Nine in 10 Americans do not have a realistic plan to pay for long term care expenses. Nearly four in 10 will rely on family and friends. Others believe their health insurance coverage or government programs such as Medicare will help pay their long-term care costs.

These are the findings of a new survey by the nonprofit LIFE Foundation. As November is Long-term Care Insurance month, the foundation asked Americans what they would rely on most to help pay for long-term care services if they found themselves in need of assistance with the basic tasks of daily living, such as bathing, eating and dressing. Here's how Americans responded:

Family and Friends (23 percent)
Health Insurance (20 percent)
Medicare (16 percent)
Savings (13 percent)
Social Security Benefits (11 percent)
Long-Term Care Insurance (10 percent)
Medicaid (7 percent)

"These survey results illustrate that most people are confused about how they will pay for long-term care services, which is a scary thought considering 70 percent of Americans who reach age 65 will need such care at some point in their life," said Deb Newman, CLU, ChFC, LTCP, president of Newman Long Term Care and a LIFE Foundation Board Member, in a press statement. "Health insurance will not cover long-term care services and government programs like Medicare and Medicaid have many limitations. That is why it is critical for Americans to take steps to protect themselves with long-term care insurance. It is the only way to make sure you will have the financial means to afford the kind of care you'll need and prefer."

Common misconceptions people have regarding funding sources for long-term care:

Health Insurance - Typically, health insurance only provides coverage for medical care and does not pay for custodial services for people who can no longer take basic care of themselves.
Medicare - Medicare is a government-sponsored health insurance program for older Americans. It does not pay for most forms of long-term care; it only covers short-term rehabilitation after you have been hospitalized for at least three days, are homebound under a physician's care or are eligible for Hospice services.
Medicaid - Medicaid pays for long-term care services, but only for those with very limited assets who fall within their state's determined poverty level.
Social Security - The monthly benefit for the average retiree stands at $1,153, which is a fraction of what most long-term care services cost.
Savings - Though the savings rate has begun to improve, the majority of Americans likely do not have an adequate amount of savings to cover the high cost of long-term care services.

"Many factors come into play when considering long-term care insurance, which is why it's critical to work with a qualified insurance professional," says Newman. "Doing so will ensure that you purchase a policy that best fits your needs and budget."

To help people start thinking about long-term care insurance, the LIFE Foundation answers five basic coverage questions:

How much coverage do you need and for how long? It's important to determine how much the policy will pay for covered services - called the daily or monthly benefit.
How long are you willing to wait for coverage to kick in? The longer you are willing to wait before benefits begin to be paid out, called an elimination period, the more affordable your policy's premiums. Typical elimination periods are 30, 60 or 90 days.
What types of services are important to you? Most of today's policies will cover any number of care preferences and settings, whether services are provided at home by a health aide, offered in an assisted-living facility or nursing home. Find a policy that will be as flexible as possible so that any type of care will be available to you when you need it.
How important is it to have a policy that keeps up with inflation? Inflation protection is one of the most critical components of a long-term care insurance plan because it helps your coverage keep pace with the rising cost of care.
Does your policy qualify for a new state-run Long-term Care Partnership Program? Recently, federal and state governments have begun cooperating on Long-term Care Insurance Partnership Programs. These programs offer asset protection to policyholders with Partnership- qualified long-term care policies. Currently, over half of the states have established or are applying for Partnership programs. For more information, speak with an insurance agent in your area.

Lawmakers are mulling over a provision (The Community Living Assistance Services and Supports (CLASS) Act) that's included in the House health care reform bill, but hasn't received much public attention.

Under the Act, Americans would pay a premium, originally estimated at $65 per month. After they had contributed for at least five years, participants who needed long-term care would be eligible for a modest benefit to pay for a range of services that would help them stay in their homes. In the House bill, that benefit would depend on the degree of incapacity, but would average $50 a day.

Critics like MONEY's Lisa Gibbs say the paltry $50 to $100 a day in benefits wouldn't go far to cover long term care costs.

Jesse Slome, executive director for the American Association for Long-Term Care Insurance, says while the CLASS Act will likely boost independent sales of long term care insurance, the real problem with the measure is that it "creates a new underfunded entitlement plan which won't become a burden on taxpayers for 10 to 15 years (a benefit for boomers ... and a real tax liability for anyone 45 or under today)."

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Most Americans underestimate LTC costs

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