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How many of you have or are planning to have long term care insurance?
Old 03-26-2011, 11:20 PM   #1
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How many of you have or are planning to have long term care insurance?

We will apply this year. I'm not sure we would have done so, if we hadn't seen my parents' nest egg disappear after my dad paid for 4 years of nearly full time care for my mom to stay home with Alzheimer's. (It was a little less expensive than a nursing home, which he would have had to pay for anyway and it was so much nicer at home with consistant caregivers.)

Then my dad had to have caregivers almost around the clock his last year (also at home until he passed away with bladder cancer.) The last year, my brothers and I had to supplement his income frequently, because he had run out of money and social security only paid his house expenses and food. (He had a huge home.) It would have been much easier with some long term care insurance and they could have afforded it.
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Old 03-27-2011, 01:06 AM   #2
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I've struggled over the decision to get LTC insurance. I'm thinking that I'll be leaning to getting it for the same reason as you. I don't want my spouse to suffer because I ended up needing LTC. If I were to become single, I'd have to re-think continuing it.
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Old 03-27-2011, 01:44 AM   #3
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Anyone who has been in your situation sees the need for LTC insurance. People who haven't been there often think the cost is higher than the benefit (until it's needed, of course). Can't tell you how many people I've talked to with parents that have/had Alzheimer's and the cost of care in a nursing home or trying to take care of the parent on their own (lost wages) had a massive impact on their financials.

The longer you wait to buy an LTC policy, the less compounding interest you will have and the higher the premiums will be as you get older/less healthy. A 50 year old with a $6k/month benefit and 5% compound interest will have a $12k+/month benefit by age 65....the cost for that type of benefit at age 65 would be huge for a brand new policy, even if they were still healthy. If you wait too long, you may be unable to qualify at all if your health changes.

Make sure you take some time to understand how LTC benefits work and which benefits are the most essential. Also make sure to comparison shop since the cost of LTC insurance can vary by a huge amount...some companies are double or more than the cost of others for the same benefits.
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Old 03-27-2011, 04:08 AM   #4
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This is one of those topics that no one really wants to think about... like death. While I am not suggesting that one dwell on it endlessly, a little thought and preparation can help. Having gone through this with two parents was an eye opener! While it was very stressful, I learned a lot.

Financial Planning for LTC is essential if you have a certain level of assets. Not just for the person that might need care, but for the financial well being of the surviving spouse.

One thing that many people overlook is the possibility (albeit lower probability) of needing LTC at a younger age. This could absolutely financially ruin one if handled the wrong way.

Often people equate LTC to LTC Insurance. It is really only one part of the overall plan. It is the part around funding.... there are other considerations. You should have a plan that includes factoring in asset protection, in-home care... certain types of homes may accomodate care better (or more easily be retrofitted). An example would be a ranch versus a two story home. If you wait till the event occurs (if it does), you will just be swept along in a crisis.

Medicaid has rule and they vary from state to state. Some states allow the spouse to keep more assets and income than others. This is perhaps one of the biggest things people overlook. You might be financially better off in a neighboring state. Of course, the rules are always subject to change so one needs to stay aware.

I have read that in some states, couples get a divorce to split the assets so the survivor can retain more. Otherwise, they would only be allowed by law to keep the house and a small amount of cash/securities.. the amount they can keep in some states is dismal!!!

Many states have a program where if your LTC plan meets a certain minimum, they will provide a backstop on certain limits to the plan if it is exceeded. Thier goal is to get people to purchase LTC insurance to defray the states costs. You would need to research this.

There are guidelines to help one understand the cost and income levels where it makes financial sense to purchase LTC. Of course one can go self insured if they have enough resources.


Oh... we have LTC insurance. Got into a group plan from work. Thankfully it is relatively low cost and has a provision for in-home care and inflation protection. Even if the inflation protection does not keep up with the real inflation rate of LTC... it will defray much of the cost!


