|
|
09-06-2009, 12:32 PM
|
#21
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
|
Quote:
Originally Posted by mickeyd
I've never been a fan of LTC and do not have a LTC policy. I choose to self insure for this limited risk. I have always thought that LTC coverage was too expensive for the risk that it covers and the limited data that is used to establish rates, as opposed to life insurance that has millions of cases of how folks have died over the last 100+ years.
|
Well, I think the fact that they've had to jack up "locked in" LTC rates rather steeply tells you all you need to know about the insurers' inability to appropriately price their risk. When you buy a life insurance policy with "locked in" rates, you don't have an insurer coming at you with premium increases down the road. Insurers know how to price life auto insurance very effectively -- even homeowners insurance to a large degree, despite the variability of super-cat disasters.
As far as health and LTC, it's pretty obvious there are difference pricing dynamics and the usual actuarial methods of trying to find an appropriate "price" (as with auto and life) are doomed to fail.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
09-06-2009, 02:39 PM
|
#22
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
|
Quote:
Originally Posted by ziggy29
Well, I think the fact that they've had to jack up "locked in" LTC rates rather steeply tells you all you need to know about the insurers' inability to appropriately price their risk. When you buy a life insurance policy with "locked in" rates, you don't have an insurer coming at you with premium increases down the road. Insurers know how to price life auto insurance very effectively -- even homeowners insurance to a large degree, despite the variability of super-cat disasters.
As far as health and LTC, it's pretty obvious there are difference pricing dynamics and the usual actuarial methods of trying to find an appropriate "price" (as with auto and life) are doomed to fail.
|
Methinks you give the industry too much credit for pricing acumen on other products. Auto policies get mispriced all the time, but they are only fixed for 6 or 12 months so it isn't hard to make adjustments to your pricing. Ovviously term life is fixed, but in universal and whole life policies pricing gets adjusted all the time.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
|
|
|
09-06-2009, 03:10 PM
|
#23
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 5,596
|
For now, I plan to keep the Federal LTC insurance even with the increase in premiums. I will consider changing our options to lower the price. DH and I have spent countless hours in nursing homes during the 15+ years his mother has required care. I gotta tell you, it's pretty darn depressing.
__________________
I purr therefore I am.
|
|
|
09-06-2009, 03:29 PM
|
#24
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
|
Quote:
Originally Posted by Moemg
Rewahoo , while I understand the reason you would drop hers I would drop yours instead and keep hers . The reason is that women outlive men (sorry but true ) and also women tend to be good caregivers so if you got ill she would probably care for you with some help eliminating the need for a nursing home . I'm sure you would also care for her but since statistically women outlive men she may need care that requires a Nursing Home stay .
|
Moe, I do understand why you suggest we do a 180 with our plans. We took these factors into consideration when reaching our decision.
Although odds are she will outlive me, I don't want to place her in a situation where she is forced to take care of me at home to avoid financial ruin. Nor do I think the odds are necessarily favorable that she would be physically or emotionally able to care for me at home, even with help.
She'll probably kill me long before I'm ready to be institutionalized, anyhow...
__________________
Numbers is hard
|
|
|
09-06-2009, 04:39 PM
|
#25
|
Gone but not forgotten
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,447
|
Watch out for the arsenic taste in your oatmeal !
|
|
|
09-06-2009, 04:42 PM
|
#26
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,674
|
Quote:
Originally Posted by ziggy29
Well, I think the fact that they've had to jack up "locked in" LTC rates rather steeply tells you all you need to know about the insurers' inability to appropriately price their risk. When you buy a life insurance policy with "locked in" rates, you don't have an insurer coming at you with premium increases down the road. Insurers know how to price life auto insurance very effectively -- even homeowners insurance to a large degree, despite the variability of super-cat disasters.
As far as health and LTC, it's pretty obvious there are difference pricing dynamics and the usual actuarial methods of trying to find an appropriate "price" (as with auto and life) are doomed to fail.
|
Another very obvious issue is the fact that LTC is being heavily marketed to boomers with deep pockets of cash/savings. Generating fear-of-the-unknown in millions of sixtysomethings that think that they will live another 30-40 years (don't we all?) is a real cash cow for the insurance industry.
__________________
Part-Owner of Texas
Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx
In dire need of: faster horses, younger woman, older whiskey, more money.
|
|
|
09-06-2009, 05:16 PM
|
#27
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 5,596
|
Quote:
Originally Posted by REWahoo
Although odds are she will outlive me, I don't want to place her in a situation where she is forced to take care of me at home to avoid financial ruin.
|
YOU are a keeper
__________________
I purr therefore I am.
|
|
|
09-06-2009, 05:25 PM
|
#28
|
Thinks s/he gets paid by the post
Join Date: Dec 2007
Posts: 4,764
|
Yeah you cant turn em back in after 40 years anyways.
|
|
|
09-06-2009, 06:30 PM
|
#29
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 7,113
|
I think the rate increases are primarily due to their investment losses, not payouts.
