For example, if you don't have a lot of retirement savings or any at all, you'll probably qualify for Medicaid in a very short period of time, making long term care insurance not so necessary. According to the NAIC, if you're on Medicaid now and your only source of income is Social Security, long-term care insurance is not a good idea.

Long Term Care Insurance is not cheap, so consider the following advice from the National Citizen's Coalition for Nursing Home Reform when making your decision:

Pros

• Helps protect your assets, retirement savings, or inheritance from being spent on long term care expenses
• May help you avoid becoming dependent on your family as you age and become unable to take care of yourself
• May give you the freedom to pick the long-term care services you prefer, such as choosing a nursing home
• Policy may cover more than nursing homes, such as home care, adult day care, assisted living, etc.
• Will help you avoid Medicaid
• Premiums will be treated as qualified medical expenses for tax purposes

Cons

• Premiums/copayments may be unaffordable, especially for older people.
• If your assets are low, you may soon qualify for Medicaid whether or not you have long-term care insurance.
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Long term care insurance coverage may be limited
• Policy benefit payments may be below the real cost of nursing home care

Long Term Care Policy Must-Haves

If you decide to purchase long term care insurance, the NAIC recommends that you make sure the following items are included:p>

• The right to cancel the policy for any reason within 30 days of purchase and receive a full premium refund
• At least one year of nursing home or home healthcare coverage or both, including intermediate and custodial care
• A guarantee that the policy cannot be canceled or terminated because of the policyholder's age or physical or mental health condition
• An "outline of coverage" that clearly describes the policy's benefits, terms and limitations in detail. It's important to understand how much money the policy would pay, and how much the policyholder would be responsible for out-of-pocket expenses.
• A clear description of the elimination period. Some long term care health insurance policies have a set number of days that must be spent in a nursing home, or in claims status, before the long-term care insurance coverage kicks in.
• Consider an inflation protection option that periodically increases the benefit level without the need for the policyholder to provide evidence of insurability.