Is long-term care insurance worth the cost?

Just spend ten seconds with 84-year-old Charlayne Phillips and you would never guess that she is worried about growing older. After spending 50 years in her home, she and her 86-year-old husband recently moved to the Brookhaven Retirement Community.

"It's scary. Oh, it's very scary," said Phillips. "It was a very, very difficult decision."

They worked hard and saved money for years, but they never bought long-term care insurance.

"Actually, we put it off a long time," Phillips said. "At the time, we didn't think so much about it but we probably should have."

Long-term care insurance pays for custodial care while health insurance and Medicare do not. However, the premium can cost between $3,000 to $5,000 per year. Even so, we found plenty of Miami Valley residents who said it is worth the high price.

"My husband and I do have long-term care insurance because his parents spent quite a bit of time in a facility," said Fay Samborsky of Centerville.

Kay Wingham of Kettering said also wanted to play it safe because the price of nursing home care keeps going up.

"I gave it some thought after retiring from teaching and decided it would probably be the safe thing to have," Wingham said.

Unfortunately, experts say knowing how much care you will need is a game of probability and genetics. You must consider your life expectancy for example, if Alzheimer's runs in your family.

Thirty-three percent of today's 65-year-olds may never need long-term care and only 20 percent will need it for five years. Experts say women typically need care longer than men.

Bill Wood runs the Financial Services Program at Wright State University. He points out that insurance premiums are rising as is the cost of health care. The average nursing home will cost you $80,000 a year and a round-the-clock home health aid could cost at least $184,000 a year.

"There are a lot of very unfortunate circumstances," said Wood. "It's kind of a double-edged sword. You'd like to not have to use your long-term care insurance money, but on the other hand, you've put a lot of money into the policy and you'd like some benefit back."

We went to consumer expert Clark Howard for his advice.

"You want to buy a policy that will cover five years of care," said Howard, who also recommends buying inflation protection with that long-term care insurance.

"So a benefit that looks great right now maybe 15 or 20 years from now will look absolutely terrible and won't cover much of your cost," Howard said. "You pay more for inflation protection but you have to buy it."