How to Tell if You Need Long-Term Care Insurance

Vincent Barbera, director of financial planning at TGS Financial Advisors, offers a rule of thumb for clients: Those between the ages of 55 and 65 with $500,000 to $1.5 million in assets should consider long-term care insurance. "Under that, you can't afford the premiums and over that you can usually self-insure," he says.

More of Barbera's clients with even greater assets have been requesting information about long-term care insurance because they view it as a way to leave more cash behind for children, charities and other pet projects.

"They want to pass that money on to their children and want to bestow grants to their alma maters," he says. "It's insuring against that asset base being depleted. Spending $100,000 or more a year will take away from that legacy."

He notes that long-term care insurance has improved in terms of affordability and coverage since it started being offered in the mid-1990s.

Michael Branham, a financial planner with Cornerstone Wealth Advisors, suggests that clients also consider how much they plan to withdraw from their retirement portfolios each year. He says a client with a $1 million portfolio who withdraws 5.5% or more of the balance each year -- or at least $55,000 -- has a greater need for long-term care insurance.

"If you add the cost of long term care for one -- or both -- spouses on top of their normal monthly expenses, they will put a lot more pressure on their money, and increase the chances it will run out," he adds.