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Old 11-04-2011, 06:16 PM   #61
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Which word did I take too literally? "Any"? "Human"? What is the general way of understanding his message that I missed?
This thread is about long term care. Lets stick to that and stay on topic.
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Old 11-04-2011, 06:17 PM   #62
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Which word did I take too literally? "Any"? "Human"? What is the general way of understanding his message that I missed?
When someone shares a personal story, it does not demand judging by others. People have different limits, that's why every human is different. Not all knowledge is found in textbooks.......
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Old 11-04-2011, 06:36 PM   #63
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People have different limits, ...
Yes, that's what I said. That's why the universal principle "there is a limit to what any human can do for another" is wrong. It's just not true.
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Old 11-04-2011, 10:40 PM   #64
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Old 11-05-2011, 07:46 AM   #65
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Guys Guys, let us get back to the subject of the post please. Again, does anybody have any experience with this hybrid kind of policy - Fixed Deferred Annuity & long term insurance combined into one.

It requires one large premium upfront now, then in the future it covers your long term insurance if needed otherwise you get the money back in the way of an annuity monthly payments.

I will get to know more from an agent during a phone session on Monday.

Thanks for any and all information.

Regards
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Old 11-05-2011, 07:53 AM   #66
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1) Most long term care is administered in the home (not in a nursing home). Medicaid does NOT pay for in home care (medicaid claims for nursing care must be administered by a state approved facility). If you want the choice of WHERE you get care, you need to self fund, or have LTC. Medicaid will not pay for in home care.
This is not correct - at least in some states; Tennessee being one. Medicaid is administered by each state. In TN, it's TennCare. They offer, in fact they encourage, use of in-home Medicaid services ( the TN program is called "Choices"). The reason they do this is cost; it"s less expensive for the state to provide assistance this way than in a facility. Others may want to check the rules in their state.

As I read through these posts, it's clear there are a lot of thoughtful and caring people struggling with how to manage the inevitable situation for themselves and their loved ones. A program like "Choices" seems like something 'in between' that will help many manage through.
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Old 11-05-2011, 08:28 AM   #67
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Guys Guys, let us get back to the subject of the post please. Again, does anybody have any experience with this hybrid kind of policy - Fixed Deferred Annuity & long term insurance combined into one.

It requires one large premium upfront now, then in the future it covers your long term insurance if needed otherwise you get the money back in the way of an annuity monthly payments.

I will get to know more from an agent during a phone session on Monday.

Thanks for any and all information.

Regards
Be aware that these products have only showed up in the last few years, so very few people will atually have experience with them. They have all the problems of a regular LTC policy plus added complexity that comes with a product with extra features. They do not look like a winner to me, but YMMV. If you do buy one of these, pick a large, highly rated (I typicallly want Aa3/AA- or better ratings on my insurers) insurer that has a good track record for treating policyholders well.
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Old 11-05-2011, 09:14 AM   #68
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I'm sure views my differ, but from I remember when I was reading about them before, that if you are interested in both (a LTC policy, and an annuity), it's really not any better pricewise to get a hybrid combo. The main advantage is the psychological peace of mind that if you die early, that the LTC premiums weren't wasted.


http://www.marketwatch.com/story/new...erm-care-costs
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Old 11-05-2011, 03:14 PM   #69
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The main advantage is the psychological peace of mind that if you die early, that the LTC premiums weren't wasted.


Innovations ease bite of long-term-care costs - Robert Powell - MarketWatch
That's not really true. The extra dollars build into the premium to cover the LTC portion are just as gone as if spent on a dedicated LTC policy. Perhaps a not-well-informed customer may "feel" it differently, but there's really no difference other than in the customer's head.
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Old 11-05-2011, 05:11 PM   #70
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That's not really true. The extra dollars build into the premium to cover the LTC portion are just as gone as if spent on a dedicated LTC policy. Perhaps a not-well-informed customer may "feel" it differently, but there's really no difference other than in the customer's head.

You just reiterated my point. It's more just a psychological advantage than a real advantage.
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Old 11-06-2011, 06:53 AM   #71
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One of the big issues with insurance is insurability. If one's health status changes, they could be locked out of that option.


When one buys insurance that is not a lump sum payment, they can usually drop it later (let it lapse). Most people do not buy LTCi to drop it later. But, those events (health status change that affected insurability and actually needing LTC) are non-deterministic.

One can always purchase a traditional policy (that they would be comfortable holding for the long-term) and see what happens in the insurance industry as they develop new LTC products and options.

IMO - if one takes that approach they:

  1. Locked in the coverage for now.... and reserved the future option.
  2. Even if they decide later there is a better course of action and drop it... they were covered during the period the policy was in force.
  3. Some policies have features that give the owners some sort of consideration for past premiums paid with a rider (although those features seem to have restrictions)... still one might craft an approach to even recover some of those funds.

