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Old 08-09-2015, 02:16 PM   #41
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Yes, at least here in Oregon. I've checked with multiple insurance companies and agents, looking for a LTC policy with a three year waiting period and 100% coverage afterwards and none are to be found.

The excuse I get for the lack of such a policy is that being that the average nursing home stay is less than three years then heirs could sue the insurance company for taking advantage of the buyer and selling an unsuitable product. The response sounds fishy to me but that's what I usually get.
It really doesn't exist. Kitces bemoaned the lack of this option, which should be much cheaper.

Agree - fishy response.
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Old 08-09-2015, 02:17 PM   #42
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I have spent considerable time researching LTC policies, and have always come to the conclusion they are simply bad investments. Insurance salespeople always push the peace of mind, and the fear that waiting will only increase your annual premiums.

But a careful read through any of these policies will clearly tell you that regardless of what your annual premiums begin with when you first take out the policy, they can go up by quite significant amounts each year. The salespeople will assure you this is not the case due to state insurance regulations. But clearly reading this thread, you will see that companies are announcing substantial increases to their policies.

Throughout my career I have reviewed and negotiated thousands of contracts. The basic process to review these deals is to start with the question, if I give you X$, what will I get back? Price increases over time are inevitable, but always must be based on either a fixed percentage, or an industry standard CPI figure. Fixed percentages are better because they protect against runaway inflation. But at least CPI gives you some protection against companies who simply underpriced their policies in the early years and now want to sock it to their customer base.

I would never agree to any deal where the company can raise their prices however they wish, and my only recourse is to abandon the policy and lose the money I've invested so far. You are giving them all the leverage, and keeping none for yourself.

These policies are simply bad deals. There is a (weak) argument to be made that people who have just enough savings to live on, but would be devastated by an LTC expense, may need this sort of protection. However, I suspect this is exaggerated by the LTC industry, and not all that valid of an argument.

I'm all for buying homeowners insurance to protect against total loss of your home. But trying to insure against needing an LTC visit with one of these policies is just a bad investment for everyone except the salespeople who earn big fat commissions for selling them.
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Old 08-09-2015, 02:34 PM   #43
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I have spent considerable time researching LTC policies, and have always come to the conclusion they are simply bad investments.
That's a given - LTC is insurance, not an investment. The question that needs answering is whether LTC is good insurance (adequately offsets a financial risk at a reasonable cost) and that is clearly in doubt.
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Old 08-09-2015, 03:16 PM   #44
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After reading about LTC on this forum and researching and reading feedback and claims articles on the net, we cancelled our LTC with Genworth. Had the insurance since 2008, monthly premiums were $207 for both. What did it for us is the fact that many people not only had large premium increases (we never had one) BUT the fact that when they went to make a claim, Genworth and other companies pushed back hard with all kinds of nonsensical "not covered" responses. When we get to the point of needing LTC, say 70's and 80's, the last thing I want is to fight with an insurance company over whether or not we are covered after having spent tens of thousands in premiums. The industry is changing and we have too. While we paid we had insurance...but no more...we would rather be smart now than screwed later. To each their own, but this was a decision for us that allows us to sleep better.
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Old 08-09-2015, 07:32 PM   #45
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All the reasons I'll never buy LTC in a nutshell:

Quote:
Originally Posted by brewer12345 View Post
FWIW, I think it is a terrible product and would never buy it. YMMV.
+1

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Originally Posted by big-papa View Post
We were hit with that last year, but at around 30% from NY-Life. One of the reasons we bought from them is that they had never had a history of rate increases.... Until they did.

...
Ouch.

Quote:
Originally Posted by pb4uski View Post
There is nothing to keep them from raising premiums again.

...
+1

Quote:
Originally Posted by Koolau View Post

...

As in all insurance situations, you have to ask yourself "Do you feel lucky? Well, do you, punk?" (apologies to Clint). Can you cover the downside "risk" yourself or do you feel the need to spread the risk over a larger number of folks.

...
This. And the Punk feels lucky. Here's why:

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Originally Posted by Dog View Post
Not sure I want to hang around if I need a nursing home or the type of care that requires LTCI. I don't want to be hand fed (or tube fed) and planted in front of a TV every day. DH and I are in agreement on that and it is addressed in our medical directives.
...
+1
Emphasis added.

