The Long Haul: Part Three

By Tammy Flanagan

August 11, 2006

In the first two parts of this series, we looked at what long-term care involves and assessing your need for insurance to cover it. Now let's look at some of the specific factors involved in purchasing coverage.

Most of the parents of people approaching retirement today didn't have long-term care insurance. Most didn't need it. When family members lived closer together and weren't as busy, they stepped in when Mom got a little forgetful or Granddad needed assistance getting around. But people are living longer now, and there's a big difference between being a little forgetful and needing help with activities of daily living such as eating, using the toilet and bathing. This new kind of long-term care is more than most families have bargained for and more than one person can handle.

One way to prepare for this need is to purchase a long-term care insurance policy while in good health and insurable. This involves understanding the factors that will influence the price. You will want to buy as much insurance as you can afford, since whatever you buy probably will not be enough to cover all of your costs if you need care. The cost of nursing home care ranges from $120 a day in Little Rock, Ark., to $473 a day in Anchorage, Alaska. And it's increasing faster than the rate of inflation. (To check the cost of long-term care in your area, use this calculator.)

Cost Factors

Here are some of the factors in long-term care policies that can have an impact on price.

Federal Plan vs. Others

Should you buy coverage through the Federal Long Term Care Insurance program, or is it worth it to shop the private market for other policies?

Here are some of the benefits of the federal plan:

Other long-term care policies outside the federal plan could offer the following benefits: Unfortunately, not everyone will be eligible for long-term care insurance. Certain illnesses and conditions will result in not being approved for coverage. If this happens, then you must plan for long-term care without the benefit of having insurance to pay for it. Be prepared to spend your savings if necessary to provide for personal care if family members or friends are not available to provide assistance.


To Do Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

By Tammy Flanagan

August 11, 2006