I believe there are several ways to solve the LTC problem using the current Insurance options available, personal reserves, or combination of them. But things are changing so any decision one makes today might seem less than optimum later.

One other thing people should consider... Medicaid and specifically Medicaid LTC rules are likely to change because of funding problems and the baby boom bubble... which will make the funding issues even worse... especially if one lives in a state with a large number of seniors.

Some states are relatively generous protecting the surviving spouse if Medicaid LTC is used. Other states allow the survivor to keep just enough to lift them out or poverty (and retain the home... assuming it is not a McMansion). Some of those states that are generous could change... they might have to change. I suppose they could increase taxes substantially and leave the rules the same. What do you think?
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Old 11-06-2011, 08:24 AM   #72
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For me, I've have peace with my current approach. I'll just go with a traditional LTC policy, with 5% inflation adjustment. As for the premium increases...I'll just have to grin and bear it (in my situatiion, at least a part of it should be tax deductible each year). If the time comes and I need to go to a nursing home, hopefully I won't end up in a house of horrors.

To LTC or not to LTC is a tough call for many. Either choice, I see the rationale and really can't disagree either way.
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Old 11-06-2011, 12:33 PM   #73
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One of the big issues with insurance is insurability. If one's health status changes, they could be locked out of that option.
IMO - if one takes that approach they:
1. Locked in the coverage for now.... and reserved the future option.
2. Even if they decide later there is a better course of action and drop it... they were covered during the period the policy was in force.
That's a darn expensive "foot in the door." The chances of a 50 YO needing LTC at their present age are tiny. When you buy a LTCi policy with inflation protection, you are paying a huge amount in advance to cover later inflation and expected increased risk. If a person's not sure they are in it for the long haul, they definitely should not buy a LTCi policy with inflation protection.
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Old 11-07-2011, 11:20 AM   #74
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Originally Posted by rkser View Post
Guys Guys, let us get back to the subject of the post please. Again, does anybody have any experience with this hybrid kind of policy - Fixed Deferred Annuity & long term insurance combined into one.

It requires one large premium upfront now, then in the future it covers your long term insurance if needed otherwise you get the money back in the way of an annuity monthly payments.

I will get to know more from an agent during a phone session on Monday.

Thanks for any and all information.

Regards
Yes, I am familiar with the different insurers and their products..... There is one company that takes a lump sum but you can have your money back at any time, only one that I know of does this.

LTC is not an issue that has right answer............
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Old 11-08-2011, 04:43 AM   #75
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That's a darn expensive "foot in the door." The chances of a 50 YO needing LTC at their present age are tiny. When you buy a LTCi policy with inflation protection, you are paying a huge amount in advance to cover later inflation and expected increased risk. If a person's not sure they are in it for the long haul, they definitely should not buy a LTCi policy with inflation protection.
My comment was about insurability.

Here look for yourself.

New York & National Long-Term Care Brokers: LTC Underwriting Guides

Things that can cause people to be uninsurable (or cause them to be rated) may not even be the eventual problem that requires LTC.

Your situation and your decisions and how you deal with it... is probably a little different than others.

Which is often the problem with these discussions... much is unsaid, there are many generalizations, and people make many assumptions.

One thing people overlook are these statistics.

Understanding Healthy Life Expectancy - HALEs - Healthy Life Expectancy

HEALTHY LIFE EXPECTANCY BY GENDER

It is a bit of an eye opener.



It is expensive. If one deals with the issue of funding it... all options are expensive. Anything health care related is very expensive.

I believe there are some risks no matter what approach people take. But there is enough information out there to be able to do a reasonable job of analyzing the options and doing some optimistic and pessimistic projections. Compare setting up a reserve pool to fund it and think about what it means. Essentially, it would need to be invested conservatively for a nondeterministic period, kept liquid in case it is needed and winds up in the estate. If one has a lot of money, that model should work.

Most peoples' plans seem to be to hope they won't need it and consider it to be a catastrophic event that may severely impair them if it occurs. They know about Medicaid and will deal with it if it happens.
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Old 11-08-2011, 08:18 AM   #76
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My comment was about insurability.
Yes. I was responding to your "even if they decide later there is a better course of action and they drop it" idea. I'm just observing that the decision to drop such a policy years down the road would be a huge waste of premiums that had been paid at much higher rates in anticipation of higher future likelihood of needing LTC. Luckily, most folks realize this and are not abandoning their policies. That's one reason insurance companies have lost money in this line of products.
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Old 11-08-2011, 08:43 AM   #77
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Yes. I was responding to your "even if they decide later there is a better course of action and they drop it" idea. I'm just observing that the decision to drop such a policy years down the road would be a huge waste of premiums that had been paid at much higher rates in anticipation of higher future likelihood of needing LTC..
Why would you not view LTCi the same way as term life?