Risk mitigation costs. How much depends on your situation and the decisions you make. I am not going to go into it because the insurance phobes on this forum will come out in droves about why it is a bad idea... The fact is most of them do not have a plan other than hope.... hope it does not happen. They are taking the risk and the full ownership of the financial impact if it occurs. That is their right and their decision... they own it! But it does not mean it is the right decision for others.

BTW -- often when you see people vehemently arguing a point... they are speaking in the context of themselves... now mind you they may or may not have a plan. Often they are just trying to rationalize to themselves their own decisions. If someone states something that is counter to their personal decision (or avoidance)... they go into defense mode. do your research, do the analysis... get help if needed, and make a decision that is appropriate for you, your spouse, and your family. Do not assume you are going to get any expert advice on this forum!!! At best... it is an opinion. Including this post!
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Old 03-27-2011, 06:26 AM   #5
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Originally Posted by dgoldenz View Post
A 50 year old with a $6k/month benefit and 5% compound interest will have a $12k+/month benefit by age 65....
I'm just trying to understand LTC - what is the "compound interest" about ?

Thanks !
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Old 03-27-2011, 06:29 AM   #6
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I'm just trying to understand LTC - what is the "compound interest" about ?

Thanks !
He means that the younger you are when you start an LTC policy the more times the insurer will be able to jack up your premiums.
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Old 03-27-2011, 07:20 AM   #7
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If you have not already, check out Long Term Care Update 2010. It starts with links to a half dozen recent threads on this topic and has some useful information/opinions.

IMHO, you may not need to buy LTC insurance - but you definitely need an LTC PLAN.

It is mighty hard to tell in advance if I am right, but for me, I think self-insuring is the best way to go.
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Old 03-27-2011, 07:28 AM   #8
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DW and I enrolled when the Federal program was started about 8 years ago. We also enrolled DW's father which was good since he is using it heavily right now.
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Old 03-27-2011, 09:34 AM   #9
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I still do not understand the "need" for long term care insurance. I understand that long term nursing or in-home care can be expensive, but shouldn't that be part of financial planning, not just a risk to insure against. The way these policies are priced, and the high likelihood of needing some kind of care, means that a policy will cost a significant portion of the potential benefit, plus in most cases I need to give the insurance company nearly unlimited ability to raise premiums in the future while the benefits remain the same. These seem more like bets on cost sharing than insurance. In fact, policies I've seen all had some limitation on the term of the "long term" care, so I'm not even insuring against the very much less likely case of spending decades under care which would be a more easily justified low likelihood but highly expensive incident for which I might like to share risk, but mostly they simply cover up to a few years under nursing care at the expected cost (in advance) of a few less years under nursing care with allowance to increase that cost whenever they like.

I insure my house against fire and other damage because these are low likelihood events that would have large financial consequences. I think one of the major problems with the health insurance market is that these products are not insurance in the same way, instead they mostly try to provide "insurance" for commonplace occurrences, so have to charge a premium that on average is large enough to cover all the expected outlays plus huge paperwork costs for the insurer and providers, and maybe a little profit besides. These are more like a cost sharing agreement than straight insurance and while there are some catastrophic care policies in the market, there are also significant distortions of medical costs and pricing caused by the prevalence of the usual low deductible health care insurance.

If the likelihood of needing long term care in my lifetime is really as high as insurance companies and their salesman in these markets claim (up to 1 in 2 people I've heard) then shouldn't I plan to have enough assets in case this happens to me, rather than pay in advance half or more of the cost of such an occurrence plus overhead, essentially betting the insurance company that my care will cost more including all the overhead than they project. I don't insure against divorce, a similarly likely and potentially expensive proposition. The idea that I might spend thousands of dollars a year so that in the event of a divorce I would not lose half my assets (and similarly my spouse would require a corresponding policy) is so silly that we laugh at the notion.
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Old 03-27-2011, 09:45 AM   #10
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He means that the younger you are when you start an LTC policy the more times the insurer will be able to jack up your premiums.
I know we must be the exception. DW and I got LTC insurance through CNA 12 years ago (ages 52 and 51) and the premiums have stayed the same every year so far ($1800/yr. combined). We have coverage with a 180 day exclusion period, no lifetime coverage limit and 50% coverage for home health care. Benefits started at $100 per day twelve years ago with an automatic 5% escalation per year, so something around $175/day now. That would not cover the full cost of a nursing home today but would make our out of pocket costs ease to handle from our other assets.

