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Anybody Here Own LTC (Long Term Care)
Old 08-25-2006, 04:40 PM   #1
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Anybody Here Own LTC (Long Term Care)

Just wondering, if folks on here are self-insuring, or carry a policy.

It's not cheap. but neither is $4,000-$8000 a MONTH for care?.........because that would eat up a 4% withdrawal rate pretty quick.......

Disclaimer: I DO NOT sell LTC..........(just so brewster knows)
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-25-2006, 06:27 PM   #2
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Re: Anybody Here Own LTC (Long Term Care)

I'm 38, so I don't have one yet. When the time comes, though, I will buy LTC insurance. (From what I've read, you generally don't want to buy LTC insurance until you're in your mid-fifties. Does anyone else have a different time frame?)

My grandmother spent 35 years in a nursing home. (I am NOT kidding; she was institutionalized when I was 14 months old and only died a few years back.)

I *think* I'm taking care of myself well enough not to need LTC, but you just never know.

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Re: Anybody Here Own LTC (Long Term Care)
Old 08-25-2006, 06:35 PM   #3
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Re: Anybody Here Own LTC (Long Term Care)

A quick search yielded lots of prior discussions on this topic.

IIRC, the sense was that this is very uncertain coverage, expenses for future LTC too unpredictable, expensive, future of health care too murky; the rich don't need it, the poor don't need it (medicaid), and the middle incomers can't afford it.

Consumer Reports did a piece on this and came to similar conclusions.

We chose to forego, to save as aggressively as we can, and hope that our lifestyle income and pared expenses would, if necessary, cover a few years in a skilled nursing facility if needed. Risk:benefit decision, your mileage may vary.
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-25-2006, 06:41 PM   #4
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Re: Anybody Here Own LTC (Long Term Care)

Self-insured.

Spouse saw an Alzheimer's documentary claiming that one of the first cognitive skills to go is the ability to spell familiar words backwards-- like your last name. (Luckily I'm not a member of the Dacyczyn family.) She says that if it happens to me then she's buying my LTC policy from a new insurance company named Ruger or Remington or some name like that.

I'm just getting tired of the daily pop quizzes...
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-25-2006, 08:22 PM   #5
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Re: Anybody Here Own LTC (Long Term Care)

I do only because our company has a group rate on a policy. It's portable so I got it. Not sure if I really need it but it is fairly reasonable under our group. Rates have stayed the same for the 3 years I have been on it but if rates go through the roof down the road, I'll probably drop it.
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-25-2006, 08:56 PM   #6
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Re: Anybody Here Own LTC (Long Term Care)

DW and I got LTC policies at age 50. Coverage is unlimited with a 180 day exclusion period, $100/day with automatic compounded 5% annual increase and $50/day home care coverage. Premiums were quite reasonable - $1700 per year combined. We are coming up on the 10 year anniversary of the policies - premiums were fixed for 10 years so we are waiting to see how much of an increase there will be.

I have had some sigificant health issues so I didn't want to wait and then find that I couldn't get coverage. Also my mother suffered from alzheimers for the last 18 years of her life so I felt that getting the protection was prudent.

While these policies would not cover the full costs of nursing home care, they would cover enough so that we could pay the remainder without seriously depleting our nestegg. It is possible that at some point in the future we will be able to fully self insure and will drop the policies at that point. In the meantime the policies provide a good level of protection for the price.

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Re: Anybody Here Own LTC (Long Term Care)
Old 08-25-2006, 09:01 PM   #7
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Re: Anybody Here Own LTC (Long Term Care)

We haven't bought LTC insurance yet . . .I've been on the fence about it for a while now. This is a highly individual decision based on each different circumstance. I think we'll likely buy LTC insurance within the next few years (I'm 45 now, DW is 41). I can get it through the federal program, which takes away some of the uncertainty concerning insurance company stability (I think OPM would step in to assure another coverage continued if at all possible). We'd get a policy about like Grumpy described--it wouldn't cover everything, but it would be enough.

But, it's certainly not cheap. The insurance really is for the benefit of those who'd feel obligated to take care of you got to this point of decreptitudinity.
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-25-2006, 09:10 PM   #8
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Re: Anybody Here Own LTC (Long Term Care)

I bought about 8 years ago in my 40's thru Calpers which I think is available to any govt worker in CA. *Seems rock solid and covers me in home and has inflation protection and life time benefits.
Started at under $1000 a year now $1076. *Don't think I'll ever use it unless I make it past 95 and at that time I'll have spent maybe $40-60,000 for major piece of mind.

I used to be Santa Claus at a nursing home over 20 years ago and saw all the young people in old age homes. *Eight years ago I brought my father from IN to CA with a life expectancy of 6 months at 69 to die in a nursing home ( he retired at 52). *The shortest month you'll ever see is between writing out $4-5000 checks every month for nursing care! *And still not a private room/bring your own TV/and laundry is extra!

