When people consider the subject of long-term care, they often think about nursing homes. In fact, long-term care has little to do with nursing homes. Understanding the difference can help you protect your family and finances.

Think back 25 years ago. Few ever heard of Alzheimer's. Today, it is the leading cause for long-term care services. Long-term care is defined as, needing assistance with your activities of daily living such as bathing, dressing, eating and continence. It also includes cognitive impairment so severe that the individual needs constant supervision.

If you need custodial care, chances are it will be delivered in the community, not in a nursing home. Many of you have heard compelling statistics from The New England Journal of Medicine stating that 43 percent of those over age 65 will need nursing home care.

Who Covers the Cost? Medicare, the primary health care program for retirees pays only for skilled or rehabilitative care, not custodial care in any venue. Medicaid, a federal and state program for financially needy individuals will pay for custodial care, but primarily in nursing homes.

Veterans believe that the VA will pay for home care, adult day care, or assisted living. As with Medicaid, funding is limited and generally based on servicerelated disability. The result is that consumers are forced to pay privately for their care.

Unfortunately, the best thought-out retirement plan rarely takes into consideration living a long life. This results in the need to invade principle and divert income. As a result, one of seniors' greatest fears; outliving their assets, literally may come true.

The use of long-term care insurance thus becomes an important part of planning for disability caused by living a long life. The product has two roles: helping keep families together and allowing your retirement portfolio to execute for the purpose for which it was intended, namely retirement.

Like it or not, children will play a key role in providing your care as you age. Longterm care insurance doesn't replace the need for family involvement in providing care, but rather builds on it. It pays to have professionals assist the person with the toughest tasks, such as toileting, bathing, feeding and continence. This, in turn, allows the family to provide care better and longer at home.

This leads to a critical question: have YOU planned for the consequences of living a long life? From a financial point of view, LTCI allows your retirement plan to stay intact. That is particularly important given the recent steep decline in portfolio value. The product, in effect, protects the balance of your account value.

LTCI also protects income. Although you may qualify for Medicaid to pay for nursing home costs by transferring assets, your income, pension, social security, IRA and or 401 k payout cannot be protected.

When buying this insurance, look for a longterm care specialist. Consider their training, educational credentials, and commitment to help solve your longterm care needs. The key is whether they talk first about a plan or a product. If they are interested in the plan, you are dealing with a professional.

If they focus first on product and price, consider getting another opinion.