May 30, 2014

It all depends on how big a lifetime benefit you choose and the level of coverage you want. You can add many different options to basic plans.

But, in general, we’re talking about an annual premium that will cost a few thousand dollars a year, at a minimum. And you will pay that for a long time: from the first year of your policy all the way through until you start drawing on the policy. That could be 30 years down the line.

This is important: You will have to keep paying the premium when you are retired and likely living on a smaller income. If you stop paying your premium at any time, you can lose your coverage, including every penny you paid up to that point (When you receive benefits you typically are not required to continue paying your premium. But if you then stop receiving those benefits – say, you needed nursing-home care for just a few months, after an illness – you’ll need to resume making premium payments once you are no longer drawing the benefit.)

If you doubt your ability to keep paying for the policy through retirement, you probably shouldn’t buy it.

The National Association of Insurance Commissioners (NAIC) suggests that you spend no more than 7% of your income on premiums.

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