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Long Term Care insurance Question
Old 04-25-2019, 11:49 AM   #1
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Long Term Care insurance Question

Hello...my company is offering long term care insurance. For my age (40) they are quoting $46 per month for $164,250 total coverage.

I am not sure if I should go for it or not. Sorry, Itís hard to comprehend the need that far out and donít have much knowledge in this area.

I know I am providing very limited information but am not even sure what additional information is needed in order for the forum members to advise. So please feel free to ask and I will provide you the information. TIA
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Old 04-25-2019, 12:25 PM   #2
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Definitely look into this. The rate will be way better than anything you could get on a non-group rate. When I was working I was able to get a three year policy with a $100 per day benefit for $540/year. This one time offer did not require a physical. I purposely kept my coverage low, but I have other assets. Think of it like a base similar to social security. Check into what it covers, including at-home care and options to change coverage amounts (increase or decrease).
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Old 04-25-2019, 02:03 PM   #3
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DH was able to get group LTC very reasonably when he would never have qualified for an individual policy. Even after his retirement, they converted it to an individual plan with no physical required and the premiums have stayed reasonable. As PJM stated above, you could consider it a base at quite a reasonable cost.
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Old 04-25-2019, 02:30 PM   #4
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I have LTC for myself and DW that I got through my former employer about fourteen years ago. It has optional inflation adjustments every three years that Iíve always taken. My would cover a little over five years in my area. The prices have not had huge increases.
One thing for you to consider. Not only old people use LTC. An accident or a stroke could hit someone your age, long before youíd think youíre going to need it.
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Old 04-25-2019, 02:30 PM   #5
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Thank you pjs and MB Austin!
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Old 04-25-2019, 03:18 PM   #6
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Before you jump in, check out two things: 1) What is the waiting period before benefits start? Some plans make you wait a month or so; 2) What's the liklihood that premiums will rise significantly as you age.

I calculated your cost for 40 years, and it's only $22K. But if costs start to rise, it may turn out that you would have been better off investing an equivalent amount of money.

Is the $164K in today's dollars, or will this be inflation-adjusted? If it's in today's dollars, that's likely only worth ~1/4 in 40 years...meaning it would only cover ~1/2-year.
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Old 04-25-2019, 03:48 PM   #7
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Thanks Bill. I called Genworth and asked these questions. Wow! What a marketing gimmick. My original quote of $46 was based on the coverage starting after 90 days. Default option was checked as premiums increasing every 3 years. Total coverage was based on todayís dollars.

Now, I changed the options for inflation adjusted payments (5%) and monthly premium remaining the same throughout. My new monthly premium increased to $177.

Plan features:
$150 daily benefit
Home and community care
Nursing facility care

Now it a whole new ball game. ER community to the rescue... always. So glad to be part of this community where people look at different dimensions and perspectives.
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Old 04-25-2019, 04:10 PM   #8
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FWIW (forgot where I read this):
  • Two-thirds of all men, and one-third of all women, age 65 and older will never spend a day in a nursing facility.
  • 10% of men and 25% of women age 65 and older spend more than a year in a nursing facility.
  • 10% of all nursing facility residents will stay longer than three years.
  • More than half of all nursing facility stays last six months or less. The average stay is 18-20 months.
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Old 04-25-2019, 04:33 PM   #9
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Find out if the policy is one of those in your state: The Long-Term Care Partnership Program is a Federally-supported, state-operated initiative that allows individuals who purchase a qualified long term care insurance policy or coverage to protect a portion of their assets that they would typically need to spend down prior to qualifying for Medicaid coverage.

An inflation-adjusted payout (usually a fixed %) is absolutely necessary.

Yes, young people can be found in care facilities.

One of the reasons why men spend less time in nursing homes is that they usually have a younger wife to care for them at home, they enter a care facility at the end of life. Once a woman needs care they rarely have a spouse at home able to care for them.