Actually got him a great doctor and since he had dementia I took control of the sugar/salt/fat diet his Indiana quack doctor gave him pills to counteract. *Got him out of nursing home after 6 months and he lived with me 7.5 more years traveling ON HIS OWN *to Vegas and to Hawaii from CA when my mom would babysit for awhile. *He went to an Adult Day Care (M-F 7am to 6pm) while I worked and my long term care will pay for someone to come to my home if I'm ever in the same situation. *While he was in the nursing home I saw people who had been there 20+ years. *Some were well enough that family could take care of them at home but they would lose other care, MediCal ...Medicare benefits so mom or dad were stuck at the nursing home.

When I ER next year and get hit by a bus or have a stroke at my retirement party it would almost KILL me when the nurse tells me they sold off my property to pay them and in a couple of years they'll sell another one. *LTC is for the young in my thinking.

I'm single so if my assests were used no one else would be hurt but I don't think I'd want dear spouse to be left behind penniless or debating how to make me elligible for government care. *

Like anything, you need to buy smart and recognise the risks.
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-25-2006, 09:43 PM   #9
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Re: Anybody Here Own LTC (Long Term Care)

DW and I got LTC when the Federal Gov started it's program. Several people said "the rich don't need it..." but I concluded the opposite. It is expensive insurance you probably won't need but if you do need it you could lose that big nest egg you built up in a quick hurry. What good does it do to earn an ER and then go broke because of a bad tunr of the medical dice.

Arggh. The US health "system" is frustrating. It is the one area we need a little old fashion pinko thinking.
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-26-2006, 12:56 AM   #10
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Re: Anybody Here Own LTC (Long Term Care)

DH and I got LTC when the Fed Gov offered the program also. Hopefully, we will not need to use it, but it is peace of mind for me.
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-26-2006, 07:07 AM   #11
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Re: Anybody Here Own LTC (Long Term Care)

My dad tried to get his parents to buy a policy (He was going to pay the premiums for them) they refused.


It has now been 8 years since my grandfather died and grandma became disabled. My dad writes a check for around $8K A MONTH for in home care.

You bet I'm buying LTC when the time comes.

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Re: Anybody Here Own LTC (Long Term Care)
Old 08-26-2006, 01:27 PM   #12
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Re: Anybody Here Own LTC (Long Term Care)

Quote:
Originally Posted by samclem
I can get it through the federal program, which takes away some of the uncertainty concerning insurance company stability (I think OPM would step in to assure another coverage continued if at all possible).
But, it's certainly not cheap.* The insurance really is for the benefit of those who'd feel obligated to take care of you got to this point of decreptitudinity.
I think that the federal insurance is actually written by John Hancock & Metlife, but that could have changed in the last few years.

When I offered my Dad the chance to buy the federal LTC insurance two years ago, it turned out that he had a better deal directly from Hancock.
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-26-2006, 01:30 PM   #13
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Re: Anybody Here Own LTC (Long Term Care)

My basic opinion about LTC insurance is that it's sold by insurance companies. You should only consider buying an insurance product if you can't afford the alternative.

My father had LTC insurance that he paid on reguarly. Every few years his premium was jacked up to the point that he would apply for a new, lower priced policy but he had to repass a physical. I encouraged him to drop it because his pensions and SS were about equal to a nursing home cost.

Every policy I've seen have an exclusion period. They also limit the number of years you can draw on it -- usually 2 years. Yet the sales pitches all talk about people spending a decade or more in LTC. When I've run the numbers, they've all looked like mediocre investments.

My father died without ever using a day of his LTC insurance.

My in-laws are now both in a facility -- one in nursing and the other in assisted living. Pensions and SS cover a little over one of their costs. Money has to come from their savings to cover the other one at a rate of about $50K per year. Neither one will ever leave their facility alive and both of their minds are gone. When one of them dies, the financial issues will disappear. This is most likely to be my MIL because of her issues.

My in-laws both being needing LTC is the "worst case" scenario but they have assets for a decade of care for both of them. It's possible that they may outlive their money but not likely. Having 2 years of coverage wouldn't make much difference; and if it reduced their savings by paying a couple of decades of coverage, it would have probably hurt them.

I am personally planning to self insure and hope to die outside of a LTC facility.
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-26-2006, 01:53 PM   #14
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Re: Anybody Here Own LTC (Long Term Care)

Quote:
Originally Posted by grumpy
DW and I got LTC policies at age 50. Coverage is unlimited with a 180 day exclusion period, $100/day with automatic compounded 5% annual increase and $50/day home care coverage. Premiums were quite reasonable - $1700 per year combined. We are coming up on the 10 year anniversary of the policies - premiums were fixed for 10 years so we are waiting to see how much of an increase there will be.
We bought similar LTC policies from the same company a couple of years after Grumpy. I'm waiting with some apprehension to see the premium increase hit once the 10 year guarantee expires. Grumpy has graciously agreed to give us a heads up on his experience, assuming he survives the shock.

