Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 09-08-2009, 08:24 AM   #61
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Quote:
Originally Posted by Rich_in_Tampa View Post
...
One approach (one which would be first on my list if I had to decide today) is to buy life insurance for each of us (or maybe first-to-die) in a moderate amount in the range of 3 years expenses. This would allow tapping your retirement portfolio to cover NH costs, knowing that upon death the life insurance benefit would make the surviving spouse whole again.
You mentioned that approach before in previous posts. It seems like a reasonable approach to mitigate the risk of the survivor being ruined. Perhaps it has less risk than LTC Insurance considering the potential for premium rate increases. You can get a rate guarantee with term insurance.

Some considerations:

  • You need to be insurable. This is one of those situations where you generally need to be proactive. Similar to LTC, and health insurance. Once you have certain health problems... Insurance companies will not underwrite you... or they will rate you and the costs will be high at best.
  • In most cases term ins at the longest period is for 30 years. Depending on your longevity, you may have some risk exposure. The alternative is Whole Life (which IMO is generally not a great deal).
  • If you buy a life policy for that purpose, you would need to factor in inflation. Which probably means at least doubling the face amount for what would be needed in today's dollars. If you assume the event will occur after 75 years of age.
  • Check out the Medicaid laws in your state. In some cases, a life policy may be considered an asset that is factored into Medicaid calculations. If you have adequate assets and Medicaid does not come into play... then this would not be a factor. Just to be on the safe side... or at least to understand your risk exposure, I would check it out.
__________________

__________________
chinaco is offline   Reply With Quote
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!

Old 09-08-2009, 08:51 AM   #62
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Don't some life policies allow early withdrawals against the death benefit to meet medical needs?
__________________

__________________
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.
Rich_by_the_Bay is offline   Reply With Quote
Old 09-08-2009, 09:32 AM   #63
Full time employment: Posting here.
 
Join Date: Oct 2006
Posts: 898
My wife and I have had the FedLTC since the program started; we're going to stick with this program despite the run-up in premiums for our age and automatic inflation adjustment group -- BTW, the run-up is significantly less steeper for older people.

The new rates are frozen for another 7 years; with the inflation adjustment (where my daily benefit amount has increased a lot since we bought into the plan), this doesn't strike me as such a real bad deal. I think "underpricing" might be more of the culprit based on underestimating the number of insured people who would migrate away from the policies. I guess, if enough people get upset about these increases and drop coverage, this might ironically keep premiums level in the future!

Here's my thinking about this insurance coverage: (1) I know Medicaid fairly well as my Mom is currently under that program and has been in a nursing home for the last two years; I don't want to rely on Medicaid to finance any long term health care; you have to be penniless and asset broke to use Medicaid and your choices are quite limited; (2) I want to preserve some assets and my small estate for my children and figured that LTC insurance would put me ahead of the game by $350K-500K if I need it; (3) I can pay my current premiums of $2160 (for both of us and the extra $500 plus we'll incur after this increase) from my HSA to soften the blow; (4) my payments give me a deduction on my State tax return; (5) I like the basic features of the program and the home care aspect of paying a relative to care for us; (6) I don't look at this as simply long-term care insurance occasioned by old age medical problems -- a good friend of ours recently suffered a stroke from hip replacement surgery and long-term health care insurance could have helped him out, immensely and (7) with the Federal LTC, I'm not really concerned with payment risk from the insurer.
__________________
Someday this war's gonna end . . .
ChrisC is offline   Reply With Quote
Old 09-08-2009, 10:00 AM   #64
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
I guess I feel the same way about LTCI as I do about some senior entitlement programs: the economics look unsustainable and so I just don't trust it to be there under reasonable terms in a couple of decades, even if I do buy now. Plus there's also the potential that government may take a greater role in providing it in the future, and if that's the case I could feel like a schmuck for paying premiums for a long time which may not ultimately be necessary. (Don't want to discuss the politics here; just noting that there is some political risk in buying now.)
__________________
"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)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 09-08-2009, 04:07 PM   #65
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Quote:
Originally Posted by Purron View Post
If DH and I hadn't spent so many years immersed in the reality of nursing home care, we would likely have a very different perspective. Even so, we do plan to analyse this carefully before shelling out an extra 25% for premiums. Your input will help us do this.
My spouse says she's shelling out for oxycontin at the first sign from either one of us that we can no longer spell backwards...

