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Long-term care insurance typically covers the cost of:

• Help in your home with daily activities like bathing, dressing, eating and cleaning.
• Community programs such as adult day care.
• Assisted living and Personal Care services that are provided in a special residential setting other than your own home. These services may include meals, health monitoring, and help with daily activities.
• Visiting nurses.
• Care in a nursing home.

The best time to buy a policy is in middle age while you're still healthy. Many people don't think about long-term care until they are in their 70s or 80s and their health begins to fail. At these ages, you may be too high a risk factor for an insurer to cover you, or if you do qualify the premiums may be astronomical.

It depends on your situation. Long-term care insurance is expensive. An individual who's 65 years old and in good health can expect to pay between $2,000 and $3,000 a year for a policy that covers nursing home care and home care with premiums adjusted for inflation. You will need to consider your current assets and income carefully. Discuss this with your financial advisor.

Coverage. Some policies pay only for nursing home care or home care. Some provide a mixture of care options that include nursing homes, assisted living communities and adult day cares. Some will pay for a family member or friend to care for you in your home.

• Daily or Monthly Benefit. This is the amount of money the insurance company will pay for each day or month you are covered by the policy. If the cost of care exceeds your daily or monthly benefit, you will need to pay the difference out of your own pocket.
• Benefit Period. This is the length of time you will receive benefits from your policy. You can choose a benefit period that spans two to six years or for the rest of your life.
• Elimination or Waiting Period. There is a waiting period anywhere from 0 to 100 days. During this time, you must pay for all of your long-term care expenses out of your own pocket.
• Inflation Protection. Make sure your policy includes inflation protection. There are two kinds: the right to add coverage at a later date and automatic coverage increases.

Make sure your long-term policy:

• Clearly explains when you will be eligible for coverage and how your eligibility will be determined.
• Does not require that you spend time in a hospital before receiving benefits.
• Will be renewed as long as you pay the premiums.
• Lets you stop paying premiums once you begin receiving benefits.
• Has one deductible for the life of the policy.
• Automatically covers pre-existing conditions if you disclosed them when you applied.
• Offers choices for inflation protection including an automatic increase in your benefit on an annual basis or a guaranteed right to increase your benefit.
• Allow you to downgrade your coverage if you cannot afford the premiums.
• Includes coverage for dementia.
• Provides at least one year of nursing care and home health coverage.
• Allows the right to cancel the policy for any reason within 30 days of purchase and receive a refund.