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Originally Posted by OrcasIslandBound View Post
We have had long term care coverage ...over the years, we've been hit with one 70% increase a few years back + several inflation coverage increases...I expect that before we reach the age of 70, we'll be hit with one or two more 50% increases...
Ouch.

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Originally Posted by ziggy29 View Post
This is exactly why I will not buy the product. They encourage you to "lock it in" while you are young and rates are affordable, and then when you get older and more likely to need it, they jack up the rates so you can't afford it any more.
Bingo.

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Originally Posted by mathjak107 View Post
time will tell if all the latest policy's issued were under priced too and if they will pan out that way but it certainly would be a great way to market them...more likely a case of early policy's were way underpriced...
Emphasis added.

Quote:
Originally Posted by mickeyd View Post
When LTCi surfaced 30+ years ago I was in the insurance business and, over the years, I attended dozens of seminars that were hosted by various insurance companies. All seminars offered continental breakfast. Some even sprang for lunch. I remember comments that this was a great product to SELL. I don't recall ever hearing about how wonderful it was for the client.

...
Emphasis added

Quote:
Originally Posted by topsider View Post
...Had the insurance since 2008, monthly premiums were $207 for both. What did it for us is the fact that many people not only had large premium increases (we never had one) BUT the fact that when they went to make a claim, Genworth and other companies pushed back hard with all kinds of nonsensical "not covered" responses. When we get to the point of needing LTC, say 70's and 80's, the last thing I want is to fight with an insurance company over whether or not we are covered after having spent tens of thousands in premiums. The industry is changing and we have too. While we paid we had insurance...but no more...we would rather be smart now than screwed later...
+1
Emphasis added
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Old 08-09-2015, 08:02 PM   #46
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We have had long term care coverage since it was offered to my previous MegaCorp about 25 years ago in our early 30's. It was a portable policy. We had no kids at the time and I thought it would be good for us just to buy that coverage. The bill was $1080 per year for 2 of us. <snip> Unlimited lifetime max coverage. The coverage comes to $7756 for each of us per month max. I don't know how much we've paid over the years for this coverage. Probably ~ $35K or more. I wouldn't dream of canceling it today. I expect that before we reach the age of 70, we'll be hit with one or two more 50% increases. We're both 57 today. Hope this helps. John Hancock Policy.

Very similar story here: bought in my 30s from Megacorp, policy is now with John Hancock. Cost of living adjustments every three years, with one big hike last year due to rate adjustments. Now, at 57, I pay about $1000 per year. I have scaled my policy so that it will cover assisted living/memory care, but not skilled nursing; I will self-insure for the difference if necessary.

Unlimited lifetime max coverage. When the policy moved from Met Life to John Hancock, the JH guy advised me to never let this go. No one offers this anymore.

Why buy before I'm in my 70s and can decide if I need it or am wealthy enough to self insure? LTC insurance isn't old-age insurance: if you have a stroke in your 40s, or are in a horrific car accident you may need LTC. And there's a good chance you'll need if for more than 90 days, (the exclusion period). I don't have family who could drop everything and be my caregivers.

My parents bought LTC insurance about 15 years ago at ages 70 and 75. After a few years they turned down the COLA, deciding they had sufficient assets to self-insure for the difference in costs created by ongoing inflation. That froze their premiums. Their policies had lifetime caps of $154K.

Fast forward: my father paid about $36K in premiums, and only got $28K in payout (he never went into a nursing home, so they covered his home health care at a lower rate). Bad investment? Sure, but he had peace of mind. That's insurance.

My mother paid about $28K in premiums, which were then waived when she went on payout. She has dementia and is in a facility. She, now 87, will likely go through her $154K in 3.5 years, and then we will have to cover the $6K per month until her body finally gives out. Bad investment? Clearly not.

I may follow the same strategy: at some point decline the COLA and decide to self-insure for some portion of LTC expenses.

BTW, NY Life has been fabulous to work with for my parents' claims. No push back at all about whether they should be paid.

Again, remember that LTC isn't just a problem for the elderly. Do you have people who would take care of you now if catastrophe hits?