... it's really keeping me on my toes.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 09-08-2009, 07:53 PM   #66
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by Rich_in_Tampa View Post
Don't some life policies allow early withdrawals against the death benefit to meet medical needs?
At least there used to be (have not looked in a long time) life policies that had a specific LTC benefit. I believe John Hancock sold this type of product. But naturally they charged handsomely for it.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 09-08-2009, 08:13 PM   #67
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Purron's Avatar
 
Join Date: Nov 2007
Posts: 5,584
Quote:
Originally Posted by ChrisC View Post
My wife and I have had the FedLTC since the program started; we're going to stick with this program despite the run-up in premiums for our age and automatic inflation adjustment group -- BTW, the run-up is significantly less steeper for older people.

The new rates are frozen for another 7 years; with the inflation adjustment (where my daily benefit amount has increased a lot since we bought into the plan), this doesn't strike me as such a real bad deal. I think "underpricing" might be more of the culprit based on underestimating the number of insured people who would migrate away from the policies. I guess, if enough people get upset about these increases and drop coverage, this might ironically keep premiums level in the future!

Here's my thinking about this insurance coverage: (1) I know Medicaid fairly well as my Mom is currently under that program and has been in a nursing home for the last two years; I don't want to rely on Medicaid to finance any long term health care; you have to be penniless and asset broke to use Medicaid and your choices are quite limited; (2) I want to preserve some assets and my small estate for my children and figured that LTC insurance would put me ahead of the game by $350K-500K if I need it; (3) I can pay my current premiums of $2160 (for both of us and the extra $500 plus we'll incur after this increase) from my HSA to soften the blow; (4) my payments give me a deduction on my State tax return; (5) I like the basic features of the program and the home care aspect of paying a relative to care for us; (6) I don't look at this as simply long-term care insurance occasioned by old age medical problems -- a good friend of ours recently suffered a stroke from hip replacement surgery and long-term health care insurance could have helped him out, immensely and (7) with the Federal LTC, I'm not really concerned with payment risk from the insurer.
ChrisC - DH and I have also been in the Fed LTC program since the get go. Your comments make me feel much better about sticking with it. Yeah, I don't like the premium increases, but there are many things to offset this downside. I also like the home care option and security of this program being through the Feds which reduces repayment risk from the insurer.
__________________
I purr therefore I am.
Purron is offline   Reply With Quote
Old 09-09-2009, 04:07 AM   #68
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Quote:
Originally Posted by Rich_in_Tampa View Post
Don't some life policies allow early withdrawals against the death benefit to meet medical needs?

I think so. Life insurers are getting creative with the riders that can be attached to policies for a variety of life events (for Boomers). This would require some homework.

At our age, one of the most important factors is insurability. There is not much of a way (at least that I know) to mitigate that type of financial risk without taking some risk (paying something). As Brew stated in so many words... insurance is not cheap.

If you think the life insurance approach is the way to go, I would suggest you do it while you and your DW are healthy. You can always let the policies lapse if you change your mind or find a better approach later. You initial premium money will be gone but you will have had coverage during that time.

These are complex decisions for which there is no clear answer.

If you are an annuity kinda guy.... there are some hybrid products on the market that you might consider... but I do not know of a SPIA that offers that type of rider. It might be worth looking into.

With any of these products... I would only enter into a contract with a Top Rated insurer.... especially for an individual policy. If it is a group policy your choices will be limited.
__________________
chinaco is offline   Reply With Quote
Old 09-18-2009, 07:40 AM   #69
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
freebird5825's Avatar
 
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,017
This comparison chart for former Fed LTC 1.0 vs new Fed LTC 2.0 may have been posted before...there sure are lots of changes.
More paperw*rk to go over...

http://www.ltcfeds.com/091109_plan_comparison.pdf
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote
Old 09-18-2009, 09:58 PM   #70
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Purron's Avatar
 
Join Date: Nov 2007
Posts: 5,584
Quote:
Originally Posted by freebird5825 View Post
This comparison chart for former Fed LTC 1.0 vs new Fed LTC 2.0 may have been posted before...there sure are lots of changes.
More paperw*rk to go over...

http://www.ltcfeds.com/091109_plan_comparison.pdf
Thanks. Good info and I hope to hear comments from others on this. Still have heartburn over this on page 3:

"Your premium will not change because you get older or your health changes or for any other reason related solely to you. Premiums are not guaranteed. We may only increase your premium if you are among a group of enrollees whose premium is determined to be inadequate. While the group policy is in effect, OPM must approve the change."

This was not crystal clear when I enrolled. Don't think I'm alone in this. I also have some questions about OPM's approval of the change.

Plus, does anyone else feel uncomfortable with the fact that MetLife and John Hancock had the first contract, John Hancock alone has the new contract, and they were "partners" from the get go?

