What is the purpose of long term care insurance?

Essentially, long term care insurance pays the cost of custodial care (not medical care).  Custodial care is the care we need to perform the activities of daily living like eating, bathing, walking, etc.  Neither health insurance nor Medicare pays for these costs.  Statistics show that as life expectancy increases, the number of people needing custodial care will increase dramatically in the future.

How much long term care insurance should I buy?

You should only buy as much insurance as you can afford.  Insurance coverage should be custom designed for your needs and budget.

If I do not have long term care insurance, how will I pay for my custodial care?

Generally your family will bear the burden of your care.  Unfortunately, the commitment is of time and energy as well as money.  If you run out of money, Medicaid (not Medicare) will pay for your custodial care if you are indigent, but only after you have exhausted all your financial resources.