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Old 03-10-2014, 11:29 AM   #41
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Thanks Carlos. I have Northwestern Mutual Life, and I'm trying to determine if any of those discussed is related to them.
Northwestern Mutual Life is a good company. I have heard that they have not increased rates on their customers. However, I have also read that they are one of the more expensive policies compared to others too even with the rate increases. We will always have to be concerned if there will be a rate increase. New York Life has also not had rate increases, but I understand that they are about to ask, if they have not already, to increase current LTC policy holders's premiums. It seems like no one is safe.

My Genworth policy is a California partnership policy. California has not allowed Genworth to raise the premiums on those policies yet, not that Genworth hasn't asked. They have allowed Genworth to raise premiums on some individual and group policies.
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Old 03-10-2014, 05:05 PM   #42
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We found there were huge differences in costs of nursing home care based on geography.

My FIL had lived with us (in California) for several years. My MIL and FIL returned to Kentucky where they owned a home. But they have family and spent most of their life in Philadelphia. When it was time to put my FIL in a home we researched homes in all three locations.

Surprisingly, California was not the most expensive. Philadelphia was. We paid about $6k/month in Kentucky, and there were similar prices in non-coastal areas of San Diego county - definitely under $7k. Philadelphia had horrid places for $8k - and nice places for closer to 10k.

Since we were dealing with a surviving spouse issue - I did the research on what assets can be set aside for the spouse not in the home if medicaid kicks in. It varied a bit from state to state - but the guidelines are federal. Since it's a federally funded program, managed by the individual states, there is some leeway for how much must be spent down, it varies from state to state. I believe the lookback period for transfer of assets is set on the federal level. Spend down for medical care is one thing. Gifting/ transferring/buying a more expensive house is a different thing. It was a factor when we were looking at the out of state options for nursing home... We'd have had to spend the same or less on the new home for MIL as we got for the old home - or it would have triggered the lookback.
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Old 03-10-2014, 05:28 PM   #43
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My policy with CALPERS went up 85% last year. What I decided to do was to cap the policy at current benefits for a maximum of 10 years ( Previously 5% annual inflation + unlimited time coverage) in exchange for freezing the premiums. (I hope the freeze holds). Like many here I came to the conclusion that since this is really not catastrophic true insurance it didn't make sense to add insult to injury by agreeing to the 85% increase with no assurance that more increases won't be coming. but at the same time since we have paid for the policy for over 15 years it didn't feel right to just walk away.
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Old 03-10-2014, 07:15 PM   #44
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Current costs in a dementia facility for my father is about $6,700 per month. Generally the yearly increases over the last three years has been in the 3.5% range. This is in CT.

He purchased LTC, and it has been the best investment he made. That having been said, wife and i are self-insuring on this.
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Old 03-11-2014, 09:44 AM   #45
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For people who are interested in how costs vary geographically, MetLife does an annual survey.

They found, for example, that the most expensive state for nursing homes was Alaska, at $687/day. The lowest was Oklahoma outside of Ok City and Tulsa, for $147/day.
https://www.metlife.com/assets/cao/m...care-costs.pdf
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Old 03-11-2014, 10:17 AM   #46
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A prolonged expensive stay in a NH is a greater risk for a woman than a man. Every NH I have visited has a very low percentage of men in residence. Men just don't seem to last very long once they need NH level of care. Truth be told odds are with the LTC insurers as the average stay is brief.

I am thinking for a single male like myself LTC insurance would be a losing bet vs paying for the cost a short stay.

This study says the median length of stay is 5 months and only 3 months for males.

Length of Stay in Nursing Homes at the End of Life | GeriPal - Geriatrics and Palliative Care Blog

This article says 79% of males and 74% die in the first 12 months of being put in a NH.

Average Length of Nursing Home Stay | ElderWeb

If you can afford 1 year in a NH you are probably good. You also go to the head of the line for admission vs. someone who is dependent on Medicaid to fund the cost.

I have had 4 relatives enter a NH, the longest stay was 5 months.
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Old 03-11-2014, 11:23 AM   #47
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This article says 79% of males and 74% die in the first 12 months of being put in a NH.

