Buying Long-Term-Care Coverage for a Parent

It's a smart move. But do it while your parents are still relatively healthy.

A smiling young woman kneels beside a smiling older woman and holds her hands at a health care facility.
(Image credit: Getty Images)

My father is 68, relatively healthy and living alone. He has very little savings and works full-time. He can't afford to buy long-term-care insurance. If something happens to him, it's likely that my family and I will have to help pay for his care. Should I buy long-term-care insurance for him?

Buying the insurance is a smart move: The average cost of a private room in a nursing home tops $90,000 a year, and care in your home can be even more — making it highly unlikely your father could handle the expenses on his own. If he has very little income or savings (see (opens in new tab) for details), he may qualify for Medicaid, but his care options would be limited. Most states cover custodial care (the care needed by Alzheimer's patients and others with long-term-care needs) only in certain Medicaid-eligible nursing homes, although a few have special programs that cover care at home. For more information about Medicaid coverage for custodial care, see Does Insurance Cover Alzheimer's Care?

Long-term-care insurance can help pay for many more care options than Medicaid, including care at home, in an assisted-living facility or in a wider variety of nursing homes. You can cover your father's premiums, but he'll need to sign the application and health care releases himself. The cost will depend on your dad's health and the terms of the policy. A Genworth policy for a relatively healthy 68-year-old man, including a $3,500 monthly benefit, a three-year benefit period, 3% compound inflation protection and a 90-day waiting period, would cost about $3,200 per year, says Mike Ashley, of Senior Benefits Consultants in Prairie Village, Kan. A policy with the same terms that pays $4,000 a month runs about $3,700 a year.

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If you are interested in getting long-term-care coverage for your father, don't wait too long. Long-term care insurers are making it more difficult to qualify for coverage, and Ashley says that most people who are interested in buying a policy for their parents wait until their health is too bad to qualify for coverage.

For more information about long-term care insurance, see Navigate a Course for Long-Term Care and A New Strategy for Paying for Long-Term Care and our Long-Term Care Special Report. For information about coverage options from families who are helping relatives with their long-term care needs, see Planning for Alzheimer's and Alzheimer's: Get Your Finances in Order.

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.