Kiplinger's Six Steps to Buying a Long-Term Care Policy

Protect your retirement savings from the potentially catastrophic expense of nursing-home care. Learn how to compare policies and purchase the one that is right for you.

A private room in the average nursing home now costs $203 per day, according to 2005 figures from MetLife Mature Market Institute. That's up 5.7% from $192 per day in 2004.

At those prices, even a brief nursing home stay could take a big bite out of your retirement savings, or destroy it entirely if you need care for several years.

Receiving 24-hour care at home can cost even more -- $456 per day or an average $19 per hour for a home health aide.

One way to protect your savings against these giant expenses is to buy long-term care insurance. But the long-term care business has gone through a tumultuous few years.

Several big companies, such as Ageon and CNA, stopped selling new policies or surprised policyholders with double-digit rate increases.

Despite this turmoil, buying a long-term care policy with a strong company is still the best way to protect yourself against potentially devastating nursing home costs.

For many people in their 50s and 60s, buying a policy becomes a key part of their retirement planning strategy -- especially if they've seen relatives' nest eggs depleted by nursing home bills or their care choices limited by lack of money. Some baby boomers are even buying coverage for their parents if they're still healthy enough to get an affordable policy.

READ: Here's what to look for in a long-term care policy