My thinking, at the time was that we should have coverage for a situation that would protect our nestegg in case of a disaster, allow it to grow over time to the point we could self insure if premiums became too burdensome. So far, have not had to make that decision.
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Old 03-27-2011, 09:52 AM   #11
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We can get a plan through my husband's work with good group rates, so we will apply in the next month. I understand that it is possible to self insure if you have enough money. In our case, I think having it would bring peace of mind. It was so stressful trying to help manage my parents' finances and getting down to the point of having to sell his antiques and artwork in a down market to get by another month or two- and that was with the 4 of us children also contributing.
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Old 03-27-2011, 09:55 AM   #12
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My spouse and I both have LTC insurance. Wouldn't be without it - just like we wouldn't be without homeowner's insurance and auto insurance. It's all about the risk. The risk may be minimal the house burns down. The risk may be lower for a car accident in our rural community than in a mega city. One of us may have a stroke tomorrow or never. When the time comes and the "whatever" happens, we want insurance to be in place. That way we can be focused on what it takes to get back to "normal" as fast as possible without having to also focus on the money.

As with any situation, you always hope for the best and plan for the worst.
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Old 03-27-2011, 10:05 AM   #13
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If the likelihood of needing long term care in my lifetime is really as high as insurance companies and their salesman in these markets claim (up to 1 in 2 people I've heard) then shouldn't I plan to have enough assets in case this happens to me . . .
Let us know if you find any solid company selling a LTCi policy that is true insurance (e.g. begins paying after a 2 year elimination period, etc). I haven't found such a policy. This, plus the inability to get a gaurantee against rising premiums, has kept us from buying a policy. There's just nobody offering anything that is appealing. Face it--we're a small market demographic. Truly rich people don't need a policy like this, and most of the rest of America can't be bothered to save sufficient funds to cover their own modest retirement, let alone having enough money to, in a pinch, cover $120K in nursing home costs for one spouse. The few remaining folks wanting to buy true LTCi against a calamity are people with sharp pencils and good spreadsheet skills. They are an agent's nightmare.
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Old 03-27-2011, 10:14 AM   #14
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Neither my grandparents, nor mother had LTC, all got sick, and we did fine. So I do think it has to do with how you can and plan to manage care.

My mom has vascular dementia, has been pretty bad, but able to stay home until about 6 months ago when she had a major stroke. What we found are all kinds of new ways to care for elders that cost less than full nursing homes. My mom is in what is called a "board and care". It is a private home where someone takes care of her (along with 3 other ladies with strokes) for a reasonable cost (nurse). We love this option. It costs maybe 30K a year, so we pay little above her SS and IRA withdrawals. (actually paying from her estate)

We have been working on a plan for this reason.
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Old 03-27-2011, 10:14 AM   #15
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We can get a plan through my husband's work with good group rates, so we will apply in the next month. ...

That is what we did. Our group plan has good/flexible coverage with a strong company and the premium is low... very low compared to what we could purchase it on the open market... and we are both healthy. Our cost is about 30% what it would cost for a comparable policy on the open market.

