Lets Talk Money Online - Long-term care costs can grow and grow

If you think that long-term care costs don't amount to much, recent research conducted by the American Association for Long-Term Care Insurance (AALTCI) might change your mind. According to the association, which represents the long-term care insurance industry, insurers paid out $8.5 billion in benefits to more than 180,000 people in 2008.

Self-funding -- or paying for long-term care costs -- may be an option for people of means, but for some included in this survey it's almost certain that they would have benefited from insuring against these costs. AALTCI cited one person who purchased long-term care insurance at age 43. After paying premiums for three years, her claim began and continued through June of 2008 -- or 12 years. A total of more than $1.2 million in claims has been paid on behalf of this one person.*

Another claim lasted nine years through June 2008 and paid more than $1 million in benefits. The woman has been in a nursing home during that time. While this claim occurred after age 70, one in ten claims of the 180,000-plus began before age 70, illustrating that even younger people can require long-term care.*

Granted, the two cases previously cited are extraordinary, but longer lives and medical advances point logically toward more need for long-term care. How will you pay for care if the need arises?

If you have substantial means, you might pay out of pocket. You also could use money that was meant for other needs.

However, insurance continues to serve as a cost-efficient way to fund potential long-term care. You can buy a long-term care insurance policy that is loaded with features or stripped down to provide basic protection. Save money, for example, by choosing to extend your elimination period to help save premium dollars.

What's clear is that long-term care can cost a lot. Understand your potential costs to help protect against financial consequences.

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