For the first time in the nation’s history, between 25 percent and 30 percent of adults are serving as caregivers for someone 50 or older. Advances in medicine have allowed members of the World War II generation to live much longer than previous generations, yet many of these older Americans are not in good health and require personal or institutional assistance.

For the many thousands of us who, directly or indirectly, have become caregivers, caring for aging family members is a riveting experience. We’re learning firsthand how expensive and lengthy long-term care can be. And now a growing number of us are wondering who will take care of us, and how they will do it. The statistics aren’t pretty. By 2020, half of the US population (around 157 million people) will have at least one chronic condition, and some 81 million people will be living with multiple conditions, according to a study by Pfizer. Moreover, many of us may need assistance before we are very old: Industry studies show that 40 percent of people needing long-term care are between age 18 and 64.

Even for people with higher-than-average assets, long-term care, which basic health insurance does not cover, can create stressful consequences. With the average cost of nursing home care at $61,000 a year, financial assets can disappear quickly. That’s why Prudential Insurance Co of America calls long-term care “the largest unfunded liability in the United States.”

In an attempt to reduce this liability, some insurance companies began offering long-term care policies several years ago. Initially, the plans covered only nursing home care, but since have expanded to cover assisted living care, skilled nursing, adult day care, and even some home care. In addition, options are available for when and how funds can be used to offset the cost of care.

Much of the risk has been removed from long-term care plans. In the early days, if someone paid into a plan for several years and then died unexpectedly before taking disbursements, money that had accumulated could not be returned to beneficiaries. But today, depending on the type of plan purchased, that is not the case. In fact, there is a smorgasbord of ways money can be invested in annuity-like fashion to provide long-term assistance if needed, or a financial return if assistance isn’t needed.

A long-term care policy should not be viewed as a substitute for life insurance, securities, or other investments, but it is a valuable supplement. For example, we think nothing about buying insurance to cover a house fire, yet the chance that someone will need long-term care is 600 times more likely. The odds of needing long-term care is 120 times greater than an automobile accident and potentially 20 times more expensive. Clearly, long-term care insurance is at least as important as the other forms of insurance we buy.

Today, more women than men are buying long-term care plans. That stands to reason, given that women continue to outlive men. In 2003, almost half of all older women were widows. In fact, there were more than four times as many widows (8.2 million) as widowers (2 million), according to industry reports. But because men are living longer, too, and tend to have more health problems in their later years than women, long-term care is as important for them.

In general, adults should purchase long-term care insurance before age 55. The younger a person is, the less he or she will pay. A person who takes out a plan at age 45, for example, could pay half of what a 60-year-old would pay. Plus, premiums cannot be increased because of age.

The average plan costs about $1600 per person annually. Most long-term care plans pay a fixed dollar amount per day and allow the policyholder to determine the amount and length of time the policy will cover. Benefits can begin immediately or follow predetermined intervals, such as a 30-day or 60-day waiting period. Because of inflation, some policies can increase in cost, unless inflation protection is part of the plan.

When long-term care policies first were offered in a broad way years ago, one could argue fairly convincingly that they were practical for only a small percentage of the population. Since then, the cost of nursing, assisted-living, and home-health care has skyrocked, and government programs such as Medicare have done little or nothing to address the problem. That’s why 30 percent of those receiving long-term care today are relying on personal savings to cover the costs.

Many plans are on the market, all with various options, limitations, and fine-print stipulations. Some plans offer a means for deducting premiums; others don’t. Some plans provide a daily payout; others a monthly payout. Some plans provide compounding; others don’t. At least for now, the best plans are offered by the largest and best established insurance companies.

What is clear is that with ever-rising healthcare costs and no Medicare solutions on the horizon, long-term care insurance is a modern reality. After a decade of tinkering and tweaking, many plans offer asset protection in a more affordable manner. Long-term care insurance still may not be for everyone, but it’s time for everyone in their 40s and 50s to consider it.

Charles R. Elhoff Jr, CFP, ChFC, CLU, TMAIT Advisor, Owner-Elhoff Financial Counseling, Arlington, Texas.