As life expectancy increases, so do the costs associated with aging, especially when seniors need help with daily tasks like dressing or eating.

A Study shows that the national average cost for a home health aide was $21,840 annually, while a private room in a nursing home cost $87,235 per year in 2011.* According to Department of Health and Human Services**, close to 70 percent of people over age 65 need long term care which can include care in a nursing home or assisted living facility, or home health aides to assist with daily activities like bathing or meal preparation.

For low-income individuals, Medicaid covers costs such as nursing home care in a Medicaid-approved facility. But those who have sizable assets would need to transfer assets or spend them down before qualifying for Medicaid. Medicare covers certain medical needs, but not day-to-day activities like dressing, bathing, or using the bathroom.

If your life insurance policy offers an accelerated death benefit, that would allow you to use some of your life insurance money while you’re still alive to cover long-term care costs. Long-term care insurance is another way to cover those costs, and it’s especially appealing to those with assets they want to protect instead of spending them down to qualify for Medicaid.

In fact, the only people who should be buying long-term care insurance are those with assets over $50,000.

In addition to protecting assets, long-term care insurance affords more choice about whether you move into a nursing home or assisted living facility or stay at home. Long-term care policies can cover home care, while Medicaid generally does not.

Since long-term care insurance is medically underwritten, it’s tough to qualify for a policy if you’re already showing signs of dementia or another condition that might necessitate long-term care. And because older policyholders are more likely to need this type of care, age is heavily factored into the premium.

However, younger policyholders may also want to consider inflation protection, as the cost of home or nursing home care will likely increase by the time by the time they need it.

If you purchase a state Partnership-qualified policy, then your policy must provide inflation protection. Policies through the Partnership Program are also tax-qualified, meaning if your annual premiums and other out-of-pocket medical expenses exceed 7.5 percent of your adjusted gross income, they are tax-deductible.

The Partnership Program (available in most states and designed to make long-term care insurance more affordable for middle-income individuals) provides another key benefit: asset disregard, which helps consumers qualify for Medicaid to cover additional care beyond their policy limit without spending all their assets.

Cost is one of the main deterrents to purchasing long-term care insurance. When considering a policy, it’s important to make sure you can afford the monthly premiums.

Affordability is not just what you’re paying now, but whether you can afford to do so without insurance and run the risk of $60,000, $80,000, or more per year or longer.

Specific policies vary, so consumers should make sure the policy covers the type of care they would want before they buy.

Some policies cover more home care, and some cover nursing home care. Ask yourself: Am I going to need assistance only at home? Do I absolutely not want to go into an institution?

Thinking about needing this type of care may not be pleasant, but it’s necessary. Most people prefer not think about it, but they’re creating a potential financial disaster and maybe a personal disaster. The issue is financial but it’s also psychological. The good news is we are learning a lot about nutrition and medicine so we can live a long time. The bad news is there might not be a light at the end of the tunnel unless we’ve made arrangements.