LTC Poll

[growing_older]

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You make it sound like the insurance companies are a bunch of villains

No, I didn't mean to say that insurance companies are villains or that insurance companies shouldn't make profits. I did mean to say that high likelihood events are usually poor choices for insurance because the contracts have to be structured so the companies can stay in business. This usually means limits or exclusions that make the policies right for some people but not all.

On the other hand, I did mean to say that SOME insurance agents are villains who will stretch the truth or artfully give one impression while staying just this side of compliance, at least in their written materials. Every time I have considered LTC insurance I have found the agent made significant misrepresentations of what was in the policy or played fast and loose with numbers, like the "one in ten house burning down" example earlier in the thread. I'm sure there are good agents out there. I just haven't run across one when I was shopping for LTC.

And I also admit, I am still stuck on the value proposition. I pay significant premiums for years, on the chance that I will require so much LTC that the policy with all it's limits will still end up paying more than my cost. This seems like only a small part of the ruinous scenarios I need to protect against, yet I get only limited protection for premiums so large they would be a reasonable part of my portfolio, had I retained and invested them. The odds do not seem to be in my favor.

[Katsmeow]

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Originally Posted by Mmm Rrr I've shopped for LTCI 3 times, once at 50, at 55, and then finally approaching 60 (I'm 61 now).

What kind of quotes did you get at approaching 60. I'm leaning against LTCI but have thought of getting quotes and am 59. I'm wondering what quotes are like for those that age or even older.

[jIMOh]

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Originally Posted by Carlos2 I think those of us who are considering not buying or self insuring should consider this line of thinking below. I thought it made sense. People who "self insure" are usually fooling themselves and think that they will never need LTC. LongTermCare.gov states that 70% of people turning 65 can expect to use some form of LTC in their lifetime. So the majority WILL need it to some extent. But insurance is about leveraging your money. And imo it is best to leverage your money for the large risks, not the small risks. Example: It is easy & practical to self insure your car and just have liability coverage. Just save up a decent replace/repair amount over the course of a year or two and your good. It is not easy or practical to self insure a home. Since you would need a very large amount saved. It would take the average person many many years to self insure a house. So lets look at LTC and its financial risk. National average for a private room in a nursing home is $80k National average for community based care is $40k Length of stay averages 3 years. So you will need $120k-$240k to pay for LTC. Basically what a small house costs. How many people with $240k homes do you think have homeowners insurance? Probably over 90%. But they only have a 1 in 10 chance of loosing that house to a fire. They have a 7 in 10 chance of needing that $240k for LTC. So if you are going to be forced to come up with that $240k, does it not make sense to only pay a fraction of that cost via LTCI? Would you rather pay $240k over 3 years or $50k over 10-15 years? Which is the better deal

I think this misses the point of LTC.

If you become disabled or meet one or more of the acts of daily living which qualify for LTC, YOU WILL RECEIVE CARE. The question is where, and who provides it.

I do not want my kids to provide my care... I want them to have resources to provide it (nurses or home health aides) and make decisions about it, but not do the care.

I see friends whose wives take care of ailing grandmothers, and that set his family back financially. I have heard stories of spouses which got injured caring for the spouse which needed care. People which don't have the insurance are "forcing" family to take time to provide care.

Most LTC is provided in the home (not a nursing home), and ask yourself who will help you bath or get dressed?

[larrytbm]

We took out our LTC policies in '96, premiums on mine are currently $51 monthly for $255K coverage, so about 0.25%. Wife's is under $40 monthly. Policy includes a premium refund at death, 100% at age 65 reducing to 0% at age 75.

On this forum, looking at LTC policies from a financial perspective is logical, but there certainly are other considerations. Individual health and family health history is important, but just as important is the family burden for providing LTC. I believe the statistics about length of stay in a nursing home reflect the LACK of planning on this issue. The family unit is not prepared financially and/or physically to provide good care and everyone suffers until nursing home care becomes mandatory.

