IMO, there are certain circumstances where LTCi would be helpful and the best solution to the LTC problem. The wealthy and the poor don't need it. Middle-wealth folks only need it if there is a spouse or other dependent who can't be protected from impoverishment or there are commitments to heirs which need to be kept and those issues are very dependent on the state in which you reside.
We recently put MIL into a NH. She had few resources and no living spouse or other dependents. She'll be private pay for 9 months (enough to allow us to get her into a "better" home) and then her SS and Medicaid will take over.
A close buddy who I consider middle-wealth shared his plan with me. He and his DW have a net worth of $900k of which $400k is their lovely home in northern Wis. They have an income of about $50k each (SS + pensions). If one is in nursing care, they pay down to the house + a bit over $100k (Wis limit) before Medicaid kicks in. So, at the death of the NH spouse, worse case, the survivor has a bit over $100k cash, a $400k house and an income of about $65k/yr. (His/her own pension and SS + 50% of the deceased's pension.) This is hardly impoverishment. So, they've chosen no LTCi. If the NH stay was less than $400k, the survivor would have more and they will have never hit Medicaid.
In our case, we have a bit more and consider ourselves able to self insure, not leave the surviving spouse impoverished and keep our commitments to pay for the grandkids' college, have a trust for a special needs grandson, etc.
If your particular financial circumstances and the rules of the state where you live dictate that a NH stay for you would leave your DW with near zero assets and income, or if you have made some commitments to heirs you wouldn't be able to keep if you private pay for NH care, then you better look at LTCi despite the issues with the product.
Each situation is different. You have to understand the rules in the state where you live. You have to understand your ability to pay and your ability to shelter resources for the surviving spouse. You have to nail down exactly what commitments you want to make to your heirs and see if you can fund those things apriori (529b, special needs trusts, etc.) with funds not visible to Medicaid.
As samclem said, a catastophic type of policy where the insured pays the first, say, $200k or 2 years, would really fill the bill for many of us. It should be inexpensive since very few would ever collect. And it would protect middle-wealth families from spouse impoverishment. Apparently the insurance companies don't feel they'd make enough money for issuing a policy like that to be worthwhile.
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