Whether it makes sense for you financially ... don't know. If you can avail yourself of a health savings account that might be another way to save for that risk.
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Old 04-25-2019, 04:44 PM   #10
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Quote:
Originally Posted by HNL Bill View Post
FWIW (forgot where I read this):
  • Two-thirds of all men, and one-third of all women, age 65 and older will never spend a day in a nursing facility.
  • 10% of men and 25% of women age 65 and older spend more than a year in a nursing facility.
  • 10% of all nursing facility residents will stay longer than three years.
  • More than half of all nursing facility stays last six months or less. The average stay is 18-20 months.
This is true...but the first point is somewhat misunderstood. People (generally) will do anything they can to avoid going into a nursing home. Often, they only go in when other options are financially exhausted. Home health care and assisted living are both potentially expensive options. LTC insurance will help pay those bills so you don't have to go to a nursing home.

Personally, I'd take the 90 day elimination period. (And did on my own LTC insurance. I wish they had a 180 day option, but my state does not allow that. I'm less interested in immediate coverage and more interested in long tail expense coverage.)
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Old 04-25-2019, 04:44 PM   #11
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OP - you didn't mention this but does your employer provide/have disability insurance to sign up for ?

People are 12x more likely to become disabled than die, and you have to live when disabled.
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Old 04-25-2019, 04:53 PM   #12
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Thank you all for the insights.
I do have the HSA account and my plan is to max it out as long as DW and I are employed.
Sunset: My employer offers Long Term disability.
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Old 04-25-2019, 05:04 PM   #13
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Quote:
Originally Posted by Love This Community View Post
Thanks Bill. I called Genworth and asked these questions. Wow! What a marketing gimmick. My original quote of $46 was based on the coverage starting after 90 days. Default option was checked as premiums increasing every 3 years. Total coverage was based on todayís dollars.

Now, I changed the options for inflation adjusted payments (5%) and monthly premium remaining the same throughout. My new monthly premium increased to $177.

Plan features:
$150 daily benefit
Home and community care
Nursing facility care

Now it a whole new ball game. ER community to the rescue... always. So glad to be part of this community where people look at different dimensions and perspectives.


Ninety days is pretty normal. Longer would be worrisome.
I think we pay about $4,200/year for the two of us. It covers ~$500/day each. Weíre both 62 years young. Neither of us would qualify for LTC insurance today, so weíre glad we got it young.
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Old 04-25-2019, 05:42 PM   #14
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Quote:
Originally Posted by Love This Community View Post
Thanks Bill. I called Genworth and asked these questions. Wow! What a marketing gimmick. My original quote of $46 was based on the coverage starting after 90 days.
90 day elimination period is completely normal.

Quote:
Now, I changed the options for inflation adjusted payments (5%) and monthly premium remaining the same throughout. My new monthly premium increased to $177.
Very reasonable. You may be able to decrease the premium by decreasing the inflation factor to 3% if premium cost is a concern.

Quote:
Plan features:
$150 daily benefit
That seems low, but depends on your locale. Check what is usual in your area.

I think 40 is young to get Long Term Care insurance. I'd revisit this some time in your 50s.
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Old 04-26-2019, 05:13 AM   #15
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Some advice and similar stats to above in this article:
https://www.nolo.com/legal-encyclope...its-30043.html

And this may be the source data from HHS:
https://aspe.hhs.gov/basic-report/lo...research-brief

In looking this up, I noticed a ton of articles trying to instill FUD (Fear, Uncertainty and Doubt) from 'bloggers' and insurance companies trying to sell or profit from selling insurance. Including Genworth. Buyer beware.
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Old 04-26-2019, 07:30 AM   #16
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These group LTC policies can be a relatively good deal. Reason is younger people will sign up for them, pay premiums and then cancel when they leave employment. Good to look into.

Premiums can always rise. And they will. Trust me.

Also, LT disability is a coverage almost everyone needs. However policies tied to you work are not that helpful since usually not portable. I would seek a stand alone LTD policy perhaps through a trade organization you are a member of?
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