Long Term Care Insurance (LTC) has come a long way.  When it was initially introduced 30 years ago, LTC only provided benefits for nursing home situations.  As long term care has evolved, so have LTC policies.  The best policies today cover not only nursing home care, but also in-home health care and assisted living facilities.

Do you (or your parents) need Long Term Care insurance?  As is usually the case, there is no easy answer and it depends on your personal situation.  For those with a smaller estate and modest retirement income, it generally doesn’t make sense to purchase LTC insurance.  If all of the assets are used for long term care expenses, the state will provide a basic level of care for them.

For those with very large estates, the case can be made that they can “self-insure”, paying long term care costs out of their assets versus through an insurance policy.  Even in these cases though, we are seeing individuals with larger estates purchase LTC insurance to protect their estate and insure against high health care costs later in life.

The mid-range of estates, which we’ll quantify as a net worth in the $500,000 to $1,500,000 range, is typically where you see LTC insurance recommended.  In this case, there are significant assets to protect, but not enough to “self-insure” a lengthy long-term care situation.

Genworth Financial has a great website that shows the cost of long-term care around the country.  Click on this link to see how your home state compares to other states around the country.

(Note:  The state of Alaska checks in with the highest average rate, over $200,000 per year for nursing home care!  My guess is they don’t have a lot of facilities to choose from up there.)