The average annual cost of nursing home care is about $74,000, yet only 10% of Americans age 65 and above have long-term-care (LTC) insurance to cover this big expense. How to find an affordable Policy...

THREE WAYS TO SAVE

*Choose a firm that has staying power. More than 100 companies sell LTC insurance, but only a few have done so for at least 15 years without increasing the premiums. Though premiums can increase with state regulatory approval, many firms have a history of stable pricing.

*Consider a policy that offers cash benefits. Traditional LTC policies specify exactly what types of care are covered and pay only for those services. "Disability model" policies pay cash and let policyholders who are eligible for benefits, use the money as they choose - say, to finance a nursing home stay or for in-home care. You even can keep the money and let a family member look after you.

Important: Benefits in excess of a specific amount ($250 per day for 2006) may be taxed as income. This tax threshold should increase in future years.

*Buy a policy when you are young. The sooner you buy, the better the rates are for the life of the policy. If you do wait until your health begins to deteriorate, the expense will be higher still - if you are healthy enough to qualify at all. Although buying LTC insurance is worthwhile even for older people, attractive LTC rates are available to those in their 30s and 40s.

Example: A 40-year-old could buy a policy from one of the top companies that pays $6,000* per month in benefits for a total benefit amount of $360,000 (with a 90-day elimination period before benefits kick in). The annual premium would be about $300. The annual premiums for the same type of policy could be $1,500 at age 60 and $3,000 at age 70.

Helpful: Most carriers allow a 30-day grace period after a birthday to get coverage based on your previous age.

SPECIAL OPTIONS FOR COUPLES AND FAMILIES

Get a couple's discount whether or not you and your partner are married. Insurers are offering discounts to unmarried - including same sex couples.

Examples: Genworth provides a 40% discount for couples who live together ... Prudential offers a 30% discount to couples if both partners purchase policies.

Prudential and MetLife even extend their couples' rates to multigenerational cohabitates, such as a mother and adult child who live together. Smaller discounts typically are available when only one partner applies or qualifies for coverage.

*Share the care with your spouse. Married and unmarried couples can save money with a "shared-care" plan.

Example: You buy a shared-care plan with eight years of coverage. If you need only five years of long-term care, your spouse will have three years of coverage available. This should lower your cost, since one eight-year shared-care plan is cheaper than two separate policies.