Finally, it seems strange to me that people will pay for house or auto insurance for a lifetime and be thankful if they never have to file a total loss claim, yet see little value in an LTC policy. And if you 'self insure', why not auto and home first?

[samclem]

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Originally Posted by larrytbm Finally, it seems strange to me that people will pay for house or auto insurance for a lifetime and be thankful if they never have to file a total loss claim, yet see little value in an LTC policy. And if you 'self insure', why not auto and home first?

Totally different products. If I buy auto or home insurance I pay now for coverage that I get this year. With LTCI, I pay a lot now in advance for coverage (mostly) 3-4 decades hence. Given the premium increases and turmoil among those offering the product, it's a much different, and worse, proposition.

[larrytbm]

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Originally Posted by samclem Totally different products. If I buy auto or home insurance I pay now for coverage that I get this year. With LTCI, I pay a lot now in advance for coverage (mostly) 3-4 decades hence. Given the premium increases and turmoil among those offering the product, it's a much different, and worse, proposition.

Either could be used today or either could be used 3-4 decades from now. Or both could never be used. An accident could total your car and leave you needing LTC at the same time. So, I don't see how they are very different products. My premium increases have been nonexistent.

[samclem]

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Originally Posted by larrytbm So, I don't see how they are very different products.

When a person signs up for a LTCI policy at 55 YO and pays, say, $250/mo for a policy, something like $20 of that is buying protection for the coming year, the rest of the premium is "paying ahead" for the inflation to come and the far greater likelihood of a claim in later years. Nobody buys their car insurance or homeowners insurance like that. It's very different.

[larrytbm]

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Originally Posted by samclem When a person signs up for a LTCI policy at 55 YO and pays, say, $250/mo for a policy, something like $20 of that is buying protection for the coming year, the rest of the premium is "paying ahead" for the inflation to come and the far greater likelihood of a claim in later years. Nobody buys their car insurance or homeowners insurance like that. It's very different.

I signed up at age 48, planning to retire at age 55, now I'm 65 and paying $51/mo. NOT $250/mo. If I died today in a car accident, 100% of what I paid over the last 17 years is refundable. So how would I have "paid ahead"? I agree car insurance is different, rate increases occur more frequently even with zero claims than increases to my LTC policy.

[akck]

While I'm planning to get LTC policies for both of us, I think I talked a co-worker out of getting it for herself. She and her disabled brother live together, so initially I went over the available options since she wanted to take care of him. Just before she finished filling out the papers, I thought about her situation and it didn't make sense for her to get it. They'll both have assistance available (Medicaid plus welfare for him), should either need it and could use the premiums for other expenses or savings. They talked it over and her brother told her not to worry about him should she need care. I think it was a good decision on their part.

[MRG]

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Originally Posted by larrytbm I signed up at age 48, planning to retire at age 55, now I'm 65 and paying $51/mo. NOT $250/mo. If I died today in a car accident, 100% of what I paid over the last 17 years is refundable. So how would I have "paid ahead"? I agree car insurance is different, rate increases occur more frequently even with zero claims than increases to my LTC policy.

Well the only difference I see, is your 100% dead.

I have a hard time understanding the value in LTC products, mainly due to future costs. Perhaps there's other reasons I don't think about these products, nobody wants to really think about the 'need' of nursing home care. It's a very harsh reality.

That said I don't think there's any right or wrong, only a difference of how we see things.

MRG

[Carlos2]

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Originally Posted by akck While I'm planning to get LTC policies for both of us, I think I talked a co-worker out of getting it for herself. She and her disabled brother live together, so initially I went over the available options since she wanted to take care of him. Just before she finished filling out the papers, I thought about her situation and it didn't make sense for her to get it. They'll both have assistance available (Medicaid plus welfare for him), should either need it and could use the premiums for other expenses or savings. They talked it over and her brother told her not to worry about him should she need care. I think it was a good decision on their part.

