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View Poll Results: Do have Long Term Care coverage of some type?
I have LTC insurance. 59 24.48%
I have LTC coverage as part of a life insurance policy. 1 0.41%
I have LTC coverage as part of an annuity. 0 0%
I don't have LTC coverage yet, but plan to obtain it in the future. 13 5.39%
I don't have LTC coverage because my assets are too small to make it worthwhile. 6 2.49%
I don't have LTC coverage because my assets are large enough that I feel I can self-insure. 57 23.65%
I don't have LTC coverage and my assets are sort of in the middle, but the policies are so flawed I don't want to buy the coverage and will take my chances I can self-fund any LTC needs. 100 41.49%
Other (please explain) 5 2.07%
Voters: 241. You may not vote on this poll

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Old 08-17-2013, 04:54 PM   #41
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I agree with the final two "I don't" choices though I don't know if my assets are in the middle or not as do 70% of the others who have voted so far.

Save yer money; take yer chances.
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Old 08-18-2013, 12:28 AM   #42
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Originally Posted by Carlos2 View Post
I got this post from the insurance forum. He was posting to mostly other insurance agents. Although, I am not in that industry, I began reading that forum and others as I was doing my research on LTC a few years ago. I believe he was just trying to give some context to the need for the insurance and comparing to the other sources that people are willing to pay. I am sure we can all dissect this until kingdom come to justify our reasoning. However, like I say, none of us has a crystal ball and even if we can self insure we don't know what our future holds and if we become ill in a way that would require us to need this type of care, we could end up wishing we had it. I was just sharing another point of view on the matter. He more than likely is an insurance salesman.
I am curious about your statement that you got this post "from the insurance forum" as I note that it is posted in a forum on Bogleheads.

Is that where you got it from or are you the person who posted it at Bogleheads (different user name but lots of people have different names at different sites).

Bogleheads • View topic - So You're Going to Self Insure Long Term Care?
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Old 08-18-2013, 01:24 AM   #43
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In the Boglehead thread cited in my prior message there is a link to a Genworth claims practices presentation which is interesting (dates seems to be mostly as of 2009 or 2010) talking about their long term claims:

bjfim.bordenhamman.com/wp-content/uploads/2010/03/Renee-LTC-Claims-Practices.pdf

45% of claims last less than 1 year.

Average length of claims that last more than a year a year is 3.9 years.

15% of claims will last more than 5 years

48% of all claim dollars are paid to claimants with mental disorders including dementia (Note: I was surprised this wasn't higher). Dementia claims are only 11% of claims lasting less than a year, but 44% of those lasting more than 1 year. Average age of claimant is 78.

Married women tend to claim at an earlier age than single women and men (make of that what you will).

Interestingly, says that 80% of people never change care setting. If they start at home for example with home health care they usually stay there.
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Old 08-18-2013, 05:43 AM   #44
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Posted Twice

Quote:
Originally Posted by Katsmeow View Post
I am curious about your statement that you got this post "from the insurance forum" as I note that it is posted in a forum on Bogleheads.

Is that where you got it from or are you the person who posted it at Bogleheads (different user name but lots of people have different names at different sites).

Bogleheads • View topic - So You're Going to Self Insure Long Term Care?
I also posted it on Bogleheads. I wanted to read their reactions as there are many there that seem to find no reason to buy LTCi. Yes, insurance forum is where I read the post.
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Old 08-18-2013, 08:23 AM   #45
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I also posted it on Bogleheads. I wanted to read their reactions as there are many there that seem to find no reason to buy LTCi. Yes, insurance forum is where I read the post.
It looks like the folks there also found that it was a largely inaccurate sales talk.
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Old 08-18-2013, 08:58 AM   #46
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Nice choice of poll options. I was surprised to find that I'm in the plurality - right now 45% of the responses are "I'd like to insure, but don't like the options".

Over 100 years ago, people figured out that if life insurers were going to sell policies with purported level premiums, then they should be required to provide reduced benefits to people who pay for a while then quit. I won't go into all the reasons for this, but every insurance regulator should understand the concept.

But, when they introduced level premium LTCi, the regulators did not recognize the same set of issues and require nonforfeiture benefits for LTCi. We've been living with the results of that bad decision ever since.

My problem with LTCi is that it locks me in for life, while the company has the option of raising premiums. Officially, I'm "deferring the decision" to reduce the time between the policy issue date and the time I'm likely to get benefits.
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Old 08-18-2013, 10:41 AM   #47
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Over 100 years ago, people figured out that if life insurers were going to sell policies with purported level premiums, then they should be required to provide reduced benefits to people who pay for a while then quit. I won't go into all the reasons for this, but every insurance regulator should understand the concept.

