Can I afford long-term care insurance?

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Q. I watched my dad in long-term care for four years. How can I decide if I can afford long-term care insurance? I earn $80,000 a year and I’m healthy.

A. Long-term care insurance is very expensive, but paying out-of-pocket for long-term care may be worse.

“The reality is, if you do not allocate something for your potential long-term care needs, you are in fact allocating everything you have for long term care,” said Steven Gallo, a certified public accountant with U. S. Financial Services in Fairfield. “What I mean by this is that if you do not create a plan of how you will pay for long-term care should you need it, you are basically putting all your assets at risk, since virtually all of them will need to be spent down before Medicaid will step in.”

Gallo said many factors come into play when trying to determine whether or not you can afford the cost of long-term care insurance, such as your age, where you live and your current cash flow.

You mentioned your current income, but it’s equally as important to understand your current expenses, Gallo said.

He said it’s imperative that you meet with an advisor to assess your individual circumstances and to educate yourself on exactly how premiums are calculated and what your particular benefit needs are.

“There are many moving parts and unfortunately the premiums you pay today are not guaranteed to remain the same throughout your lifetime, so you need to be prepared for potential increases in premium costs,” Gallo said.

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This story was first posted in September 2015. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.