As a financial planning tool, long-term care insurance is, in a sense, like any other policy. It allows one to transfer to an insurance company part of the risk of monetary loss from a specified event—the need for covered long-term care services. Accordingly, some people focus on LTC coverage primarily in terms of dollars and cents, just like home or auto insurance.

Similarities aside, however, the reasons people buy LTC insurance are often very different from their motivations in purchasing other forms of insurance coverage. There are those, for example, who have sufficient assets to self-pay LTC costs, but not much more, yet they have a strong desire to preserve at least a portion of their estate in order to leave something to their heirs.

One of the goals of planning for retirement generally, and the possible need for LTC in particular, is the financial ability to make choices. Although one's mobility and freedom of movement are often reduced with advancing age and its inevitable health problems, people's situations and needs differ drastically.

Those who plan for LTC intend to have flexibility in confronting whatever challenges the future might hold. Maintaining the maximum in lifestyle independence is important to them.

If a nursing home ultimately becomes the best option, we would all like the means to reside in a facility we have chosen for its quality, not because we are required to be there. If a residential setting outside the home can be avoided by some interior remodeling and a modified bathroom, however, most of us would make that choice.

Indeed, the desire to stay at home—without creating stress for loved ones both financially and emotionally—is probably most people's highest priority in LTC planning. It has also become a driving force in both the design and sale of LTC insurance policies today.

Long-term care insurance can provide funds when other funds aren't available to pay for services that might otherwise have to be provided by children or other family members. Fatigue, financial and emotional stress, and even health problems can result when everyone's life has to change abruptly to accommodate the needs of a senior who is unable to afford help from other sources. Avoiding this scenario, as much as anything else, is the goal of many LTC policyholders.