How Much Long Term Care Coverage to Buy?
Most long-term care policies cover the same types of costs, from nursing home stays to home health aides. You have to decide how much coverage you want, both in terms of the dollar amount of your benefits and how many years you want those benefits to last. Buying long-term care insurance is like purchasing a pool of money that you can use for daily coverage (e.g., $200 per day) or monthly coverage (e.g., $6,000 a month).
Importantly, don't buy more coverage than you can afford. Instead, consider reducing the amount of coverage to balance your financial situation with your long-term care needs. Also, recognize that there are different ways to pay for your policy. While some are single-payment-premium policies that you pay in one lump sum, other policies, like traditional long-term care coverage, can be paid for through periodic premium payments. Keep in mind, however, that when you choose periodic premium payments, often your premium payment amount isn’t guaranteed, and it may increase after purchase.
If you're going to spend the money on long-term care insurance, make sure your benefits will be sufficient—and available to support you. Since long-term costs will likely continue their upward climb, you might consider adding inflation protection.
Also, choose an insurance company with a strong track record and solid financial health. You want to make sure the company has the longevity to be around for the long-term, so it can pay your benefits when you need them.