Do you need long-term care insurance?

Long-term care insurance protects your savings from the high cost of care. But it isn't right for everyone, and buying a policy you can't comfortably afford for the long run can do more harm than good. Here's how to think it through.

It may make sense if…

• You have savings and assets you'd like to protect rather than spend down on care.
• You want to stay independent of government aid and avoid leaning on family for care.
• You can comfortably afford the premium now and expect to keep affording it for the rest of your life.
• You're relatively healthy today — good health is what makes coverage available and affordable.

It may not fit if…

• Your main income is Social Security or Supplemental Security Income (SSI) — the premium may be out of reach, and you may already qualify for other help.
• Paying the premium would mean skipping other important bills.
• You have few assets to protect, so spending down to Medicaid may be your plan anyway.

Health and timing matter

Long-term care insurance is medically underwritten. If you already have a condition likely to lead to care — for example, Alzheimer's or Parkinson's disease — you probably won't be able to buy a traditional policy. That's why people tend to apply in their 50s or early 60s, while they're healthier and premiums are lower. Underwriting standards exist to keep coverage affordable; without them, most people would wait until they needed care to buy.

Get help deciding

Some states require the insurance company and agent to walk you through a suitability worksheet — it looks at the premium alongside your income, savings, and investments to help you decide. Even where it isn't required, working through those numbers with a family member or a licensed professional is worth the time. The National Association of Insurance Commissioners (NAIC) publishes consumer guidance on shopping for a policy, including what a suitability review covers.

If you decide a policy is right for you, confirm that the company and any agent are licensed in your state before you buy.