Photo: Brian Bowen Smith

According to the Department of Health and Human Services, at least 70 percent of people over 65 will eventually need long-term care, either at home or in a nursing home, and that can be very expensive. The average stay for a woman entering a nursing home is almost four years; if she's in a semiprivate room, that costs about $270,000 total. A health insurance policy will not cover this kind of care, and Medicare offers very limited coverage. That's why you should consider long-term-care insurance if you won't have ample retirement savings or other assets you could tap if needed. If you have long-term-care insurance and must enter a nursing home at some point, the total cost of all your premium payments combined will almost certainly be less than the cost of a single year in the home—no matter how many years you've been paying premiums. Learn more at LongtermCare.gov. If you want to pursue this coverage, work with an agent who specializes in it, and follow these rules:

• Buy only what is affordable. Do not stretch to buy a policy that covers 100 percent of anticipated future costs. It is far smarter to buy the amount of coverage for which you are sure you can keep making the premium payments. It makes no sense to buy a policy today that you will have to abandon in a few years because it is too expensive; you will get no benefit if that happens. Focus on what is safely achievable: Better to buy a policy that will cover 25 to 50 percent of future costs than no policy at all.

• Insist on an inflation adjustment. The cost of care rises each year; you need a policy whose benefit will also increase. Given the above-average inflation rate for health services, look for a 5 percent annual inflation adjustment.

• Aim for the shortest possible elimination period. This is the time before your policy kicks in; for example, if you have a 30-day elimination period, you'd pay for your first 30 days of care out of pocket. The shorter your elimination period (30 days is a typical minimum), the pricier the policy. If it's 90 days or longer, make sure you have other assets that you could use to pay for your care for that length of time. —S.O.

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