At least, that's my thinking....
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Old 08-09-2015, 11:33 PM   #47
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Do you have people who would take care of you now if catastrophe hits?
If Sturm, Ruger & Co. can't be called upon, my old buddy Evan Williams will round up the Percocet boys and get the task done in a jiffy.
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Old 08-10-2015, 04:02 AM   #48
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we realized that if we tried to self insure in reality a large chunk of money had to be kept safe ,liquid and secure and not at risk since an extended downturn could wipe out a major portion of that money.

just losing the ability to invest that chunk would negate the fact we could have invested it ,paid a premium and had more left over .

most folks who claim they will self insure do not , they just leave everything invested and hope they do not need it or get caught.

one other factor too is the stay at home spouse makes alot of decisions as well as being concerned for their own survival.

many expenses ,and things for the spouse that needs care gets pushed aside for fear of over spending from their own funds they will need.

all in all when we looked into the insurance there were so many advantages that we had to be foolish not to protect ourselves.

the real deal is all about the stay at home spouse, not the spouse that needs the care..

one major problem with thinking family members will help care for you.

if there are siblings look out.

one always steps up to the plate and the rest step back.

more families have been broken up over this . i had issues in my own family when my dad spent 5 years in a home.

if wives are involved good luck. once they start with why are you helping when your brothers or sisters are not divorce can be in the cards.

usually the one that steps up takes the financial hit as well as in their time and they begin to resent the others.

our estate attorney told us the bulk of all his business now is those who called their plan "self insuring "

in reality there was no plan other than just keep the money fully invested with the rest and hope you don't need it .

now when something happens the stay at home spouse goes in to survival mode and wants to preserve as much of that money that was called self insuring money as they can , usually with only partial success at that point .

we figure we will do the insurance thing until we can't afford it if it gets that high as opposed to the alternatives which end up not really being a plan if the time hits ..

usually there is nothing different in place or ready to go with so called self insuring plans . nothing is ever a problem until it is a problem as they say and it all sounds like a plan until it isn't as likely any elder care attorney can tell you ..
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Old 08-10-2015, 06:16 AM   #49
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we realized that if we tried to self insure in reality a large chunk of money had to be kept safe ,liquid and secure and not at risk since an extended downturn could wipe out a major portion of that money. just losing the ability to invest that chunk would negate the fact we could have invested it ,paid a premium and had more left over . most folks who claim they will self insure do not , they just leave everything invested and hope they do not need it or get caught. one other factor too is the stay at home spouse makes alot of decisions as well as being concerned for their own survival. many expenses ,and things for the spouse that needs care gets pushed aside for fear of over spending from their own funds they will need. all in all when we looked into the insurance there were so many advantages that we had to be foolish not to protect ourselves. the real deal is all about the stay at home spouse, not the spouse that needs the care.. one major problem with thinking family members will help care for you. if there are siblings look out. one always steps up to the plate and the rest step back. more families have been broken up over this . i had issues in my own family when my dad spent 5 years in a home. if wives are involved good luck. once they start with why are you helping when your brothers or sisters are not divorce can be in the cards. usually the one that steps up takes the financial hit as well as in their time and they begin to resent the others. our estate attorney told us the bulk of all his business now is those who called their plan "self insuring " in reality there was no plan other than just keep the money fully invested with the rest and hope you don't need it . now when something happens the stay at home spouse goes in to survival mode and wants to preserve as much of that money that was called self insuring money as they can , usually with only partial success at that point . we figure we will do the insurance thing until we can't afford it if it gets that high as opposed to the alternatives which end up not really being a plan if the time hits .. usually there is nothing different in place or ready to go with so called self insuring plans . nothing is ever a problem until it is a problem as they say and it all sounds like a plan until it isn't as likely any elder care attorney can tell you ..
Mathjack; you nailed all of the salient points. And if one does plan on purchasing policies I don't advise waiting past 60 to purchase as nearly any medical condition that turns up in the very extensive medical evaluation that is done will disqualify the applicant. We purchased at 60 and 62. Policies are for 4 years, 5%/yr cola's, roughly 220/day as of 2015, includes home health care option and the premiums have been raised about 35% in the 7 years that we have owned them. We are keeping them and SWAN. It you can afford the premiums they are worth it IMO.
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Old 08-10-2015, 09:02 AM   #50
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My father passed away last year after spending three years in assisted living/nursing care. The first year he was in a very nice place with a restaurant serving three meals a day. His fee was $4,000 per month. After his ability to function declined, we needed to move him into a smaller facility where they could watch him 24 hours per day. The room was smaller, and the service not quite as nice. The fee there was $3,000.

He did not have LTC, but between his pension and SS, he earned about $3,000 per month. So there was a small deficit that needed to be covered by savings each month, but nothing that was going to devastate him.

