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Long-Term Care Insurance

Medicare and other health care policies do not cover long-term care. According to the American Health Care Association, costs of services provided by a nursing facility can exceed $50,000 a year. Financial planners advise retirees and other individuals who may face high costs for nursing home or in-home long-term care to adopt strategies that will protect their financial assets. Long-term care insurance is becoming increasingly popular as the baby boomer population ages and elders realize the potentially devastating effect of long-term care expenses. (To estimate an individual's long-term care costs, see the Planning Tool offered on the Medicare Web site.

Long-term care policies can vary greatly from one insurer to the next. Policies may include benefits for care in a nursing home, in an assisted living facility, in your home, or in an adult day care center. Some policies may pay for family benefits, such as caregiver training, but do not pay for services provided by family members.

It is important to determine what types of care are covered by a long-term care policy. Policies that limit coverage to care provided in a nursing home will not generally pay for services you receive at home. More flexible policies are available which allow you to use benefits to cover any necessary long-term care in any setting, but these policies usually are more expensive. If you are thinking of buying a policy, ask an experienced eldercare lawyer or financial planner to review the policy with you before you sign. (See Finances for information on finding a financial planner, and Finding Legal Services for information on locating a lawyer.)

To evaluate the pros and cons, you can visit these Web sites:

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