I bought a term life policy to bridge a potential financial gap for my family until we became FI, could "self insure" and no longer had a need for it. I view the LTC policy we purchased at age 52 in the same way. At some point we can probably self insure and will no longer need it. I don't view that as a waste of premium any more than I view my home insurance premiums a waste if it is never destroyed by a tornado or a fire.
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Old 11-08-2011, 09:19 AM   #78
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Why would you not view LTCi the same way as term life?

I bought a term life policy to bridge a potential financial gap for my family until we became FI, could "self insure" and no longer had a need for it. I view the LTC policy we purchased at age 52 in the same way. At some point we can probably self insure and will no longer need it. I don't view that as a waste of premium any more than I view my home insurance premiums a waste if it is never destroyed by a tornado or a fire.
The reasoning does seem quite different. Term covers a catastrophe that may happen now but won't be an issue in the future. Term rates rise with age and when you can safely dump it you do so. LTC covers a catastrophe that likely will take place in the future. Rates are typically flat. The intent (for many - most?) is to avoid blowing the nest egg and going on Medicaid. If you decide to drop LTC part way in your calculation would seem to require that the portion of your nest egg dedicated to LTC is large enough to generate sufficient funds to match the LTC policy coverage and yet should not be sufficient to throw off income (over anticipated lifetime) that would exceed the LTC premiums.

Using myself as an example, LTC premiums are about $2100/yr (self only). Just using a rough 25x rule as a guestimate that would limit me to a $52,400 "LTC self insure fund" -- anything more would cost me more than the premiums. $52K doesn't even approach the unlimited stay care my LTC policy provides. It doesn't even come close to my FILs much more limited 3 year plan. It would seem that the only way to save up a lump sum large enough to replace LTC would be to invest all the premiums from a young age (i.e. skip the LTC), not wait until you have paid many years in and then drop it.
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Old 11-08-2011, 09:33 AM   #79
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Why would you not view LTCi the same way as term life?

I bought a term life policy to bridge a potential financial gap for my family until we became FI, could "self insure" and no longer had a need for it. I view the LTC policy we purchased at age 52 in the same way. At some point we can probably self insure and will no longer need it. I don't view that as a waste of premium any more than I view my home insurance premiums a waste if it is never destroyed by a tornado or a fire.
Right, but if one wanted to buy LTCi to cover a gap like that (say 10 years or so) it would be much less expensive to buy LTCi as a term policy. Of course, they don't sell that, but the closest thing is to buy a policy without the so-called "inflation protection." For example:
Policy type: $200/day benefit for 5 years, purchased by a 50 YO (info below from the Federal LTCi plan, because the info is easily available)
Option A: With the 5% Inflation protection: Monthly premium is $205
Option B: Without the 5% inflation protection (but with the guarantee that you can always buy additional insurance for an individual of your age at that time). Monthly premium: $55.

So, if you just need the policy for a limited time, it would cost much less to buy the "term" policy than the "whole life" policy. In fact, if you just needed the coverage for 10 years, you could buy twice as much (benefit of $400/day), at about half the price and you'd have even better inflation protection for that period. That's why I wrote to chinaco that an individual shouldn't buy the inflation coverage if they didn't intend to keep the policy for the long haul.

I'd thought about going this "term" route, and even keeping the policy for a long time. Exercising the "future purchase option" every few years gets very expensive as one gets older, but if you had reason to believe you were especially likely to need the LTCi, it might be worth buying. In the interim, you're protected, can invest the difference in premiums, and you can see if your larger portfolio grows enough to allow self-insurance to become a reality. As a bonus, if the insurer goes belly-up or raises rates to unaffordable levels, you've wasted a LOT less money.

Buying the LTCi policy without the inflation protection is, in effect, like buying a "decreasing term" life insurance policy. The buying power of the benefit amount decreases over time as a result of inflation (and so does the premium, since it's fixed). Maybe that kind of coverage makes sense for a lot of folks. Unfortunately, the state "Partnership Programs" only approve LTCi policies that have the inflation protection included. Without the partnership "seal of approval," you have to spend down a lot of your portfolio before you'd qualify for Medicaid. OTOH, with a 5 year LTCi policy, you might be able to transfer your assets to a trust and use the LTCi benefits while the 5 year "lookback clock" ticked down, then go on Medicaid.
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Old 11-08-2011, 09:36 AM   #80
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It would seem that the only way to save up a lump sum large enough to replace LTC would be to invest all the premiums from day a young age (i.e. skip the LTC), not wait until you have paid many years in and then drop it.
I have seen personally several cases where folks dropped LTC after paying premiums for many years, had to go into assisted living and nursing home care, and watched their life saving disappear. People want insurance AFTER they need it, frequently that's like closing the barn door after the horses are long gone..........
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