

Jackson Browning
Jackson Browning profilePrivateuser

There is another factor. First, I want to be clear that I agree with you. I also cared for a parent who did not have LTC insurance but did have enough assets to have partial help as well as significant help from me to minimize costs and also so I could have assurance that she had excellent care. But it is also vital to find a way to preserve parents' dignity while supervising finances. While there are exceptions, numerous studies indicate those 70 and older begin to make unwise financial choices but how many trust others to assist them? By 80 and 90 those vulnerable to scams is high.Proving incompetence is difficult and I could not bring myself to do so. Luckily, my parents recognized their inability to track finances and let me step in, preserving their standard of living. .

GOULD HAGLER subscriber

You are overlooking a key factor: the possibility that you will have a need for long term well before you have accumulated the savings necessary to pay for it.

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