Dear Savvy Senior, My friend has been telling me that I should look into buying long-term care insurance so I don’t loose everything if I have to go into a nursing home. I want my savings and house to go to my kids, not to some nursing home, but I understand long-term care insurance is very expensive. Is it better to pay now or pay later’ Can you tell me what long-term care insurance covers, what it costs, if I really need it, and by the way, what does a nursing home charge these days’ Thanks for your advice. Long Term Indecision Dear Long Term, Good questions! According to the National Association of Insurance Commissioners, long-term care insurance is not necessarily for everyone. However, a some statistics indicates that at age 65, a woman has 52 percent chance of spending some time in a nursing home, while a man has a 35 percent chance. The Bottom Line: Insurance is a gamble. You just never know! Nursing home cost’ Cost these days can range between – WOW – $30,000 to $80,000 per year, depending on the state you live in and the facility you go to. However, the national average cost is approximately $105.00 per day (over $38,000 per year). Assisted living ranges anywhere from $50 – $90 per day. Long-term care insurance helps pay for: Care in a nursing home. Assisted living services such as meals, health monitoring, and help with daily activities, provided in a special residential setting other than your own home. Help in your home with daily activities like bathing and dressing. Community programs, such as adult day care. Note: Long-term care insurance is usually NOT covered by employer health insurance nor Medicare or Medigap policies in any significant way. (Medicare will pay for short-term, skilled care.) Medicaid does pay for long-term care, but you have to use most of your savings or other assets before you can receive benefits. Should you buy long-term care insurance’ Several things to consider: Your goals should be to protect your assets, minimize dependence on other family members, and control where and how you receive long-term care services. Long-term care insurance can be expensive, particularly for older people. Learn as much as you can, and consider your individual circumstances. Be wary of buying if paying for the premiums means lowering your standard of living or giving up other things you need. Keep in mind that you will probably be paying premiums for a number of years. Will you still be able to afford the policy if your circumstances change or if premiums increase’ If you would quickly qualify for Medicaid if you needed long-term care, a long-term policy would not make sense for you. How much does it cost’ Long-term care insurance is expensive. Costs vary widely, based on your age at the time you apply and the options you choose. The Health Insurance Association of America provides the following estimates for a policy that provides $100 a day for nursing home care with four years of coverage, and five percent inflation protection. Age 50 – less than $888 a year. Age 65 – less than $1,850 a year. Age 75 – less than $5,880 a year. Note: Cost for these services will be much higher in 15 years, when most policies will be used. These are averages based on (1997-98) data. When should you buy’ The older you are, the greater your chances of one day needing long-term care services. Therefore, the older you are at the time you buy long-term care insurance, the higher your premiums will be. If you buy when you are younger, premiums will be lower. However, you will be paying them for a longer period of time. Savvy Tip: A good time to buy a policy is when you’re between the ages of 50 and 55, before prices skyrocket and/or your health declines. Savvy Resources: For the program nearest you, call the Eldercare Locator, 1-800-677-1116. Health Insurance Association of America (HIAA): Offers a variety of useful information on its web site at www.hiaa.org.