Freebird, you noted this earlier in the tread:

"Don't know if this was already answered, but the original Fed LTC contract was awarded to both JH and MetLife, as some sort of joint venture. The revised current contract only has JH as the insurer."
__________________
I purr therefore I am.
Purron is offline   Reply With Quote
Old 09-19-2009, 08:41 AM   #71
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
I would not get too excited about JH being the only insurer going forward. The LTC business has been getting more concentrated as all but the mist committed companies drop out of what is still a niche market. JH is one of the largest US life insurers and it is owned by Manulife, a mammoth, well diversified, creditworthy (IMO) Canadian life insurer.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 09-19-2009, 08:59 AM   #72
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Purron View Post
Premiums are not guaranteed. We may only increase your premium if you are among a group of enrollees whose premium is determined to be inadequate. While the group policy is in effect, OPM must approve the change."
This is the main reason I'm not buying LTC for the foreseeable future.
__________________
"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)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 09-19-2009, 11:23 AM   #73
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Purron's Avatar
 
Join Date: Nov 2007
Posts: 5,584
Quote:
Originally Posted by brewer12345 View Post
I would not get too excited about JH being the only insurer going forward. The LTC business has been getting more concentrated as all but the mist committed companies drop out of what is still a niche market. JH is one of the largest US life insurers and it is owned by Manulife, a mammoth, well diversified, creditworthy (IMO) Canadian life insurer.
I think you're right Brewer. I'm sure you can understand the temptation to imagine a nefarious conspiracy when you have the federal government and mega insurance companies involved....
__________________
I purr therefore I am.
Purron is offline   Reply With Quote
Old 09-19-2009, 02:51 PM   #74
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by Purron View Post
I think you're right Brewer. I'm sure you can understand the temptation to imagine a nefarious conspiracy when you have the federal government and mega insurance companies involved....
Actually, I cannot, since I have been a close observer of insurance companies and (to a much lesser extent) the gummint for many a year. But tinfoil hats never go out of style...
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Still not a lost cause for premium hikes for Fed LTC
Old 11-19-2009, 11:04 AM   #75
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
freebird5825's Avatar
 
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,017
Still not a lost cause for premium hikes for Fed LTC

Latest action on Fed LTC premium hikes and letters with misinformation.

Congressman Seeks Hearing on Federal Long Term Care Insurance Premium Hike
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote
Old 11-19-2009, 11:24 AM   #76
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by freebird5825 View Post
Latest action on Fed LTC premium hikes and letters with misinformation.

Congressman Seeks Hearing on Federal Long Term Care Insurance Premium Hike
As far as I know, all LTC policies are subject to repricing for an entire group. That's been in the literature of all the plans I've seen, and it's the main reason I won't buy one. They tout "locking in low rates while you are young," but they reserve the right to raise rates anyway.

If Congress is going to fight this fight for the federal plan, I wish they would do so for ALL LTC policyholders, not just the ones with federal bennies.
__________________
"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)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 11-24-2009, 04:05 PM   #77
Full time employment: Posting here.
friar1610's Avatar
 
Join Date: Jun 2002
Posts: 821
Quote:
Originally Posted by Dreamer View Post

Sorry, that I can't help, but I am unsure what to do. If anyone figures out a good solution, I hope that they will update this thread. Thanks in advance.
I have not read all the posts in this thread, so I don't know exactly what has been discussed (although I did read the initial posts a while back.) I think I am going to opt for the 4% annual increase and keep the premiums level.

I have a 3 year plan; my wife has a 5 year. We are 64 and 63, respectively. I've been in the plan since shortly after its inception. (Was part of the "Federal family" by being retired Navy.)

But is mine the optimal answer? Hell - I dunno.
__________________
friar1610
friar1610 is offline   Reply With Quote
Old 11-24-2009, 08:17 PM   #78
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Purron's Avatar
 
Join Date: Nov 2007
Posts: 5,584
Quote:
Originally Posted by friar1610 View Post

But is mine the optimal answer? Hell - I dunno.
This is the wisest comment I've ever read regarding LTC insurance.
__________________

__________________
I purr therefore I am.
Purron is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
long term care insurance gerrym51 Health and Early Retirement 3 05-18-2008 03:23 AM
More on long term care insurance.... ziggy29 Health and Early Retirement 25 01-30-2008 12:36 PM
Long Term Care Insurance udenmkh Hi, I am... 1 10-19-2007 07:13 AM
Long Term Care Insurance Dawg52 FIRE and Money 44 10-18-2007 09:31 PM
Long Term Care Insurance stephenandrew Young Dreamers 11 08-13-2007 05:17 AM

 

 
All times are GMT -6. The time now is 01:29 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.