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8 Long-term Care Insurance Myths

"Typically, long-term care insurance is for middle-income people," Casto says.

Poor people generally can't afford the premiums, and the very wealthy may prefer to pay for their care out of pocket. If assets, other than a home, are less than $30,000 for single people and $80,000 for married people, they probably can't afford long-term care insurance, according to the LIFE organization.

If you lack adequate assets, you'll have to spend your own money and then rely on Medicaid, the federal and state program for low-income families and elderly and disabled adults, to cover your long-term care.

If you have assets to protect, you should consider purchasing long-term care insurance, unless you've done a thorough financial analysis and determined that you can self-insure.

Myth No. 4: The premium will never go up

No company guarantees premiums on long-term care policies will remain the same, says Charles Matt, a financial adviser with Sapient Financial Group in San Antonio. Insurance companies reserve the right to increase premiums through the life of the policy, depending on overall claim costs and investment earnings.

Myth No. 5: I should put off applying for long-term care insurance until I'm ready to retire

Many people wait until they approach retirement to apply for long-term care insurance, thinking it's best to put it off as long as possible. But Matt has seen this backfire for some clients. By the time they applied for coverage, they had developed conditions, such as diabetes or high blood pressure, which disqualified them for the best rates for their age or made them ineligible for coverage, period.

"I make a concerted effort to get clients to start looking at long-term care insurance at age 50," Matt says.

Myth No. 6: It's nursing home insurance

Although long-term care insurance covers care in nursing homes and assisted-living facilities, most of the claim dollars today are spent on home health care, Matt says.

Myth No. 7: The elimination period is a waiting period

Most policies have an elimination period, typically 90 days, before the policy will pay for services.

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