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Old 03-28-2011, 04:02 AM   #41
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All of this talk about LTC does reinforce one idea.... FIRE... Sooner the better.


The most common situations for LTC seems to be get old, have problems, need hands-on care, degrade, and die!


My concern is not about death... but leaving a healthy aging spouse financially ruined.


Put it like this... if one has the luxury of planning the financials for LTC (has enough money)... better plan to enjoy some of it while one is still young (in relative terms) and healthy!
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Old 03-28-2011, 04:10 AM   #42
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It seems there are two goals... paying for the immediate care (with some combination of funds) and trying to protect assets for the surviving spouse.

An idea that someone had in a previous thread was to use a life policy that provides for the surviving spouse.

I read where some life policies are beginning to be designed with an LTC feature (in the form of a rider).

There could be some liquidity risk if a spouse lingered for a long time since the survivor would not have access to the money till death of the insured.

But Term policies end so some sort of permanent insurance (for each person) might be needed. If you think LTC is expensive... wait till you look at the cost of something like whole life or UL!


Of course... assuming the policy does not lapse... it is a fairly sure bet... because you will eventually die!
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Old 03-28-2011, 06:29 AM   #43
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Just a check: If this financial planner is getting paid as a percentage of your portfolio, he's not an impartial source of advice (since any money you use to pay for insurance reduces his pay). No matter how he gets paid, what he "feels" isn't as significant as what you have determined for yourself, maybe with his help. (You probably knew all that already!).
We are going the same direction (self-insure), but not on the advice of a financial planner but rather the suggestion of our elder law attorney.

Unlike a "financial guy", he has no stake if we do/do not have an LTC policy, since we pay him by the hour, not by the size of our portfolio.

Secondly, unlike most other professions, he (and others in his practice) have had a lot of dealings over the years with folks (many with like net worth such as ours) and the different "life challenges" that come up, including those that required long term care, along with the subsequent costs involved.

In our case (and for our case only, based upon his past experience in the question and our estate situation), he's advised that we self-insure, with the risk of reducing our estate value (to be used for care of our disabled son) vs. current and unknown future costs involved with the product.

It's an easy decision to make for those that have little or many assets. We "in the middle" are certainly the ones who have the hardest time making such a decision (and my crystal ball is cracked).
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Old 03-28-2011, 07:00 AM   #44
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This site may be helpful : How much does long-term care insurance cost? LTCShop.com
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Old 03-28-2011, 08:56 AM   #45
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How does one ascertain the reserves needed to self-insure for LTC?

If you have done the calculations, please share the main points or, if possible, your spreadsheet.

I definitely fall into the no-plan-for-LTC category & have learned a lot reading LTC related threads on this forum.
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Old 03-28-2011, 09:04 AM   #46
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How does one ascertain the reserves needed to self-insure for LTC?

If you have done the calculations, please share the main points or, if possible, your spreadsheet.

I definitely fall into the no-plan-for-LTC category & have learned a lot reading LTC related threads on this forum.
Without a personal, trusted adviser to review your entire situation (including financial, lifestyle, and personal goals), there are some calculators available. How good are they? I have no idea. But since you asked the question:

Long-Term Care Self Insurance : Calculator: Long-Term Care Self Insurance
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Old 03-28-2011, 09:30 AM   #47
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It's an easy decision to make for those that have little or many assets. We "in the middle" are certainly the ones who have the hardest time making such a decision (and my crystal ball is cracked).
Is there a generally agreed upon quantitative definition of "the middle" zone?
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Old 03-28-2011, 09:41 AM   #48
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Is there a generally agreed upon quantitative definition of "the middle" zone?
For me (and me alone) it would be those who can't afford to pay the cost of a long-term care insurance policy with unlimited benefits, yet their assets are too high to qualify for Medicaid to pay their long-term care expenses.

