I was told it's critical because it allows families to gut family savings without repurcussions from the state. In Ohio anyway, Metlife told us that the advantage to this type of plan is that you cannot be penalised by a lookback period (normally five years) for a person requireing Medicaid. Reason being, you took steps to have long term care handled by another instutution, meaning an insurance company. The cost at the time was $11,000 per year, that was in 2010. You have to show them (Metlife) how you can manage such an extravagent luxury item as well. You also will need proof you can qualify at present, which includes a thorough physical and a cognitive test. So, if you are considering this type of insurance, it's something probably best done in your 50's, before they really will start to scrutinize you and your spouse as well. We, meaning my mother, did not qualify and do'nt know much further from there, except to say that there are very, very few choices in vendors. Most insurance companies have gotten away from it, unless there's a way to alter the product to make it more favorable to them (less risk). So my mother has paid in the neighborhood of $XXXk (*EDITED* lets just say, a lot) for her care since 2010. So, from that standpoint, 11k per year, even with possible increases is peanuts. I can't remember if they said the premiums were fixed, or not, but I thought they were.
Now for some heresay; some time after we considered this route, and later on as my mothers health failed, I was told by someone in the nursing home industry that the insurance company can also qualify you for Medicaid, at some point, meaning they can walk away from your financial responsibility at that time. It was explained to me by this person that when the 100 days Medicare rule comes into play, meaning after a hospital stay, Medicare kicks in for residency (which is the huge cost we are discussing) for 100 days. This person explained that at that point LTC insurance can also back away and leave you on Medicaid if you qualify. Now if you don't qualify, obviously that would leave the family back on the hook for the resposibility after you've paid all those premiums. I have no experience with that scenario, but it is what I was told.
If I were considering this type of insurance again, I would most certainly run it by a trusted lawyer after you've been accepted before you make a final decision, and maybe that should be a specialised elder care lawyer as well. HTH, Lefty71