Long-term care is something that most of us don’t want to think about, but it’s a reality that we need to prepare for. According to the government, 70% of people who reach age 65 will need some form of long-term care in their lifetime, and women tend to need it longer than men. The cost of long-term care can be staggering, with an average nursing home stay costing about $7,000 per month. That means women could face a potential bill of over $300,000 for 3.7 years of care.

Fortunately, there are ways to protect yourself from the financial burden of long-term care. One of them is long-term care insurance, which can help cover the expenses of various types of care, such as home health care, assisted living, or nursing home care. But before you buy a policy, you need to understand the different options available and how they work.

There are three main types of long-term care insurance: traditional, hybrid, and rider.

• Traditional long-term care insurance is the most common and straightforward option. You pay a monthly or annual premium, and if you need long-term care, the policy pays a daily or monthly benefit for a certain period of time. However, if you never need long-term care, you don’t get any money back from the policy. It’s a use-it-or-lose-it deal.
• Hybrid long-term care insurance is a combination of long-term care insurance and life insurance. You pay a lump sum or a series of payments, and the policy provides both long-term care benefits and a death benefit. If you need long-term care, the policy pays a benefit that reduces the death benefit. If you don’t need long-term care, your beneficiaries get the full death benefit when you die. It’s a use-it-or-use-it deal.
• Long-term care rider is an add-on to a life insurance policy. You pay an extra premium, and the policy allows you to use a portion of the death benefit for long-term care expenses. The amount of long-term care benefit is usually a percentage of the death benefit per year. If you need long-term care, the policy pays a benefit that reduces the death benefit. If you don’t need long-term care, your beneficiaries get the remaining death benefit when you die.

The cost of long-term care insurance varies depending on your age, health, type of policy, and coverage options. Generally, women pay more than men, because they live longer and have a higher chance of needing long-term care. The average annual premium for a traditional long-term care insurance policy was about $3,000 in 2019, according to a report by the U.S. Department of the Treasury.

The good news is that you can customize your long-term care insurance policy to fit your budget and needs. You can choose the amount of benefit, the length of benefit, the waiting period, the inflation protection, and the guarantee option. You can also make changes to your policy as your situation changes over time.

Long-term care insurance is not for everyone, but it can be a valuable tool to protect your finances and your peace of mind. You should do your research and compare different policies and providers before you make a decision. You should also have a plan for how you will pay for your long-term care needs, whether it’s through insurance, savings, or other sources.

Long-term care is not a pleasant topic, but it’s a necessary one. By planning ahead, you can ensure that you get the care you need and deserve, without compromising your financial security and your family’s well-being.