How much will payouts be?

As with all insurance, the payouts you receive are a reflection of the coverage you choose. Bear with us here; it's a bit complicated.

When shopping for insurance you - along with your insurance agent - typically start out by figuring the daily cost of nursing home care. Next, you need to decide how many years of that coverage you would like. The bigger the number, the more expensive your policy. As a rule of thumb, the average amount of time spent in a nursing home (among folks who find themselves needing that care) is about three years.

So let's say you want to plan for care at $220 a day - the current national average - and you want the coverage to last four years. That's $220 x 1,460 days, or $321,200. That would be your lifetime benefit.

That doesn't mean you will be limited to drawing $220 a day for four years. Most plans just let you draw on the lifetime benefit: You can draw it down over 10 years or 10 months. That's your decision. All the company cares about is that your total lifetime benefit will not exceed that $321,200.

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