But, when they introduced level premium LTCi, the regulators did not recognize the same set of issues and require nonforfeiture benefits for LTCi. We've been living with the results of that bad decision ever since.

My problem with LTCi is that it locks me in for life, while the company has the option of raising premiums. Officially, I'm "deferring the decision" to reduce the time between the policy issue date and the time I'm likely to get benefits.
I take it you're referring to whole life insurance policies and not term life insurance where there is no surrender value. I view LTCi more analagous to term life insurance, with premium that can reset periodically, which also occurs with term life policies, as the risk of death becomes greater (i.e as we get older).

At some point, deferring the decision effectively means pricing one out of insurance coverage. I'm ok with paying for all the term life insurance I've purchased for over 38 years -- it's sunk in cost I hope never to recoup. It will eventually get too pricely for me and I'll drop the coverage next year -- and I'll "self insure." I might do the same with LTCi, but for now, I'm completely satisfied with this picture now and going forward.
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Old 08-18-2013, 11:12 AM   #48
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Originally Posted by Independent View Post
My problem with LTCi is that it locks me in for life, while the company has the option of raising premiums.
+1

I would only want to buy a catastrophic (3+ year exclusion), inflation adjusted, single premium policy (purchase the whole thing with one check). I don't believe such a policy is available in my state.
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Old 08-18-2013, 12:49 PM   #49
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I take it you're referring to whole life insurance policies and not term life insurance where there is no surrender value. I view LTCi more analagous to term life insurance, with premium that can reset periodically, which also occurs with term life policies, as the risk of death becomes greater (i.e as we get older).
LTCi that has the "inflation protection" feature has level premiums for the rest of the life of the policyholder, so it is analogous to whole life insurance. Like whole life insurance, the risk for the later years when one is far more likely to make a claim is already priced into the policy from the first month, and that makes it very expensive to abandon the policy after a few years: The policyholder has paid a LOT of sunk cost. The policies that have the "future purchase option" are not quite as "front loaded," but policyholders still pay much more in the "early years" than they'd pay for to insure against their >present< risk for needing LTC.
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Old 08-18-2013, 02:35 PM   #50
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+1

I would only want to buy a catastrophic (3+ year exclusion), inflation adjusted, single premium policy (purchase the whole thing with one check). I don't believe such a policy is available in my state.
I think a lot of us would like that. I am not sure it exists at all, let alone in you state. Could be wrong though, happens a lot.......
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Old 08-18-2013, 03:18 PM   #51
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I take it you're referring to whole life insurance policies and not term life insurance where there is no surrender value. I view LTCi more analagous to term life insurance, with premium that can reset periodically, which also occurs with term life policies, as the risk of death becomes greater (i.e as we get older).

At some point, deferring the decision effectively means pricing one out of insurance coverage. I'm ok with paying for all the term life insurance I've purchased for over 38 years -- it's sunk in cost I hope never to recoup. It will eventually get too pricely for me and I'll drop the coverage next year -- and I'll "self insure." I might do the same with LTCi, but for now, I'm completely satisfied with this picture now and going forward.
Yes, I was referring to whole life, not term. LTCi has been sold as level premium for life contracts. The right to raise premiums was (and is) supposed to be a last resort for companies that experience unpredictable adverse experience.

I would have bought LTCi years ago if there had been a term option with scheduled premium increases that roughly matched the increasing risk.

And yes, deferring means accepting the insurability risk. In our case, that kind of bit us. Still, I'm not crying a lot about missing out.
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Old 08-23-2013, 08:16 PM   #52
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We have LTC insurance with an inflation escalator. After voting, I got out the papers and my pencil. We have had one premium increase in the 10+ years we've had the policies.

Right now, if I take the annual premium and divide by the max amount of the coverage, the annual premium comes to about 1/4 of 1% of the coverage amount.

