Paying for long-term care

Editor's note: We recently fielded an inquiry from a member of the media who wanted to know how couples can pay for long-term care. Dan Danford had a terrific response that addresses this very common question, and I thought it would be helpful to share it with everyone here. Of course, if you have more questions, let us know in the comments section.

We do quite a bit with retired clients, and this is a common query. My initial response is that the fear is greater than the threat. Most people worry about these costs, but that's because we focus on the horror stories we hear. In truth, the average stay in a nursing home is less than six months, and I've rarely encountered clients who exhausted all their resources. In fairness, though, our clients are more prosperous than most Americans, but experience tells me that they are the group that worries the most about it, too.

Long Term Care insurance can be purchased with many options and most will cover some home care. But policies differ a lot from company to company and the terms are very important. There are elimination periods and daily rate caps, and even lifetime benefit caps. Some promise a return of premium, if unused, and others toss in some life insurance. This is a very complex product and I recommend great care in buying one. For comparison's sake, I suggest buyers visit the AARP website for explanations and price quotes. You might choose to buy through a local agent, but an quote through AARP is a nice baseline for comparing. Policies cost a lot more as you age, so many advisors recommend purchasing in the 50s.

I am licensed in Missouri for health and life insurance although I've never sold a single policy! I keep my license current so I can evaluate existing policies for clients and the continuing education keeps me current on products and trends.