The "golden years" after retirement - a time to enjoy the fruits of a life well lived, unencumbered by commitments and free from worry. Well, that's the sales pitch anyway. The truth is, in order to enjoy the "golden years" without worry, one needs to protect oneself against possible complications during this period. And the complications associated with this late stage in life are mostly health-related.

Few people age without some kind of illness. For the majority of retirees, a major illness or accident will pose sudden financial hardship. With medical and health care costs skyrocketing, an illness or health condition requiring long-term care (LTC) can challenge even the deepest pockets. Those fortunate enough to live with family may need home health aides. For others, to continue living in one's own home may become infeasible. Continuing-care retirement communities, where residents have their own apartments, require an entrance fee followed by a monthly fee. Nursing homes, often the choice of last resort, can deplete one's life savings.

With nursing homes costing between $800 and $3,600 per month, an extended stay could quickly wipe out one's income and savings. CPF's Medicare scheme typically begins to provide benefits at age 60, but only for some skilled care for a short time period, certainly not for the ongoing assistance that many elderly people need. Increasingly, people are buying LTC insurance to guard against such eventualities. LTC policies can cover many types of extended care: at home with an aide (or family member), in an assisted-living facility, or in a nursing home.

Before you take the plunge, consider the following:

• Generally, LTC insurance is for people with enough assets to need protection but that are still inadequate for covering years of care. The general rule is that if you can't afford the premium with ease, you can't afford long-term care insurance. It is the first thing you are going to drop.
  
• Most experts believe the best time to buy LTC insurance is at age 60. Premiums are much lower if you buy in at age 40, but you will be paying them longer. Also, the earlier you buy, the harder it is to forecast what you'll need and what the facilities will be. Healthcare delivery may have changed dramatically by the time you need the benefits at age 75 or 80. You don't want to wait too long, however. The cost of any policy quickly accelerates after age 65. Worse, once you have a serious pre-existing condition, you may be denied coverage.
  
• You need to read the fine print carefully. Whichever insurance company you choose, look carefully at what must happen to trigger your benefits and make sure it's well defined. The best LTC policies today require that you be cognitively impaired or unable to perform two out of six acts of daily living (ADLs) to trigger benefits. The six ADLs are bathing, dressing, moving from bed to chair, using the bathroom, eating, and taking medication. The good news is that with most policies, once you are eligible for benefits, you stop paying premiums.
  
• There are a variety of features you can add to your LTC policy (called riders), most of which cost more. You may perhaps consider purchasing a lifetime policy if you have a family history of Alzheimer's (on average, Alzheimer's patients require eight years of aided care). If you've decided to buy a LTC policy even though you're only in your 40s, find one that can be upgraded to accommodate a changing healthcare delivery system. Younger buyers should consider inflation protection, even though it can double policy costs. Consider purchasing LTC insurance with a spouse or partner, as you may be able to derive some savings there.

LTC insurance is a product that requires some research and comparison shopping. Due to their complexity, it is recommended that potential buyers consult their financial planner, or an insurance agent specialising in LTC policies, on which policies are most suitable for them.