Should I get long-term care insurance?

This is a question I hear a lot in my professional life and I think the answer depends on your level of personal wealth and the specific policy you are looking at.

In the case of a serious illness, long-term care bills can stack up fast (up to $250/day), not to mention the loss of income from not being able to work. Based on this, it would appear that you would want to have a long-term care insurance policy to protect your retirement savings and to help pay for assisted-living centers, home care, and other services. But another key thing to note is that most people admitted into a long-term care facility are discharged within 90 days, and depending on how long your policy's "self-insurance period" is, you might be discharged before coverage even kicks in.

So, the general advice is this: if you have little wealth, you should not spend money on long-term care insurance and instead rely on whatever government programs are available. If you have great wealth, you are better off self-insuring. And if you are in the middle, you should look at your age and general health to estimate the probability of you being in a long-term care facility for longer than 90 days.

If you are young and unlikely to ever experience a long stay in a care facility, you are better off self-insuring by setting aside some savings every month to pay for future long-term care. Provided you are disciplined enough!