I understand that some people will never need the coverage, and only a few will need the max. But that is still an interesting number.
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Old 08-23-2013, 09:04 PM   #53
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From what others have said here, and like many other insurance products, details vary from state to state. DW and I will move to another state after we ER (somewhere between 55-60). It seems to me that we should not consider LTCI until we get to our retirement location, so we don't have to worry about changing rules, etc. Is this a reasonable approach?
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Old 08-24-2013, 08:04 AM   #54
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....What do you think is the worst case cost per month if you get really sick and don't have LTC?
My great aunt's private pay nursing home charges were $278/day or $8,340 a month. She had a small pension that covered her insurance and rx co-pays and her SS went to the nursing home but she was still drawing about $7k a month out of savings.
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Old 08-24-2013, 09:13 AM   #55
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Voted "Other." Still working through the issues to make a final decision. I'm by nature a risk minimizer, but the important factors on which to base a proper analysis keep changing. LTC is definitely a puzzler.
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Old 08-24-2013, 01:01 PM   #56
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But they only have a 1 in 10 chance of loosing that house to a fire.
Not even close to true, and most of the other numbers cited in building the case for LTC insurance are also bogus. House insuance is a resonable caution to protect a low likelihood high cost risk, and premiums are priced accordingly. LTC is a much higher likelihood occurrence, but the policies are limited to much smaller multiples in comparison to the premiums charged. In almost all policies, the issuer also reserved the unilateral right to change the premiums, so even if you think you have priced a reasonable deal, it may not stay that way after you have sunk serious cost into it.

Insurance companies are not in this business to spread their largesse through small premiums protecting everyone with a policy from high cost high likelihood events. They would obviously go out of business if that were true. But insurance salesmen know what sells, fear and bargains, so they cook the numbers and pump up the fear.

Certainly there are cases where LTC makes sense. But even many of these (one spouse protecting the other from impoverishment) may not play out as promised should a long term care case actually take longer than the policy limits, which are usually at most a few years. They sell on the idea of LONG term - imaging decades of drain on your assets - while selling policies with 3 or 4 year limits to contain their downside. Most policies are a lot less insurance than the salesman implies they are.
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Old 08-24-2013, 01:44 PM   #57
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You make it sound like the insurance companies are a bunch of villains, but their business, like any other insurance, is to honor the contract at a price-expense ratio that hopefully produces a profit. Right now, the profits seem to be minimal or negative for most.

Our homeowners insurance has many exclusions that I don't like, some I have been able to cover with riders and others I just keep my fingers crossed. Same with our car insurance. And don't get us started about health insurance.

No insurance policy is perfect. LTC is far from perfect, but until you or the government come up with a better system, it's all we have. Everyone needs to look at their own situation and make an informed decision.
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Old 08-24-2013, 02:30 PM   #58
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I'll leave the number crunching to others but my experience with nursing homes is that I wouldn't want to go there. Another possibility is that you won't be accepted into a nursing home because you have Alzheimer's, are combative or otherwise disruptive. In my Fathers case, they required my mother to pay for 24 hour additional one to one watch. It added up fast, basically doubling the cost. But the money wasn't the real issue. What do you do when your loved one doesn't understand why he can't go outside, drive a car, be independent. Physically very strong but mentally impaired. It can happen really fast not leaving much time for preparation or proper decision making.
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Old 08-24-2013, 02:49 PM   #59
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I've shopped for LTCI 3 times, once at 50, at 55, and then finally approaching 60 (I'm 61 now).

The last time, I put together several scenarios of what the policy would cost over time and what the likely benefits would be. I then sat down with my adult child and we decided together that the insurance was not a worthwhile use of my money. He realizes that the unlikely worst case scenario would spend down the nest egg that has allowed me to retire early.

When I was considering the insurance, I ran across a website designed for LTCI sales people, giving arguments to be used on people like me who look at the purchase as a financial decision rather than an emotional one. (I can't find the site now). Reading through those arguments helped with the decision to not buy.
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Old 08-24-2013, 03:33 PM   #60
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I'll leave the number crunching to others but my experience with nursing homes is that I wouldn't want to go there. Another possibility is that you won't be accepted into a nursing home because you have Alzheimer's, are combative or otherwise disruptive. In my Fathers case, they required my mother to pay for 24 hour additional one to one watch. It added up fast, basically doubling the cost. But the money wasn't the real issue. What do you do when your loved one doesn't understand why he can't go outside, drive a car, be independent. Physically very strong but mentally impaired. It can happen really fast not leaving much time for preparation or proper decision making.
Yes there are so many what ifs even with all the planning in the world there may be some conditions you can't plan for. My sympathy for your father's situation.

I've just started reading The 36 Hour Day, about caring for loved ones with Dementias.

It's been mentioned but state by state these laws very wildly. While DM needed nursing home care in FL. It was very simple for her to sign off of assets and have medicaid step in(4 years ago). After they moved to PA(closer to caregiver), the laws there are extremely unfriendly to elders, and potentially their children.

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