For many Americans, purchasing home, auto, and health insurance is standard practice. But long-term care insurance is a mystery to many, although it offers important financial protection against some of life’s uncertainties.

The goal of long-term care (LTC) insurance is to protect the policyholder from paying the full bill for an extended stay in a health care facility, such as a nursing home or rehab facility.

Because it is not known whether you will need long-term care in the future, and the costs can be very high if you do, it pays to educate yourself about your long-term care insurance options and make an informed decision.

You may need specialized care at some point later in life. For example, as you age, your doctor may discharge you from a nursing home after hospitalization for surgery or illness. Fortunately, Medicare will cover qualifying stays of up to 100 days. Sometimes, however, deterioration in physical or mental health caused by accident, illness or dementia will lead to a prolonged stay in a nursing home or continuous home nursing care. When this happens, even families in good financial standing may need to balance spending on long-term care with their other priorities.

While Medicaid will cover long-term care costs after 100 days, this federal program requires individuals to deplete their personal savings first, among other qualifications. For this reason, even people who are financially comfortable may want to carefully consider long-term care insurance.

Here are some things to think about when considering long-term care insurance:

· Your age and health may affect your eligibility. Buying a policy when you’re relatively young and healthy can mean more years of payments, but it also helps you secure a benefit that may not be available when you’re older or in the event you experience a health problem. The cost of a policy tends to increase with age, particularly after age 60 when health problems start to become more common. If you have a pre-existing condition or a family history of one, you may not be eligible to purchase certain policies. Please review the fine print carefully to see if any conditions are excluded from coverage.

Long-term care insurance policies come in many forms, from the most basic to all the bells and whistles. Price is just one factor to consider. Compare policy components in parallel to see which plan might make sense for you. Evaluate the facilities and programs in your area so you can match your expectations for service with what the various policies can cover.

Most plans are tied to the need for assistance with a predetermined number of activities of daily living (ADL), such as dressing, showering, and eating. You’ll pay more if you want a policy that requires fewer concurrent ADLs to activate benefits.

Consider the costs of nursing homes in your area to determine whether you want to buy coverage at the upper or lower end of the spectrum. Choose a daily benefit, or the amount of covered expenses each day, that you can live on, since you are expected to cover the difference.

Most plans have an elimination period, which is the amount of time that must pass before your insurance covers the bill. This “gap” in benefits ranges from 30 to 180 days. You are responsible for 100 percent of the costs before your benefits begin.

Inflation Protection is a common plan rider that can help offset rising costs of care by increasing your plan-eligible lifetime benefits. It’s worth considering whether you can afford the cost of a more generous lifetime limit.

Your financial advisor can help you calculate whether your projected future income and assets can support the cost of long-term care if the need arises. If in doubt, a long-term care insurance policy may make sense. Together you can review your options and choose a plan that will help you reach your long-term goals for financial security.