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MADELEINE BRAND, host:

From NPR News, this is DAY TO DAY.

We've been talking a lot about the economy today, about the markets and investments. We're going to turn now to insurance.

ALEX CHADWICK, host:

Many baby boomers assume they're going to need long-term care insurance that covers you if you need help taking care of yourself as you age. And it can be very expensive. One recent survey found many middle-aged people think they have long-term care insurance when in fact they don't. So why all this confusion? Michelle Singletary, DAY TO DAY'S personal finance contributor, is here to clear things up.

Michelle, welcome back. And how many people really end up needing long-term care?

MICHELLE SINGLETARY: You know, quite a bit. Basically, you're more likely after 65, you have about a 60 percent chance that you're going to need long-term care some time in your senior years.

CHADWICK: And what exactly is covered by long-term care insurance?

SINGLETARY: Well, when they say long-term care insurance, it's going to cover things like if you need to go into a nursing home or an assisted living facility or you need what they call custodial care, someone who comes in and helps you bathe or dress or helps prepare your meals. And so if you have long-term care insurance, it would take care all of the above.

CHADWICK: So who should buy this kind of insurance, do you think?

SINGLETARY: Really, you need to start looking at this as part of your retirement plan. And as you're approaching your 50s, you need to start doing some research. And anywhere from 50 to 60 is where most experts will tell you that you need this kind of insurance.

CHADWICK: So why is it that people think they have this insurance when in fact they don't?

SINGLETARY: Well, because a lot of folks think it is covered by Medicare when in fact it doesn't. Now, Medicare covers some of this, but you have to - there are certain conditions that you have to meet. And Medicare does not pay for custodial care. Remember, I talked about that's helping you with daily activities. Now, Medicaid does cover long-term care. But as most folks may or may not know, you need to be low income and basically have no assets to qualify for Medicaid. So the fact is, most baby boomers or people in their senior years think that Medicare is going to cover it, and it's not.

CHADWICK: So how much does this insurance cost?

SINGLETARY: It could be very costly depending on where you live and how old you are. Policies can range anywhere from, you know, 1,000, 1,200, to $8,000 a year. And the older you are, the more it's going to cost because of course the notion is that you're going to probably use it in a short period of time. So you need to do a lot of homework. You need to look at a lot of policies. Some experts recommend, for example, one thing you definitely need in a policy is inflation protection because health care costs go up, you know, all the time. And so you want to be sure that your policy benefits are keeping pace with inflation.

AARP has a great section - they've built an entire section on their Web site devoted to long-term care insurance, how much it should cost, when you should get it. For example, if you are just struggling and you are barely paying your bills, you probably can't afford long-term care insurance because you want to keep it in place for the long haul. I mean, possibly you could have this insurance for 30 or 40 years depending on when you buy it. But I would say go to AARP. And Kiplinger, which produces Kiplinger Personal Finance magazine, has a Web site that they just launched. Just type in Kiplinger and long-term care and you'll get that on the site up.

CHADWICK: On behalf of all my fellow boomers, thank you, Michelle Singletary.

SINGLETARY: You're welcome.

CHADWICK: Michelle's our regular expert on personal finance. She writes the nationally syndicated column, The Color of Money. You can hear more from her at her NPR podcast. Go online at npr.org/colorofmoney, and that's all one word.

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