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SM&L provides a full range of services to clients in Connecticut, Massachusettss, Rhode Island, New York, California and Florida; we also provide consulting services on a national basis.

Does long-term care make sense for you?

You may be wondering if long-term care insurance is really worth the cost. It depends. As a consumer, you need to take a long, hard look at your individual needs and circumstances before signing up.

In general, long-term care coverage is designed to protect the assets of middle-income Americans. The very wealthy probably don't need it and low-income individuals may end up relying on Medicaid. And make no mistake: long-term care is expensive. According to the 2017 Genworth Cost of Care Survey, the median cost of a semi-private room in a nursing home is currently $7,148 per month (more than $85,000 a year). Upgrading to a private room will cost about $1,000 more each month.

Of course costs vary widely throughout the country, and the outlook for inflation is far from certain. To decide whether long-term care insurance is a good choice for you, consider at least three factors:

1. Your health history. If your family has a record of longevity and you expect to remain healthy, you may never need the coverage. A Boston College Center for Retirement Research study found that half the men and nearly 40 percent of the women who use nursing home care never have a stay that exceeds three months. If you expect to meet or exceed those averages, you may be able to scale back coverage or forgo it entirely. On the other hand, this type of coverage may be warranted if your parents had hereditary illnesses that required them to spend lengthy periods in nursing homes.

2. Policy provisions. Deductibles (also known as "elimination periods"), inflation riders, benefit periods, coverage rules — these factors and others influence premium costs. Many provisions can be tweaked to make policies more affordable.

3. Your ability to pay premiums. Generally speaking, the earlier you purchase a policy, the lower the premiums. If monthly premium costs will upend your budget or force you to postpone retirement, you may need to look at other options.

If you're considering this type of policy, check with your employer's human resources department. We can help you determine how tax obligations may affect your long-term care plan.

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