A health-insurance variation designed to cover the costs of long term care at home or in a nursing home. These policies offer a specified nursing home benefit and home-care benefit. Some policies also account for inflation. The popularity of long term care insurance has grown as federal laws have changed, making it less likely that Medicaid will pick up the tab for long term care.

How much the policy will pay, at most, every day care is received. Most policies allow for benefits to be anywhere from $40 to $250 a day. The average cost of care in your geographical area should be used to determine what is appropriate for you. Go to map to view individual state costs.

- How long is the company going to pay benefits when you need them? 2 years, 3 years, 4 years, 5 years, and Lifetime or Unlimited are common options. Remember, the average length of a nursing home confinement is just under 3 years, but most families choose to insure for a longer period of care. Your personal budget for insurance premiums is a key factor in this decision. .

The deductible on a long term care policy. Usually 0, 30, 60, 90, or 180 days. How long are you willing to finance your own care before the policy takes over? Keep in mind the possible cost of care in several years, and the way the actual deductible will grow with inflation. Usually, 30 or 90 days are acceptable choices.

Three choices...

1. Compound Inflation - The daily benefit grows at 5% compounded yearly. The best choice for younger buyers, age 45 to 65.

2. Simple Inflation - The daily benefit grows at 5% of the original amount each year. The best choice for buyers between ages 65 and 75.

3. No Inflation - Not buying inflation is certainly an option. This is acceptable at advanced ages, 75 and up, when a higher daily benefit may be a better solution to the inflation problem. This is a poor choice at all younger ages.