Aging Matters: Discussing long-term care insurance

A look at the options.

This month I discuss decisions my husband and I have made about long-term care insurance (LCTI), and why we made them. Friends advocated not buying LTCI because “investment income should cover the cost.” My husband and I believed that – until we saw what those costs could look like.

For five years, his father lived in a nursing home in Atlanta; the cost (then as now, much less than Washington state) totaled $5,000 monthly, or $300,000. My mother-in-law was in assisted living for three of those five years; her costs were about $3,000 monthly. Ka-ching! Add another $108,000, plus six more years in assisted living in Edmonds, at $4,000 monthly, or $288,000. We realized our nest egg wouldn’t support those kinds of outlays.

My father-in-law’s nursing home stay was at the long end of the usual range, three to five years. We thought prudent risk management suggested we plan for four years of needing care. Then we went to our own insurance company to begin shopping around. Our company doesn’t underwrite LCTI, but gave us several options to research, and information about the kinds of deductibles and coverage options available.

Some financial advisors estimate one out of three of us under 65 will need some kind of care, and half over 65 will need care. We bought care policies with this kind of statistic in mind.

Here’s some of what we opted for:

• $160 daily, to be delivered 90 days after eligibility, defined as needing help with two or more “activities of daily living,” or substantial supervisory assistance due to a cognitive loss

• Daily rate payable regardless of whether care is delivered in a facility or at home

• Four years of coverage

We were recently advised to supplement our policies, because the daily rate for care is rising. The second policy would kick in if/when the first one is exhausted.

We selected one of three insurers who’ve had staying power in this industry: Met Life, John Hancock and Allianz. If you want to know which we picked, let me know.

Whatever you do, be sure to gather information about coverage options. Then decide whether you have the resources to pay the premium and whether it’s worth it to you to manage the downside risk of longevity in that way.

Bobbie Moore is an adult education specialist offering workshops in a variety of eldercare-related issues. For more information, contact her at or (360) 297-2845.