Paying for long-term care is a worry for many, particularly aging baby boomers. This week, certified financial planner Kevin Young, of Young Wealth Management in Davis, offers some advice on the topic.

To see more of his "Ask the Experts" answers, as well as those of our other local experts on taxes, investing and wills/trusts, go to: www.sacbee.com/ask.

I'm 65 and interested in getting long-term care coverage. My financial adviser is recommending a life insurance policy, which has a long-term care (LTC) benefit within it, that costs upfront about $70,000. The selling feature is that they refund your premium if you don't use the long-term care after 20 years. A regular LTC policy will cost $3,500 annually due to my age. My husband I have about $400,000 in IRAs. Would it be a good move to protect these investments by buying either the regular LTC policy for me or the life insurance policy that includes LTC benefits?

There are five options for paying for long-term care: Help from family and close friends; personal assets (known as self-insuring); insurance (LTCI); Medicaid and other government programs; and lastly, a combination of any of the four listed.

As you know, health insurance and Medicare do not cover the expense of long-term care. If your net worth is mainly your IRA balance and your primary residence, buying LTCI/life insurance may not be the best use of your limited resources.

Life insurance protection should be moved to the bottom of your priority list.

The policy being sold to you is known as a combination policy or bundled policy. It's a life insurance policy with a LTC insurance rider, which can be used to pay for long-term care expenses. The selling pitch from insurance agents who sell this type of policy is that, if you don't ever use the long-term care benefit, you will have a death benefit.

The death benefit is reduced dollar for dollar when you use the long-term care portion of the life insurance policy. Combination policies such as this are expensive and do not offer a good value.

The drawbacks to these types of policies include: high costs; couples cannot share the pool of long-term care benefits; long-term care benefits may be limited; benefits may not keep up with future long-term care costs.

Based on your current age, 20 years from now is statistically when your long-term care needs would start. Between now and then, the costs of long-term care are estimated to increase by double digits. A long-term care insurance policy without compound inflation increases would have much less value in 20 years.

Also, the policy you've been offered may have limi- tations on where you can receive care and may provide only a limited menu of features to suit your budget and anticipated needs. You want an LTC policy that is comprehensive.

Please spend some time analyzing how much coverage you need and the best way to fund your insurance planning (risk management) needs.

I recommend consulting an objective financial planner, one who doesn't sell insurance and who understands your entire financial plan.

– Compiled by Claudia Buck

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