As far as total assets targeted for possible long term care (e.g. self-insure)? For each person/family, it would depend on their specific situation so I would not put a specific dollar amount on assets to say if you should/should not get LTC. Those who have strong support from family/friends to keep them in their home and those affected that don't need a hospital setting (i.e. they can get support from a visiting nurse organization) could get by with less, IMHO.

Those that are "on their own" without that support would probably go to a nursing home/skilled nursing facility earlier - which would certainly cost more.
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Old 03-28-2011, 09:55 AM   #49
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How does one ascertain the reserves needed to self-insure for LTC?

If you have done the calculations, please share the main points or, if possible, your spreadsheet.

I definitely fall into the no-plan-for-LTC category & have learned a lot reading LTC related threads on this forum.
If I'm thinking of buying the typical 3 year maximum benefit policy, then it seems the simple calculation is (daily benefit) x 3 x 365. For a $200 daily benefit, that's $219,000.

I need to think about inflation in LTC costs, so if I set up a $219k fund today I also need to keep the investment earnings inside the fund to offset the increasing cost. A typical "inflation" provision in LTC insurance just increases the max benefits by 5% per year. So if your fund can earn a nominal 5% you can stay even. Of course nobody knows how fast real costs will increase.

If I'm single and own a $219k house, I could assume that I'll sell the house to pay for my LTC needs. That seems kind of logical as the biggest LTC costs are generally incurred when people are living in facilities, not at home.

I do this math and figure that I can self-insure the first 3 years of LTC needs. However, that still leaves the risk of a very long disability. Like Sam, what I really want is the policy with the 3 year waiting period and no cap (a lifetime benefit). But such policies aren't available. Last I checked, the premium rates for lifetime benefits with typical waiting periods were going up much faster than the premium rates for limited periods. Insurance companies are just like me, they don't want the open-ended risk.
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Old 03-28-2011, 10:04 AM   #50
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Without a personal, trusted adviser to review your entire situation (including financial, lifestyle, and personal goals), there are some calculators available. How good are they? I have no idea. But since you asked the question:

Long-Term Care Self Insurance : Calculator: Long-Term Care Self Insurance
Nice little calculator - thanks.

According to it, I believe I am a good candidate to self insure, assuming that our pensions and SS don't evaporate and our LTC fund and existing investments don't totally collapse either.

As was said earlier in the thread, everyone's situation is different, but we are very fortunate to have a lot of funds supporting a high income that we can easily cut back by 60% should we need to.
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Old 03-28-2011, 10:32 AM   #51
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My grandfather spent about 5 years in a nursing home. The cost of the nursing home was split in two parts...

In both cases, the impact of LTC on their estate was minimal.
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In the UK there are NHS and private LTC facilities. The NHS facilities are means tested ...
Thanks for the info. I wondered how they handle this issue. It appears financial assistance is available and eligibility requirements may be lower than in the US.

Here, I understand that an elderly person must exhaust all his asset before assistance is provided. This sounds reasonable, in that a person should take care of himself to the furthest extent possible before public assistance is given. However, I have heard of people making efforts to dissipate all their assets so as to appear "poor" to get help. What was intended to be fair is now no longer so.
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Old 03-28-2011, 12:00 PM   #52
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However, I have heard of people making efforts to dissipate all their assets so as to appear "poor" to get help. What was intended to be fair is now no longer so.
I'm sure that most people will at least think about this when they see assets disappearing into the nursing home. There are attorneys who will help middle class people "look poor" according to medicaid rules.

The gov't isn't ignoring this. Medicaid has "look back" rules that count assets that you gave away in the last 3-5 years as if you still own them. They also encourage people to buy LTC insurance through the LTC "partnership" programs.
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Old 03-28-2011, 01:08 PM   #53
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The gov't isn't ignoring this. Medicaid has "look back" rules that count assets that you gave away in the last 3-5 years as if you still own them.
This is similar to the UK. I believe that when DW's parents transferred the ownership of the house to the children that the "look back" window was 10 years.
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Old 03-28-2011, 01:36 PM   #54
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Have LTC insurance. Every year when I pay the premium, I say "Ouch" but then say that's what insurance is for. To cover possible catastrophic events to my finances. No way would I be able to pay for LTC without LTC insurance.
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Old 03-28-2011, 01:59 PM   #55
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My concern is not about death... but leaving a healthy aging spouse financially ruined.