When I saw what it would cost... we jumped on it back in our late 40's. It was so cheap that it made sense even at that age. I wanted to get in the group plan just in case Mega Corp stopped offering it. But they still offer it to employees.
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Old 03-27-2011, 10:18 AM   #16
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We figured that my dad paid over $350,000 for first part time, then later round the clock care for my mom. Then during his illness, another $75000 was paid out. Alzheimers can really suck the money down. Had it not been for that, they would have been fine.
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Old 03-27-2011, 10:49 AM   #17
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I have thought about LTC insurance but have decided to take a pass on it. I am single, and I feel that I have sufficient funds to live out my life with either privately hired in home help or a really nice assisted living/personal care home or even a nursing home. Of course, I do not know what the costs will be for any of these options in the future, but I am resolved to take my chances rather than wrangle with insurance companies any more than I have to.
My family tree is mainly one of deaths by cancer (in a matter of months) or sudden heart attack (dead within the hour). My oldest living close relative is my 94 year old maternal aunt who is in great health...she still drives younger friends to their doctor's appointments and brings them home cooked meals! An aunt and an uncle did live in B & B-type assisted livings towards the end of their long lives but for a period of less than two years in both cases. Alzheimer's has never surfaced in the genetic pool nor has any devastating long-term wasting disease with the disturbing exception of an uncle who died at 70 with Parkinson's. He lived at home, though, until he got pneumonia and died after 11 days in the hospital (he got around with a walker and was pretty much self care except for domestic stuff like cleaning and laundry and cooking).
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Old 03-27-2011, 11:04 AM   #18
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I know we must be the exception. DW and I got LTC insurance through CNA 12 years ago (ages 52 and 51) and the premiums have stayed the same every year so far ($1800/yr. combined). We have coverage with a 180 day exclusion period, no lifetime coverage limit and 50% coverage for home health care. Benefits started at $100 per day twelve years ago with an automatic 5% escalation per year, so something around $175/day now. That would not cover the full cost of a nursing home today but would make our out of pocket costs ease to handle from our other assets.

My thinking, at the time was that we should have coverage for a situation that would protect our nestegg in case of a disaster, allow it to grow over time to the point we could self insure if premiums became too burdensome. So far, have not had to make that decision.
+1

At the same ages we got similar coverage (90 day exclusion period, 3 year lifetime maximum benefits, 100% coverage for home health care) from CNA. Like Grumpy, we've seen no premium increase over the past 11 years (the first 10 had a guarantee of premium, ours is $1,200/yr combined) but with all the news I hear about huge jumps in cost, my heart rate increases when I open each year's bill.

This forum has seen a lot of discussion of the pros and cons of LTC insurance over the years: (FAQ archive): Long-term care (LTC) and LTC insurance
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Old 03-27-2011, 11:50 AM   #19
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+1

At the same ages we got similar coverage (90 day exclusion period, 3 year lifetime maximum benefits, 100% coverage for home health care) from CNA. Like Grumpy, we've seen no premium increase over the past 11 years (the first 10 had a guarantee of premium, ours is $1,200/yr combined) but with all the news I hear about huge jumps in cost, my heart rate increases when I open each year's bill.

This forum has seen a lot of discussion of the pros and cons of LTC insurance over the years: (FAQ archive): Long-term care (LTC) and LTC insurance
I have a policy with Unum. Part of a group plan with my old employer that was portable when I retired. The premiums were only guaranteed for 3 years, but so far so good. No increases and I'm into my 8th year. But, it won't surprise me to see dramatic increases as I get closer to the age of actually needing it.
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Old 03-27-2011, 12:07 PM   #20
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What we found are all kinds of new ways to care for elders that cost less than full nursing homes. My mom is in what is called a "board and care". It is a private home where someone takes care of her (along with 3 other ladies with strokes) for a reasonable cost (nurse).
How interesting! I hadn't heard of "board and care".

Something else that may mitigate the costs of long term care is the possibility that the care may not actually count as long term, if it is something that can be treated, so that regular medical insurance may cover it. Medicare with supplemental insurance covered substantial nursing home ("skilled care facility") expenses for my mother after a stroke, because she was capable of intensive physical therapy.
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