Tom Binder wanted to prepare for the future -- including the possibility that he or his wife could be stricken by a long, debilitating illness in their sunset years.


"I don't think it's a good bet that you're just going to drop dead," said Binder, 50, a Santa Monica-based art dealer. "What if you suffer a stroke in your 60s or 70s, and through the miracles of medicine you live into your 90s?

"That was my worst-case scenario: that I would linger for many years."

To make sure that he could survive financially, Binder made a purchase that has become increasingly common for a generation that once focused almost obsessively on being young: He agreed to pay $4,500 a year for insurance to cover the costs of long-term care for him and his wife.

Advocates of the insurance say it offers needed protection and peace of mind in an era of greater longevity and rising healthcare costs. Nonetheless, some experts warn consumers to proceed with caution.

"If you can afford it, it's a good thing," said Glenn R. Kantor, a Northridge attorney who specializes in insurance issues. "But there are lots of caveats."

Most policies reserve the option to hike premiums, and rate increases as high as 40% have shocked purchasers -- in some cases forcing retirees to quit their plans or scale back coverage.

Some consumers also have complained of excessive waits for payment or that insurers have resisted paying legitimate claims.

Despite those potential drawbacks, proponents say there are good reasons for considering long-term care coverage, especially for those without relatives willing to see them through a long bout of frailty.

Nursing home care can cost $75,000 or more a year, leaving once-middle-class people dependent on Medicaid, a program for the poor. And hiring someone for help at home with the most basic chores of living -- bathing, dressing and eating -- ultimately can ravage a lifetime of savings. Long-term care insurance can enhance people's options for the help they need to survive, at home or in an institution.

"If you want to get care at home, you can get it. You have choice and control," said Jesse Slome, executive director of the American Assn. for Long Term Care Insurance in Westlake Village.

"People still look at this as a purely financial product," he added, "but the intangible benefits are worth their weight in gold."

But plans vary widely in cost, in how soon benefits may take effect and how much money a person might have to pay out of pocket should care be needed. That means consumers really need to pay attention to the fine print before they buy.

Multiple options

A typical long-term care policy offers various provisions, each of which can affect the cost and has the potential to confuse consumers, experts say.

Most policies provide a set daily benefit, often in the range of $100 to $150. They also come with waiting periods that must elapse before benefits begin, commonly 60 to 90 days. Benefits are typically restricted to a set number of years and are triggered only by certain events, such as the onset of severe dementia or the inability to perform certain basic living tasks.

A typical policy purchased by a 60-year-old in 2005 cost about $2,000, but consumers can spend less or substantially more, depending on the generosity of various provisions.

Consumer advocates strongly recommend that people buy inflation protection. You might not make a claim for 20 years or more, and over that much time the value of your benefits could be eviscerated by inflation.

Beyond that, unknowable developments -- such as changes in medical technology and advances in treating chronic illnesses such as Alzheimer's disease -- can make it impossible to be certain that a long-term care policy bought today will meet a person's needs in the future, said John Rother, director of policy and strategy for AARP.