By the year 2020, some 45 million Americans will be over age 65, and 4 million will live in nursing homes. The chances are that you or someone you know will be among them. With nursing home costs now averaging $26,000 (or more) annually, individuals may quickly run through both their income and their savings if they require an extended nursing home stay. Medicare begins to provide benefits at age 65, but will not subsidize long-term care beyond one month.

If you have substantial income and assets worth protecting, you should consider looking into long-term care insurance, which can encompass three distinct types of care:

• Skilled care, which is 24-hour-a-day care by a registered nurse under a doctor’s supervision;
• Intermediate care, which is occasional nursing and rehabilitative care under the supervision of medical personnel; and,
• Custodial care, or help with personal needs such as cooking and bathing. In-home assistance with daily activities is considered long-term care and is becoming more prevalent.

Individuals with an annual income of less than $15,000 and who have little savings, may qualify for Medicaid, which covers most nursing home expenses. As you can see, for those who earn more than $15,000 a year, it would be wise to plan ahead in order to protect you and your family against being fully liable for the costs of long-term care and faced with using not only your investment earnings, but also your investment funds themselves.