Had he purchased LTC, he would have been covered for up to three years of coverage. So even in the more expensive place, that would have represented $144,000 in coverage. So if self insuring for $144,000 is out of the question, then you may have to consider LTC.

However, looking at the retirement figures that most of the forum members have posted over the years, I would suspect that for the majority, a worst case of $144,000 would not bankrupt them. And to get that $144,000 in worst case protection, he would have likely had to pay $30,000-$40,000 in coverage. Taking that money and investing it would likely result in a future value of around $65,000, so the net savings is really not all that significant.

And, many policies have all types of limitations and exclusions regarding when you can receive coverage. For my Dad, we elected to decide when the time was right and where he would reside.
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Long Term Care Insurance 60% premium hike--yikes!
Old 08-10-2015, 12:23 PM   #51
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Long Term Care Insurance 60% premium hike--yikes!

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Originally Posted by brewer12345 View Post
If Sturm, Ruger & Co. can't be called upon, my old buddy Evan Williams will round up the Percocet boys and get the task done in a jiffy.

I think that's the plan for many, but in reality, it likely won't work out that way. My FIL had the first of several strokes the day after his wife died after a stroke. He made one daughter promise not to put him in a care facility should the same happen to him. The stroke caused him to lose speech, but he was working on it and was slowly improving. Two months later, he had his second stroke and could no longer walk unassisted. During this two months, both daughters were assisting him with doctor appointments, both having to travel over 5 hours to get where he lived. He refused rehab and as promised, was brought home. We then spent a week doing 24 hour care while trying to arrange competent in-home care. The daughter who made the promise freaked by the third day and put him in a care facility. The day he was to be transported, he had another stroke that fully took away his ability to walk. He's now in a care facility and we're taking turns have a family member with him at all times while he slowly deteriorates.

His original plan was a S&W to the head. Barring that, since he lives in an assisted suicide state, he would have gone that route. But losing the ability to communicate took that option out. And don't think a friend or family member can do anything. While it's easy to say it's your option out now, think about what you're putting them through and that they'll be the ones doing the deed since you may not be in a condition to do it yourself (i.e., you can't feed yourself).

In any case, the ongoing experience has pushed us to investigate the CCRC option, even though it's hopefully decades away for us. We don't want to put our kids through this
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Old 08-10-2015, 01:07 PM   #52
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The excuse I get for the lack of such a policy [with a 3-year waiting period] is that being that the average nursing home stay is less than three years then heirs could sue the insurance company for taking advantage of the buyer and selling an unsuitable product. The response sounds fishy to me but that's what I usually get.
I agree it's fishy. If enough people keep demanding it maybe they'll offer it. Heck, I might even go for it. If there were concern that people were being sold an "unsuitable product" they'd never allow deferred annuities. In their simplest form, you pay the premium now, they start in X years, and if you die before X years you don't collect.

Years ago (1980s) an actuary I know started his own consulting practice and had to go looking for private health insurance for himself and his family. He specifically wanted a high deductible, around $10,000. There was no such product then.

Now most of us are stuck with high deductibles (not that bad, of course), whether we want them or not. The standard seems to be about $6K. I'd go for that anyway because I'm blessed with good health and that much out of pocket wouldn't break me, but that's not true for everyone.
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Old 08-10-2015, 02:49 PM   #53
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I think that's the plan for many, but in reality, it likely won't work out that way. My FIL had the first of several strokes the day after his wife died after a stroke. He made one daughter promise not to put him in a care facility should the same happen to him. The stroke caused him to lose speech, but he was working on it and was slowly improving. Two months later, he had his second stroke and could no longer walk unassisted. During this two months, both daughters were assisting him with doctor appointments, both having to travel over 5 hours to get where he lived. He refused rehab and as promised, was brought home. We then spent a week doing 24 hour care while trying to arrange competent in-home care. The daughter who made the promise freaked by the third day and put him in a care facility. The day he was to be transported, he had another stroke that fully took away his ability to walk. He's now in a care facility and we're taking turns have a family member with him at all times while he slowly deteriorates.

His original plan was a S&W to the head. Barring that, since he lives in an assisted suicide state, he would have gone that route. But losing the ability to communicate took that option out. And don't think a friend or family member can do anything. While it's easy to say it's your option out now, think about what you're putting them through and that they'll be the ones doing the deed since you may not be in a condition to do it yourself (i.e., you can't feed yourself).

