Long-Term Care Insurance (LTCI) is an important part of retirement planning that should not be overlooked. Although it can be a vital component of a well-rounded and realistic retirement plan for most, it is not necessarily for everyone.

For example, if you are 55 years old or older and plan to retire with a moderate to high amount of assets, then you should seriously consider purchasing LTCI. The other option is Medicaid but you will have to give your assets away and you may have to wait up to five years before you are eligible for Medicaid nursing home coverage. Of course, you can use your own private funds and income to pay for care but how will you pay for your care when you have no assets left.

Medicare estimates that by 2020 approximately 12 million older Americans will need some form of long-term care. The bad news is that the cost of this type of care can be devastating and even worse, the cost is expected to increase at an alarming rate.

Currently the average cost of a semi-private room at a nursing home is approximately $70,000 a year. By 2030, these costs are expected to increase to $190,000 a year. It is typical to see nursing homes in the New York City Metropolitan Area costing $12,000 to $17,000 per month. Even if you do not need the care of a nursing home, the costs of assisted living, home-health aids, and other forms of long-term care can be devastating.

The best time to purchase LTCI is between the ages of 50 and 65, but you must be insurable. The insurer will determine whether it is worth the risk by considering your current health condition, stability of your health, and your potential for needing long-term care in the future. If you are denied by one company, try another insurance carrier.

Like anything else, the cost of LTCI is a consideration. This cost will depend on several factors, such as the insured’s age, the type of coverage, and whether there is an inflation rider.

The bottom line is that long-term care is an important factor in planning for your future and should be included in any conversation involving retirement planning.