How Ready Are You for Long-Term Care?

Take this quiz to see what you know and don’t know about building a good plan for long-term care needs.

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MetLife sells insurance, lots of it. So, you probably wouldn't expect its corporate mascot, Snoopy, to tell you the reasons not to buy its products. Still, the company commissions a lot of well-conceived research on consumer knowledge about insurance.

Now, Best Life readers are, like Lake Wobegon children, above average. But most consumers get failing grades for their knowledge about insurance and financial services.

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MetLife developed a quiz about long-term care, a phrase that in itself is probably misunderstood by lots of people. It refers not to hospital-based medical treatments, but to professional care needed for people who can't perform the regular activities of daily living—bathing, dressing, eating, getting around, and the like. Alzheimer's victims are major users of long-term care services, but there are many other reasons people need this care.

Most people will require professional long-term care help at some time in their lives, and it costs a bundle. Despite this statistical likelihood, people continue to look the other way when it comes to the question of how they will take care of themselves when they're old. Taking care of today's needs is hard enough, right? So, long-term care insurance soldiers on as a product that many experts recommend but that is owned by less than 10 percent of the eligible population.

MetLife thinks part of the reason is that we don't understand what's in store for us. Its quiz is a couple of years old, but still worth taking. It was based on questions posed to more than 1,000 people between the ages of 40 and 70 who were also the primary financial decision makers in their household. Only about a fifth of the people got seven out of 10 correct—that's a "C" in my book. The average score was about 50, which would be a very gentlemanly "C" indeed.

[See 5 Reasons You Need a Long-Term Care Plan.]

See how you do (the correct answers are in bold, along with the percentages of people choosing each response):

1. Long-term care refers to a situation when a person needs:

Ongoing medical treatment in a hospital (10%)

Ongoing medical treatment at home (19%)

Chemotherapy (1%)

Ongoing assistance with day-to-day activities such as bathing, dressing, or eating (68%)

2. The need for long-term care may be a result of:

Alzheimer's disease (3%)

An accident (2%)

Chronic or disabling conditions (6%)

All of the above (85%)

3. How many households are personally providing care to an adult family member or other loved one?

1 out of 2 (13%)

1 out of 5 (45%)

1 out of 10 (30%)

1 out of 15 (9%)

4. Where do most people receive long-term care services?

In their own home (37%)

In an assisted living facility (28%)

In a nursing home (32%)

In a hospital (1%)

5. What is the 2008 national average monthly base cost for assisted living?

Less than $2,000 (5%)

$2,000–$4,999 (43%)

$5,000–$7,999 (27%)

$8,000 or more (24%)

[See Cost of Long-Term Care Rises in Institutions, Stays Flat at Home.]

6. Transferring financial assets to your family or loved ones would allow you to qualify immediately for Medicaid payment for long-term care.

True (15%)

True, as long as I only transfer money to my children (7%)

True, as long as I am in a nursing home (13%)

False (64%)

7. In the event that you needed extended care due to an accident or to a chronic illness, whether in your own home, in an assisted living facility, or in a nursing home, what type of insurance would pay for your expenses?

Medicare/Medicare Supplement (Medigap) (33%)

Disability insurance (19%)

Health insurance (14%)

None of the above (34%)

8. Approximately what percent of people over age 65 will require some long-term care services at some point in their lives?

20%–30% (17%)

40%–50% (36%)

60%–70% (36%)

80%–90% (10%)

9. Long-term care insurance rates are primarily based on:

Age (18%)

Income (9%)

Family history (1%)

All of the above (71%)

10. A comprehensive long-term care insurance plan covers the cost of:

Nursing home (5%)

Home care (3%)

Assisted living (4%)

All of the above (87%)

Twitter: @PhilMoeller