In any case, the ongoing experience has pushed us to investigate the CCRC option, even though it's hopefully decades away for us. We don't want to put our kids through this
Yeah, yeah, I know all that. Really, I figure by the time I am likely to get there all the Boomers will have blown up or rationalized the system and it will look nothing like what it does today.
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Old 08-10-2015, 03:34 PM   #54
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Yes, at least here in Oregon. I've checked with multiple insurance companies and agents, looking for a LTC policy with a three year waiting period and 100% coverage afterwards and none are to be found.

The excuse I get for the lack of such a policy is that being that the average nursing home stay is less than three years then heirs could sue the insurance company for taking advantage of the buyer and selling an unsuitable product. The response sounds fishy to me but that's what I usually get.
I just started looking for the same thing here in GA . So far it looks like there
is no such product anywhere in the US...
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Old 08-10-2015, 03:38 PM   #55
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i think it will be a tough find.

the purpose that most have for the insurance who do not have partnership plans is to clear the 5 year look back period using insurance and shift assets .

that 5 year period could be changed at any time and lengthened . it used to be 3 years prior to 2006 .

this is the main reason trying to self insure for enough time to clear the look back can back fire on you .

all we need is 3 years coverage here in ny in the partnership plan and there is no look back no matter how they stretch it out
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Old 08-10-2015, 03:55 PM   #56
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My husband and I have "self insured" and have plenty of income/savings for the job. But, since you have to lay bare all your finances to a facility, I have wondered if they might charge us more than normal in order to deplete as much as possible before that 3 year statistic comes home one way or the other. Then, bad luck becomes living too long because what was more than enough money might not be enough if nursing inflation on an individual's savings got too big. I may have mentioned this before some time ago but I still wonder why you have to show your finances when you are not applying for Medicaid or some other financial aid. It's kind of like my thinking about umbrella insurance and why wouldn't lawyers use a net worth + insurance add on a law suit amount.
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Old 08-10-2015, 04:13 PM   #57
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we realized that if we tried to self insure in reality a large chunk of money had to be kept safe ,liquid and secure and not at risk since an extended downturn could wipe out a major portion of that money.

just losing the ability to invest that chunk would negate the fact we could have invested it ,paid a premium and had more left over .
I don't get this. Unless someone is 80% stocks, they should have enough in bonds and cash to cover this just with a "normal" retiree AA.
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Old 08-10-2015, 04:30 PM   #58
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<snip> But, since you have to lay bare all your finances to a facility <snip>
Can you please elaborate? My mother has been in two Alzheimer's residential care facilities, and in neither case did we have to "lay bare" all of her finances. We just signed a contract agreeing to pay her monthly fee.

What am I missing here?
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Old 08-10-2015, 05:12 PM   #59
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I don't get this. Unless someone is 80% stocks, they should have enough in bonds and cash to cover this just with a "normal" retiree AA.
at 120k a year in our area i don't know many that can cover much with cash and bonds while the stay at home spouse has to continue on . get caught in a nasty dip that takes a couple years to recover and that can put the stay at home spouse right in the retirement graveyard .

how much outside of what it takes the stay at home spouse to live would you have to keep liquid to have enough to fund both for a few years ? even using more cash and bonds it would be a rediculous amount if you truely were setting money a side to self insure here .

they already pushed the look back from 3 to 5 years . what if you were trying to self insure and they pushed it to 7 or more .

my co-worker who fell off the ladder painting at 55 years old and had a stroke during hip surgery has now been in a home 1-1/2 years with costs approaching 200k . a lot of things like hair cuts and personal things are not included in the home price .
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Old 08-10-2015, 05:20 PM   #60
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at 120k a year in our area i don't know many that can cover much with cash and bonds while the stay at home spouse has to continue on . get caught in a nasty dip that takes a couple years to recover and that can put the stay at home spouse right in the retirement graveyard .
I suppose it depends on how well the early retiree is financed, and their other sources of annual income. If you can cut, say, $360K out of the FI portion of your portfolio today and live on the remaining portfolio OK, then you can self insure. 3 years is what most LTC policies cover. If not, then you have better have a hard look at your alternatives.

Someone retiring on $1M might be in hazardous waters, as with a 50/50 portfolio there isn't much left in bonds and cash to weather a downturn. Someone with $2.5M would not be in as nearly a precarious situation, and it would behove them to do a little rebalancing as the near time expense of a nursing home became clear.
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