What is long-term care?

Long-term care includes any services that help people with a chronic or disabling condition deal with both medical and non-medical needs. Care can range from in-home help with things like bathing and dressing (which are known as "activities of daily living" or ADLs) to full-blown nursing home care.

How likely am I to need it?

According to the U.S. Department of Health and Human Services, about 70 percent of people over age 65 will require some kind of care service-but care isn't limited to retirees.¹ A 2008 study by a major provider of long-term care insurance showed that 46 percent of its claimants were under age 65 at the time of disability.² And even if you are still able to live in your home and have the help of a family member or friend, you might still have care needs that require outside assistance.

How much does long-term care cost?

At one end of the spectrum is in-home care, which currently averages $19 an hour for non-medical care and $38 an hour for skilled care.³ At the other is a private room in a nursing home, which can cost nearly $80,000 a year.⁴ With an average length of nursing home stay of over two years,⁵ you could be looking at a very hefty price tag-and that's at current rates.

Won't other forms of coverage take care of these costs?

You might assume that long-term care costs will be covered by other resources. Quite simply: They might not be, or at least not at the level you might expect. Health insurance covers acute medical care, disability insurance replaces lost wages, Medicare is for short-term recovery care, and Medicaid provides assistance only if you have limited assets and qualify under federal income requirements. Plus, if you're relying on Medicare or Medicaid, you'll have to choose from their list of providers and can be moved at their discretion, neither will cover assisted living, and home health care coverage is very limited.

What are the advantages of long-term care insurance?

Asset protection, control, and peace of mind are top benefits. Long-term care coverage helps you get the care you need with the goal of protecting your hard-earned assets. You'll be able to choose how and where you receive your care. And you'll receive the help you need, which helps you not be a burden to your family members or friends.

Who's a good candidate for long-term care insurance?

"There are a number of factors that should come into play when deciding if this product is right for you," said Vincent J. Russo, a nationally recognized authority on the subject who is a founding member, fellow, and former president of the National Academy of Elder Law Attorneys.

Can't I just buy it if I need it?

Unfortunately, you may not be able to get the coverage you need at that point. Many policies won't cover pre-existing conditions or make coverage prohibitively expensive. According to Russo, the best time to buy this type of insurance is between the ages of 49 and 65 for most people.

How do I choose a provider and a policy?

Long-term care insurance is, frankly, a pretty complicated product. You'll need to consider everything from the long-term financial stability of the provider to the coverage elements that make sense for you. The CUNA Mutual Insurance Society representative that services your credit union can help you determine what kind of coverage is right for you. Call toll-free 800-356-2644 X1526 or go online to the Long Term Care Insurance Web site.

¹ National Clearinghouse for Long Term Care, U.S. Department of Health and Human Services, www.longtermcare.gov, November 19, 2008.
² UnumProvident Landscape of Long-Term Care, 2008.
³ Genworth Financial 2008 Cost of Care Survey
⁴ TThe MetLife Market Survey of Nursing Home & Assisted Living Costs, says that the annual cost for a private room in 2011 is $87,235 or $230 daily.
⁵ The MetLife Market Survey of Nursing Home & Assisted Living Costs, October 2009