New Ways to Pay for Long-Term Care

These policies combine life insurance or an annuity with long-term-care protection.

In the aftermath of well-publicized premium hikes for long-term-care insurance and the departure of some key insurers from the market, many consumers are skittish about buying coverage. But the need for protection isn’t going away. The median cost of one year in a private room at a nursing home topped $77,000 in 2011, according to a recent survey by Genworth, and the cost is increasing at a rate of about 5% per year. Round-the-clock home care runs even more.

If you don’t want to buy -- or can’t qualify for -- standalone long-term-care insurance, here are three other ways to protect your retirement savings from the potentially devastating cost of long-term care. And if you don’t use the benefits for long-term care, the insurance goes toward a death benefit or an annuity.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.