I agree with this statement. This is what happend to my dad. My mom's care drained all their savings and he had very little left for his care. Fortunately, he was really only ill for a year, so didn't need the full time care but for about 9 months, and my brothers and I supplemented his Soc. Sec. and what we could sell of his to keep him going. I've never been so stressed out over anything. I guess that is why we are going to apply this year, for the peace of mind. If I hadn't been through it personally, I wouldn't have worried. Any amount of help would have been a blessing.
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Old 03-28-2011, 02:04 PM   #56
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Before you plunk down the money for long term care you have to check your risk factors . If anyone in your family has had Alzheimer's , Strokes , Debilitating Neurological diseases I would sign up. No one in my family and I have a large family have ever spent more than two months in a nursing facility and the only one that did was my grandfather so as of right now I am self insuring.
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Old 03-28-2011, 03:12 PM   #57
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My concern is not about death... but leaving a healthy aging spouse financially ruined.
By the time I reach 85 I will have spent about $100K for LTC for DW and I (policies have no limit on how many days/years of care). That is a lot of money. But to cover one of us for one year of care, the calculator estimated $275K. Five years would really begin to hurt. Neither scenarios is very likely but I chose the insurance route just in case. An early, extensive illness could have been (still could be) devastating. I want to insure to the extent practicable that neither of us will ever be bankrupted by health care costs and that our kids get a decent pile if the world doesn't crash. To me, paying for approximately 6 months of care that may not be needed over time is preferable to losing it all if I self insure and bet wrong. We used to carry large life policies when we were young as well. The odds were greatly against using them but the impact if one of us had kicked would have been large.
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Old 03-28-2011, 03:22 PM   #58
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We opted for LTC insurance for the peace of mind. Of course, the insurance company in its absurd "wisdom" agreed to underwrite my wife but turned me down due to my chronic disease. That disease will likely kill me before I would need long term care. Yet my wife has had 2 back surgeries and her entire family lived to very ripe old ages, so she will likely need LTC at some point in the distant future. I guess they figure the premiums they collect will add up to more than they'll ultimately spend on her LTC.
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Old 03-28-2011, 05:16 PM   #59
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Having just been through this with my mom, definitely find out what is costs for a nursing home in your area. My mom lives in the SF Bay Area and even a room with 3 people costs close to 100K by the time you add on all the services (they nickle and dime you). Also, it's pretty rare that someone goes in and just stays there. They get sick - go back to the hospital, then back to "re-hab" which is all on the tax payer. Only when the re-hab ends do you start paying again.

The one catch is that a nursing home will not hold the bed for your loved one so if you want them back in the same room, you will have to pay the minimum care figure.

My sister and I really love the board and care - it is so much better - personalized, home cooked meals, etc. The only thing that is really different is that they do not do medical care. So you have to take your loved one to the doctor, pick up the meds, etc. And if your loved one needs an IV or something like that, they will need to be transferred back to the hospital.
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Old 03-28-2011, 05:34 PM   #60
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The advantage of meds in board and care is that you aren't obligated to use an institutional pharmacy (read expensive, won't dispense or deliver on weekends). LTC facilities are REQUIRED to use only institutional pharmacy packaging meds. It is possible to have routine meds mailed to the board and care facility, pick up at the pharmacy otherwise.

Physicians call on patients in nursing homes usually only if it is convenient for THEM. Otherwise I had to transport my frail elderly relatives to the clinic. For many years Mom was in a LTC on a hill about 6 blocks from her physician's office. On a couple occasions we decided to roll her there, the weather was great and she was up for an adventure. It was not easy to roll her home but I needed the exercise.

No easy fix for the IV issue.
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