__________________
Duck bjorn.
|
|
|
09-06-2009, 06:34 PM
|
#30
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 5,596
|
Quote:
Originally Posted by Brat
I think the rate increases are primarily due to their investment losses, not payouts.
|
Investment losses from John Hancock, who recently won the contract or MetLife, who currently has the contract? I'm confused.
__________________
I purr therefore I am.
|
|
|
09-06-2009, 06:46 PM
|
#31
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
|
Quote:
Originally Posted by Brat
I think the rate increases are primarily due to their investment losses, not payouts.
|
Highly unlikely, given what I know of the industry, the product and industry regulation. Far more likely that they underpriced the policies up front (intentionally or otherwise) and now have to catch up. A lot of insurers priced a lot of lapses into their assumptions, and LTC policyholders have proven to be a persistent lot.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
|
|
|
09-06-2009, 07:37 PM
|
#32
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 5,596
|
Quote:
Originally Posted by brewer12345
Highly unlikely, given what I know of the industry, the product and industry regulation. Far more likely that they underpriced the policies up front (intentionally or otherwise) and now have to catch up. A lot of insurers priced a lot of lapses into their assumptions, and LTC policyholders have proven to be a persistent lot.
|
This rings of the truth Brewer. Underpriced to win the big Gov'ment contract then repriced when reality hit the fan. And yes, Fed employees are a persistent lot. Kinda like badgers*.
*CFB, any chance you are lurking? Remember that insane badger song you posted?
__________________
I purr therefore I am.
|
|
|
09-06-2009, 07:41 PM
|
#33
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
|
Quote:
Originally Posted by Purron
*CFB, any chance you are lurking? Remember that insane badger song you posted?
|
This one? Badger Badger Badger
__________________
Numbers is hard
|
|
|
09-06-2009, 07:50 PM
|
#34
|
Moderator Emeritus
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
|
Quote:
Originally Posted by brewer12345
A lot of insurers priced a lot of lapses into their assumptions, and LTC policyholders have proven to be a persistent lot.
|
Yep, and why not. With years or decades of paid premiums behind you it would be tough to just walk away from renewing. An increae of 20% may be frustrating but not enough to make you abandon the tens of thousands that you have already paid them.
I worry about not having LTC insurance, but I still can't make the arithmetic work well enough to convince me to buy. The recent round of premium increases doesn't make it any more appealing.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.
As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
|
|
|
09-06-2009, 08:20 PM
|
#35
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 5,596
|
Quote:
Originally Posted by REWahoo
|
Yup. That's it. Now it will be stuck in my head for week just like when Bunny posted it. Hey, better than frettin' over LTC insurance, huh?
__________________
I purr therefore I am.
|
|
|
09-06-2009, 10:16 PM
|
#36
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 7,113
|
Not investment losses Humm...
Counting on lapses? The insurer didn't do a behavioral analysis of Fed employees. As a former member of that clan I can confirm that once they make a decision it is rarely revisited. Many of their benefit programs are one way roads, there are few opportunities to re-enroll. OPM trained them well.
__________________
Duck bjorn.
|
|
|
09-07-2009, 06:04 AM
|
#38
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
|
I believe the decision factors about LTC and perception of them changes as one ages.
- The younger you are, the less it seems to make sense. Seems like a poor investment. The sinking reality of failing health seems distant.
- The older you are (when you realize it might make sense), you are more likely to be uninsurable because of some sort of illness or problem that makes you a risk that the insurance company will avoid (not underwrite you). At this point in life, it looks less like an investment and more like the lack of resources is a major life changing factor (for you or your surviving spouse).
I think it is safe to say we all should plan for LTC needs (if you have any assets). This is one of those things that you need to consider while you are still fairly young. If you intend to self-insure, you need to setup a reserve fund. If you go the insurance route, better do it while you have no health problems (or that avenue will be closed to you).
The other option is to just hope for the best. It seems odd, but hoping for the best in this case is hoping for a quick exit when one goes.
|
|
|
09-07-2009, 06:21 AM
|
#39
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
|
Quote:
Originally Posted by Brat
Not investment losses Humm...
Counting on lapses? The insurer didn't do a behavioral analysis of Fed employees. As a former member of that clan I can confirm that once they make a decision it is rarely revisited. Many of their benefit programs are one way roads, there are few opportunities to re-enroll. OPM trained them well.
|
AFAIK, insurers generally are not allowed to (directly) pass on investment losses to policyholders, at least outside of participating policies (which these are not). OTOH, the industry as a whole priced LTC with certain lapse assumptions (3% a year plus or minus from what I understand). It turns out that lapses have been a lot lower. This is also an extremely long duration policy (possibly the longest of any major product line) so small mistakes quickly become big ones.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
|
|
|
09-07-2009, 07:45 AM
|
#40
|
Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
|
Insurance is insurance so what can you do. I paid for disability ins for 25 years and never got to use it. Also pay 7K a year for my whole life policy and have done so for over 20 years. I pay health ins and auto ins and home owners ins. So should I hope that I got to use the life ins, had a car accident, hope my house burns down or was disabled?
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|