Over The Hill: Long Term Care Insurance

BOSTON (CBS) - At 55, do you need Long Term Care Insurance? I don't know! I do know that only about 4% of our elders do reside in a nursing home.

And I do know is that 15 years ago there were over 100 companies selling long term care insurance and now about 15 or so. Why? Because they couldn't make money on it. Their actuarial data underestimated payout risks.

Insurance companies are now selling some hybrid products. You can purchase life insurance with a long-term care rider. But you need to buy a lot of life insurance. And companies are raising rates on their current policy holders.

Long term care insurance covers nursing home care and maybe home care for those individuals who cannot perform the activities of daily living referred to as ADLs. These activities are bathing, dressing and grooming. The activities that allow someone to live independently.

So, the big question is, do you need it? I don't know! According to Genworth Financial's 2016 Long Term Care Survey, the national average annual cost of a semi-private room in a nursing home is $82,125, with it costing $135,000 here in Massachusetts.

Recently some studies indicated that it almost didn't matter when you purchased the insurance for the pricing came out about even. If you bought the cheaper policy at a younger age versus the more expensive at an older age the premiums ended up costing about the same if you used a targeted nursing home date. Why? Because you pay the cheaper premiums longer. But as you age you do take on the risk of being uninsurable.

If you have some assets to protect like your home and a stock portfolio you may be a good candidate for long term care insurance. If you are poor or very wealthy you probably don't need long term care insurance. The wealthy can self-insure and the very poor will be eligible for Medicaid.

The majority of people purchasing long term care insurance buy this product when they are in their late 50s. About the same time, they realize that getting up out of a sitting position takes some thought.

One more thing: About 4% of our elders are in nursing homes and most of those are women over 85. Women tend to outlive men and often times take care of their husbands and then have no one to care for them.

Uncle Sam is encouraging you to purchase long-term care insurance. Part of the cost of the premium will be treated as a medical expense and will be deductible if you are over age 40. The benefits will be generally excluded from gross income. The government would like to get out of the business of funding long-term care through the Medicaid program.

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You can hear Dee Lee's expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.

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