I'm anticipating the premium will more than double. If that is the case, I am considering dropping the coverage on one of us. The problem is, which one? I'm happy to say that neither of us (late 50's) have any signs of major problems in the future, just the normal aches and pains expected of our 'seasoned' status.

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Re: Anybody Here Own LTC (Long Term Care)
Old 08-26-2006, 02:19 PM   #15
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Re: Anybody Here Own LTC (Long Term Care)

im thinking of taking just a castastrophic level of insurance to cover the cost as well as pay it up in full over the first few years...at least i wont have to worry about not having it later in life if something happens and moneys tight......at first we were going to self insure but when we did that article for money magazine the planners talked us out of it...i tend to agree that wasnt the best way to go.....my dad had a stroke and was in a home for 10 years so im well aware of the costs
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-26-2006, 02:26 PM   #16
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Re: Anybody Here Own LTC (Long Term Care)

the horror here in new york is if your on medicaid they can ship you to any medicaid facility anywhere...with space a factor people are being warehoused 100's of miles away from their families and loved ones...you have no say......another nice thing about ltc is they cover in home care...you dont have that luxury unless you can afford it as medicare and medicaid pay very little for home care
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-26-2006, 03:15 PM   #17
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Re: Anybody Here Own LTC (Long Term Care)

Quote:
Originally Posted by saluki9


You bet I'm buying LTC when the time comes.

I'm curious if you've figured out when that time is?* I would think it would be more asset related than age.* If I was 35 and had a sizable portfolio I would think that would be the time to buy at a lower rate.*

But if I was just starting to grow wealth and was reasonably young I would probably wait.* I've looked at what it would cost someone older than me and it seems that you pay more by waiting in increased yearly costs (because of age) and don't have that coverage for the possible accident/health issues that could happen while you're waiting.* I've spent $8,000 with no return but I'll always pay at a lower rate than if I'd waited and if I'd had even a minor issue that say put me up for a year then after the waiting period the LTC policy would pay the 6 months at say $5K so there's $30 minus $8 and I'm $22,000 ahead. Plus now because of the issue I may not be able to buy LTC or the rate could be way crazy.

Question to the self insurers?* How much of your portfolio could you commit to LTC and still provide FIRE* for the healthy spouse?* Do you self insure your car or your house?* Seems like the payout to insure a $25-45,000 car for collision or a $100K-300K house would be way larger
when you compare the return and the risk.* I think I have better odds of needing LTC than having to replace a car or my house.

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Re: Anybody Here Own LTC (Long Term Care)
Old 08-26-2006, 03:30 PM   #18
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Re: Anybody Here Own LTC (Long Term Care)

I'm troubled by what appears to be the carriers' ability to raise your rates at the end of your guaranteed rate period. Or, suppose over the next few decades, national health care reform starts to cover parts of long term care, or home health becomes a covered Medicare benefit.

Sure you can cancel, but that means all the premiums you paid up til them might as well have been money out the window. Too unpredictable for me, and all the uncertainties favor the insurance company.

I'll stick with trying to save the biggest nestegg I can and hope for the best. Big risks either way.
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Re: Anybody Here Own LTC (Long Term Care)
Old 08-26-2006, 03:50 PM   #19
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Re: Anybody Here Own LTC (Long Term Care)

Quote:
Originally Posted by Rich_in_Tampa

Sure you can cancel, but that means all the premiums you paid up til them might as well have been money out the window. Too unpredictable for me, and all the uncertainties favor the insurance company.
R-in-T,

That is the nature of insurance. You hope you never have a claim. If you never have a car accident, then all the premiums you paid are money out the window- but is that a reason not to carry auto insurance? If your house never burns to the ground would you feel cheated out of your homeowner's insurance premiums? No, you would be happy you avoided that loss. To me LTC insurance is the same. I would prfer to drop dead suddenly at a ripe old age, and never have to draw on the LTC benefits that I paid premiums for. Those premiums won't seriously impact my FIRE lifestyle but the cost of uninsured years in a nursing home for either me or DW would certainly have a very severe impact. Therefore, I gladly pay the premiums.

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Re: Anybody Here Own LTC (Long Term Care)
Old 08-26-2006, 03:51 PM   #20
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Re: Anybody Here Own LTC (Long Term Care)

Quote:
Originally Posted by Rich_in_Tampa
I'm troubled by what appears to be the carriers' ability to raise your rates at the end of your guaranteed rate period.
My health, auto, and homeowner's insurance policies have no premium guarantee, so I consider the 10 years I'm getting with LTC to be a plus.

Quote:
Originally Posted by Rich_in_Tampa
Or, suppose over the next few decades, national health care reform starts to cover parts of long term care, or home health becomes a covered Medicare benefit.
Then I will cancel my LTC policy since I no longer need it...just like I cancelled my life insurance policy when I reached FIRE.

Quote:
Originally Posted by Rich_in_Tampa
Sure you can cancel, but that means all the premiums you paid up til them might as well have been money out the window.
The same can be said for most types of insurance. I hope the premiums I pay on my health, auto, homeowner's and LTC insurance are all "money out the window".

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