Average Length of Nursing Home Stay | ElderWeb
The data in this web site is from 1999. Not very current, but probably close.
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Old 03-11-2014, 12:19 PM   #48
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A prolonged expensive stay in a NH is a greater risk for a woman than a man. Every NH I have visited has a very low percentage of men in residence. Men just don't seem to last very long once they need NH level of care. Truth be told odds are with the LTC insurers as the average stay is brief.

I am thinking for a single male like myself LTC insurance would be a losing bet vs paying for the cost a short stay.

This study says the median length of stay is 5 months and only 3 months for males.
But the next line down says the "the average length of stay was longer at 14 months due to a small number of study participants who had very long lengths of stay".

When I'm buying auto liability insurance, I don't think about the median claim, which might be $5,000 dollars. I don't even focus on the average (mean) claim, which might be $14,000. I know I can handle those out of cash flow. I think about the few unusual claims that are over $100,000. The big gap between the median and the mean tells me something about the distribution.

Note that these statistics are for single periods of stay, and nursing home only. Some of these people had extensive home care or assisted living before entering the nursing home. Some were in the NH more than once.

Here's another source of data SOA - Society of Actuaries - 1984-2007 Long-Term Care Intercompany Report & Tables
The continuance data begins on page 31.
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Old 03-11-2014, 12:35 PM   #49
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But the next line down says the "the average length of stay was longer at 14 months due to a small number of study participants who had very long lengths of stay".

When I'm buying auto liability insurance, I don't think about the median claim, which might be $5,000 dollars. I don't even focus on the average (mean) claim, which might be $14,000. I know I can handle those out of cash flow. I think about the few unusual claims that are over $100,000. The big gap between the median and the mean tells me something about the distribution.
While I understand your reasoning, insuring for the worst possible case in terms of length of stay can be cost prohibitive. Looking at the chart below and seeing that the vast majority of NH stays were less than three years led me to choose 36 months as the length of coverage for our policies. Even if that doesn't fund the entire cost, it will certainly cover a large portion of the expenses.
Attached Images
File Type: png Screen shot 2010-08-25 at 10.25.58 PM.png (35.3 KB, 3 views)
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Old 03-11-2014, 02:53 PM   #50
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And how is the cost model set up? Is it like health insurance that if you are already on meds for this or that, you are uninsurable for LTC? I am 55 and haven't bothered to look into LTC yet. Do you have to go get a physical and all that?

I just read an article by AARP written June 2012 and it said

http://www.aarp.org/work/retirement-...are-hikes.html

Quote:
"The number of new individual buyers dropped by 43 percent between 2004 and 2009 and has recovered only slightly since,"
This may be the reason everyone's rate is going up. Another reason may be (see below.)
Quote:
Low interest rates have slashed the returns that insurers get from their investments. In the past five years, at least 14 companies quit selling new individual LTC policies,
And this below is some crazy inflation rate.
Quote:
"For people 55 to 65, prices for new policies are up an average of 30 to 50 percent compared with five years ago,"
Quote:
AARP recently heard from a 90-year-old whose premiums had soared by almost 200 percent over the past eight years. This year, she had to let the policy lapse.
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Medical is now needed
Old 03-11-2014, 03:20 PM   #51
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Medical is now needed

Over the last couple of years, some LTC insurers have made physicals a requirement now. Newer policies are more expensive with less benefits.
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Old 03-11-2014, 03:50 PM   #52
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About company stability....
Our insurance is now handled by SHIP... a Trust, established to accept policies where the companies had gone under, or divested themselves of the responsibility.
We started out in Travelers, moved to Continental, then Conseco, and now Senior Health Insurance Company of Pennsylvania. Same original policy. The original policy (1993) had some strict limits on how much and when policy rates could be raised. Has to do with some obscure formula that involves all health policies. So far increases have been minimal, although what used to be a "couples" policy for both of us, has now been separated into his and hers... hers being higher premiums, though the toal remains the same.
SHIP - History
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Old 03-11-2014, 03:58 PM   #53
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While I understand your reasoning, insuring for the worst possible case in terms of length of stay can be cost prohibitive. Looking at the chart below and seeing that the vast majority of NH stays were less than three years led me to choose 36 months as the length of coverage for our policies. Even if that doesn't fund the entire cost, it will certainly cover a large portion of the expenses.
Insuring for the worst possible case for a NH means enjoying a WHOLE LOT less of my money and time in my life when I can enjoy it. Odds are in my favor that my stay will be brief.

