What is long-term care insurance? Long-term-care policies are designed to help pay for the costs associated with nursing home care and the cost of assisted living. They may also help with the costs of home health care.  The costs to buy these policies are rising. According to the American Association for Long-term Care Insurance, a trade organization for insurance agents, the premiums for these types of policies have risen by as much as 17% in the last year.

This is coupled with the fact that insurers are pulling back. According to Moody’s Investors Services five firms, citing higher than expected claims costs, have left the business or dialed back since 2010. These companies include MetLife, Guardian Life, John Hancock, Unum Group and Prudential Financial.   

The real problem is that the need for long-term care planning of some kind remains greater than ever. Seventy percent of individuals over 65 will require prolonged care at some point during their lives, according to the National Clearinghouse for Long Term Care Information.

As the number of baby boomers retiring accelerates, the number of long-term-care seekers is expected to rise to 15 million by 2020. The costs associated with long-term is already expensive, easily topping $80,000 a year for nursing home stays and this is expected to rise substantially over the coming years. Just one long-term care event can completely derail one’s retirement plan and place the burden of care upon one’s children.    

Fortunately there are alternatives to those who are hoping to buy long-term coverage. This alternative comes in the form of life insurance products that incorporate living benefits into their policies, usually in the form of riders. The sales of these types of life insurance policies have been rising as the sales of traditional policies have been fading. These “life combination” products give the insured access to the policies benefits while they are living.