The brother would not have been eligible to be insured anyway since he was already disabled. If the sister had limited funds or assets, then she would not have reason to buy it because she'd only let the policy lapse. This was a moot point for them.

[Carlos2]

LTCi is not for everyone. If you have significant assets to protect, then I'd say look into LTC especially if you have a spouse that you don't want to leave destitute.

I would look at your state's partnership LTCi plan. It's not just for nursing homes, but also home care where most people receive their care at first. I think the other thing is the care coordinator services that you get can be a tremendous asset. Imagine your spouse having to figure out all of those details and being under such strain talking with doctors and nurses, having to figure out the specifics of where you can go, or if you stay at home how will she manage, etc. etc. etc. A care coordinator can be there to take care of all of that for her. That would be a big relief for her as she struggles with your illness.

It's about money, but it's more than just money. It's also about peace of mind for you and those who are affected by you.

[samclem]

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Originally Posted by larrytbm I signed up at age 48, planning to retire at age 55, now I'm 65 and paying $51/mo. NOT $250/mo. If I died today in a car accident, 100% of what I paid over the last 17 years is refundable. So how would I have "paid ahead"?

$250/month is the premium for LTCI for a 55YO buying a 5 year/$200 per day policy on the federal employee LTCI program. And if you >don't< die in a car accident, every month you are paying ahead for LTCI to cover the risk of an 80+ year old person. If you were buying "pure insurance" just one year of coverage for LTC when you started as a 48 year old, you'd have paid much less than $51/mo (probably closer to $10 per month), and the rates would go up each year as your chances of filing a claim increase. You paid ahead to cover your much higher risk of needing LTCI when you are older. There's nothing wrong with that, but this factor, together with rate increases and instability among insurance providers (leaving the market, etc) is a major reason many people are reluctant to buy LTCI: You give a lot of money to an insurer decades ahead of the likely payoff, and many have a less than stellar history of maintaining the promised premium levels.

As for rate increases--I sincerely hope your luck continues, it probably only needs to hold out for a few more decades.

[MRG]

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Originally Posted by Carlos2 LTCi is not for everyone. If you have significant assets to protect, then I'd say look into LTC especially if you have a spouse that you don't want to leave destitute. I would look at your state's partnership LTCi plan. It's not just for nursing homes, but also home care where most people receive their care at first. I think the other thing is the care coordinator services that you get can be a tremendous asset. Imagine your spouse having to figure out all of those details and being under such strain talking with doctors and nurses, having to figure out the specifics of where you can go, or if you stay at home how will she manage, etc. etc. etc. A care coordinator can be there to take care of all of that for her. That would be a big relief for her as she struggles with your illness. It's about money, but it's more than just money. It's also about peace of mind for you and those who are affected by you.

Lot of good info, wasn't even aware some states have partnership plans. One of the worst aggravations about long term care is state specific nature of laws.

In FL. (4 years ago), seemed they were friendly about asset protection. When parents moved to PA. , not friendly at all.

Another biggie is the quality and availability of proper care. In FL. OK. Parts of this country lack proper care facilities and specialists.

It's really hard to watch elders suffer, when you know in a different part of the country, care is available.


MRG

[Bestwifeever]

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Originally Posted by larrytbm I signed up at age 48, planning to retire at age 55, now I'm 65 and paying $51/mo. NOT $250/mo. If I died today in a car accident, 100% of what I paid over the last 17 years is refundable. So how would I have "paid ahead"? I agree car insurance is different, rate increases occur more frequently even with zero claims than increases to my LTC policy.

I don't know much about LTC but might have been interested if it had been offered through work. Your premiums are 100 percent refundable if you died today in a car accident? Is that typical--are they refundable no matter when you die if you have not used the policy? That would make it more attractive.

We would not self-insure home or auto because that insurance is more for the liability.

MIL had LTC but as far as home care, the providers in her small town wanted to be paid directly and did not want to fill out paperwork or get certification, etc., so she never used it for that but paid it out of pocket to the nice ladies who helped out. She was in a nursing home later where she did use up the benefits.