It's the same mentality as making sure one has 100% certainty of not running out of money at age 95 when there is only an 18% chance one will live that long.

If one is so risk averse how did they ever retire early in the first place?

PS. As far as I know if one is headed for a NH you can still purchase annuities to extend the life of one's estate. When on Medicaid the state can take the monthly income stream but they can't take the principle.
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Old 03-11-2014, 04:10 PM   #54
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And how is the cost model set up? Is it like health insurance that if you are already on meds for this or that, you are uninsurable for LTC? I am 55 and haven't bothered to look into LTC yet. Do you have to go get a physical and all that?

I just read an article by AARP written June 2012 and it said

Long-Term Care Insurance - Inflation Protection, Jane Bryant Quinn - AARP

This may be the reason everyone's rate is going up. Another reason may be (see below.)

And this below is some crazy inflation rate.
They are going to look at your health, just like major med or life insurance. How carefully depends on the company, your age, maybe how much you're buying, and any red flags that come up on the initial screening.

Your 30-50% partially connects to the prior quote on interest rates. If we pick the right dates, we can probably find long term bonds with prices that have gone up that much. Insurance companies use the premiums that people pay at age 60 to buy bonds which will eventually pay the claims incurred at age 80. I've heard that claims experience is also worse than expected.
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Old 03-11-2014, 04:13 PM   #55
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While I understand your reasoning, insuring for the worst possible case in terms of length of stay can be cost prohibitive. Looking at the chart below and seeing that the vast majority of NH stays were less than three years led me to choose 36 months as the length of coverage for our policies. Even if that doesn't fund the entire cost, it will certainly cover a large portion of the expenses.
Yep. I'll say there's a difference between looking at that chart and buying a three year benefit and looking at that chart and buying nothing.

(Note, however, that I still haven't bought a LTCi policy. I'm still weighing pros and cons.)
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Old 03-11-2014, 04:15 PM   #56
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Yep. I'll say there's a difference between looking at that chart and buying a three year benefit and looking at that chart and buying nothing.

(Note, however, that I still haven't bought a LTCi policy. I'm still weighing pros and cons.)

It's not just looking at the chart for me. It's watching what has happened to the generations above me 4 for 4 with nursing home stays of under 6 months.

That is if you lose the lottery and end up in a NH which is a 1 in 3 chance.

http://www.payingforseniorcare.com/l...tatistics.html
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Old 03-12-2014, 11:52 AM   #57
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It's not just looking at the chart for me. It's watching what has happened to the generations above me 4 for 4 with nursing home stays of under 6 months.

That is if you lose the lottery and end up in a NH which is a 1 in 3 chance.

Long Term Senior Care Statistics
To me, insurance is supposed to be for things that are unlikely but expensive.

I don't have any immediate family members who have lost houses due to fire or tornado, but I carry home owners insurance. I don't have any who have been sued for large amounts following an auto accident, but I carry auto liability.

My problem with LTCi isn't that really expensive NH stays are rare, it's that it's hard to find a policy that only covers the very rare events.

I'll probably end up buying a 365 day elim if I can find one, and hope that I never collect a dollar of NH benefits.

Quote:
PS. As far as I know if one is headed for a NH you can still purchase annuities to extend the life of one's estate. When on Medicaid the state can take the monthly income stream but they can't take the principle.
Maybe you could expand on this with some numbers.
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Old 03-12-2014, 02:56 PM   #58
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PS. As far as I know if one is headed for a NH you can still purchase annuities to extend the life of one's estate. When on Medicaid the state can take the monthly income stream but they can't take the principle.
You mean "principal"?

But please explain how this would work?
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Old 03-12-2014, 02:59 PM   #59
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?

PS. As far as I know if one is headed for a NH you can still purchase annuities to extend the life of one's estate. When on Medicaid the state can take the monthly income stream but they can't take the principle.
Also if you want to do so you can purchase a funeral policy (to pay for the funeral) and that is not counted in the total. The idea there is of course to ensure that when the time comes you do not burden the state with burying you.
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