Financial planners are urging baby boomers to consider long-term care insurance in the event a chronic illness or disability renders them incapable of caring for themselves. Out-of-pocket spending on long-term care is one of the greatest health-related financial risks older Americans face.

        Long-term care policies can go a long way in making sure nursing home and assisted-living costs won't drain retirement income, experts say. A yearlong stay in the average nursing home costs $54,900, while some facilities charge nearly double that amount. "How many of us have an extra $150,000 set aside for something like this?" said Susan Coronel, long-term care director at the Health Insurance Association of America (HIAA).

        Older Americans would be wise to browse the Web to compare long-term care insurance rates, check out different providers and determine how much coverage is needed- if any.

        "There's no magic age at which a person should buy long-term care insurance," said Robert Davis, president of Long Term Care Quote, whose average customer is age 61, down from 68 six years ago.

        "We recommend buying long-term care insurance when they know they need it... as they gather assets and generate a net worth they are interested in protecting against the potentially crippling cost of long-term care.

 
PROTECTION

        One of the biggest mistakes consumers make is assuming nothing will happen to warrant a visiting nurse, home-health aide or stay in an adult day-care center. The very rich likely will be able to pay claims from existing assets, while the poor will receive government assistance through Medicaid.

        Long-term care coverage is "primarily designed for Middle Americans who erroneously think the government will pay for it," said Robert Bland, chief executive officer of Quotesmith.com, which began quoting long-term care insurance last year.

        Medicare pays for some skilled at-home care, but only for short-term conditions and not for the ongoing assistance many elderly need, according to HIAA.

 
WEIGHING LONG-TERM NEEDS

        Most people begin to think about their long-term needs as they do their retirement planning, or when an elderly family member is facing a health/financial crisis. With 70 million baby boomers heading into retirement, many are "witnessing mom and dad go through a long-term care experience, and in many cases mom and dad were not prepared," Davis said.

        The number of Americans who have purchased long-term care insurance has more than tripled over the last decade, from 1.9 million in 1990 to 6.8 million in 1999, according to an HIAA survey.

        When shopping for a policy, it's best to deal with well-rated, experienced insurance providers. They are most likely to keep their rates stable and honor your claims when the times comes. Providers such as GE Capital and John Hancock are worth checking out, experts said.

        If you're 60 years old today buying a long-term policy, chances are you won't need it for 20 years," Davis said. "That's where the quality carriers are so important." Check websites such as Standard & Poor's, A.M. Best Co., and Moody's for ratings.
 

SHOP EARLY

        A general rule of thumb applies to long-term coverage: The younger and healthier you are when applying for coverage, the easier and less expensive it will be to secure a policy. A 55-year old consumer who decides to wait until they're 70 to buy coverage could be making a costly mistake.

        Consumers "have to qualify from a medical standpoint and everyone goes through underwriting or approval process," said Davis. One in four Americans that want it can't get it because they have a pre-existing condition that makes them uninsurable.

        When shopping early, you'll also have more leeway in designing a policy fits your needs and budget. Long Term Care Quote has a needs analysis tool for gauging if and when coverage might be worth considering. It also has an interactive map for researching annual costs nationwide. As part of your decision, it's important to know what skilled care costs are like in the state you with to retire so you have a benchmark for choosing appropriate coverage.
 

DAILY BENEFITS, OVERALL COSTS

        Knowing this information will help determine what amount of coverage, or the daily benefit, you want from the insurance provider. Davis recommends going with at least 90% of the cost in your area to keep prices down. Most carriers offer a choice of deductible ranging from zero to 100 days. A 20-day elimination period, for example, means that your policy will begin to pay benefits starting on the 21st day. And the longer the elimination period, the lower the premium.

        Next, you should think about home-health coverage as part of the overall policy. "The home-health-care portion of policies has gotten so much stronger, and we see industry pushing features to help people stay at home where they're the most comfortable and costs are the least," Davis said.

        Lastly, you'll be asked about including a cost-of-living (inflation protection) adjustment in the policy. The younger you are when you purchase a policy, the more you need automatic, compounded inflation protection, Davis said. "Our rule of thumb is anybody 1 to 65 should include the 5 percent compound inflation."

        Once you establish your insurance criteria, you can better compare quotes from insurance Web sites. HIAA offers a long-term care policy checklist to keep you on the right track.

       For an even more exhaustive reference, check out the National Association of Insurance Commissioner's shopper's guide.

        For a general idea of cost, Davis estimates that a $100 daily benefit, 100% home health care and a 90-day deductible would cost someone aged 55 about $650 annually. The same policy would run $800 for a 60-year old, $1,260 to $1,900 for a 65-year old and $2,900 to $4,000 for a 75-year old.

        And don't forget to ask a provider about marital discounts, Bland said. State LIfe Insurance Company, for example, offers a discount of $529 on a premium worth $2,100 for two 60 year olds in California, with a $100 daily benefit, home health care and a 5% compound benefit inflation rider.