[larrytbm]

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Originally Posted by samclem $250/month is the premium for LTCI for a 55YO buying a 5 year/$200 per day policy on the federal employee LTCI program. And if you >don't< die in a car accident, every month you are paying ahead for LTCI to cover the risk of an 80+ year old person. If you were buying "pure insurance" just one year of coverage for LTC when you started as a 48 year old, you'd have paid much less than $51/mo (probably closer to $10 per month), and the rates would go up each year as your chances of filing a claim increase. You paid ahead to cover your much higher risk of needing LTCI when you are older. There's nothing wrong with that, but this factor, together with rate increases and instability among insurance providers (leaving the market, etc) is a major reason many people are reluctant to buy LTCI: You give a lot of money to an insurer decades ahead of the likely payoff, and many have a less than stellar history of maintaining the promised premium levels. As for rate increases--I sincerely hope your luck continues, it probably only needs to hold out for a few more decades.

If I had to pay $250/mo for the LTC policy you described, I wouldn't. And if mine increases to that level I would seriously consider dropping it. But I consider it part of an overall health, family and estate plan. My belief is in God, not luck.

[Carlos2]

Many people only hear of LTCi and don't understand the many nuances and variables that play into the policies. Also, there are so many differences in what policies cover and and what they do. So if someone were to tell me that they were paying $50/month that tells me nothing because the contracts of ltc can be so different particularly when you bought your policy.

My policy is a four year one. It pays me $200+ per day, it is compounded 5% each year. The policy pays for home health care, assisted living care, nursing home care. The policy also has a spousal clause that once it has been in force for ten years and it has not been used, that the other's policy will be paid for upon the death of the other spouse. It pays for a care coordinator. It will pay for modifications to my house for things like handle bars in my bathroom. It pays local community health agencies that may come to your home. It also pays for any new stuff that may not be discovered yet. It is a very comprehensive policy. It costs all of $168/month for my wife and $186/month for me. That's for two of the same policy. it helps me to protect my assests. For every dollar that my policy pays, my assets are protected. So my $500,000 in stocks and bonds is safe from the state if I run out of other monies and need Medicaid. My wife is protected from being drained. I saw this happen to a friend who had a stroke and they ended up declaring bankruptcy. They were in the middle class category and when they no longer had money to pay on their own the had to depend on Medicaid. The government looked back and used his savings and then gave him them Medicaid. With a partnership plan, those assets would have been protected and then the Medicaid would have been provided. So in other words if your ltci policy paid out $300,000 then $300,000 of your assets would be protected if you needed care and money beyond that. This is what ltc partnership policies do. In my state, CA, the ltci partnership policies have never been raised so far. I hope this continues.

[nvestysly]

DW and I have LTC insurance. We opted for LTC because if something happens to one of us now (near term) it would have a very detrimental affect on finances. However, we may find that 10 years from now our nest egg has grown substantially (let's hope) and we may discontinue the LTC premiums. We'll give that more consideration when the time comes.

I don't know policy specifics off the top of my head but I seem to recall the inflation rider, 90 day period, 5 year limit for each of us (assuming we are using it at the maximum daily rate), however, I can use hers and vice-versa - meaning one of can use it for 7 years and there will still be 3 years remaining.

[jimbee]

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Originally Posted by larrytbm My belief is in God, not luck.

One will get you about as far as the other.

[jclarksnakes]

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Originally Posted by Carlos2 LTCi is not for everyone. If you have significant assets to protect, then I'd say look into LTC especially if you have a spouse that you don't want to leave destitute.

If someone really has significant assets they should instead consider self insuring. Reading one of your other posts it looks like your LTC insurance would only pay a maximum of around 300 thousand in todays dollars. For me a fundamental part of my lifetime LBYM mentality is that one should only buy insurance to cover losses that one cannot afford. We could afford to self pay for LTC if needed so we self insure.