Long Term Care strategies...?

[davismills]

If you're caring for aging parents, I'd suggest an elder lawyer. I waited too long for my Mom and she was just 30K away from medicaid when she passed. I must say that her care was excellent. The costs were high because of her Alzheimer's affliction. She was in these facilities for over 7 years.

 

[Kauai bound]

If you're caring for aging parents, I'd suggest an elder lawyer. I waited too long for my Mom and she was just 30K away from medicaid when she passed. I must say that her care was excellent. The costs were high because of her Alzheimer's affliction. She was in these facilities for over 7 years.

Thanks for the suggestion for an elder lawyer, and when the time comes, I should seek professional advice. Both my parents and father-in-law are not yet at that stage that requires our care (all in their 80s), but my wife and I would be the primary siblings to care for all of them. I'm just trying to think ahead in life with these kind of issues.

 

[EastWest Gal]

I bought LTCI about 3 years ago and yes, our premium went up this year. I see LTCI as a hedge against an early major disability, such as a stroke or an accident when we are younger. Or early onset Alzheimer's. There is Alzheimer's and longevity in my family hx. We could probably withstand LTC with one of us for a few years, but not both. Our plan has COLA built in, and is a couples' plan.

If we get old or rich enough we may drop it. Even paying 20 years of premiums will be cheaper than LTC for two years for just one of us.


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[Hamlet]

Yup, this is a deal-breaker for me. Would anyone buy life insurance in which the insurer could just raise rates every year? What prevents the insurer from collecting the extremely low-risk premiums early on, and then raising everyone's rates to the point that they are forced to drop the policy?

Along with LTC insurance I'll need LTC insurance rate insurance.

Most of these policies don't remove the financial risk that they are supposed to, IMO.

This is my big issue with LTC - there is no "locking in" low rates - they can raise the rates, significantly even to the point of making it unaffordable. There are posts here from a few years ago where people had rate increases of 20% plus.

Here are some threads.
http://www.early-retirement.org/forums/f38/just-got-first-genworth-ltc-increase-72090.html

http://www.early-retirement.org/forums/f28/genworth-ltc-rates-increasing-steeply-on-8-1-a-61985.html

 

[marko]

At this point, I am planning to self-insure.

My impression is that only a small part of the population requires an extended (ie lifelong) stay in LTC.

-gauss

My "Elder Law" attorney, advised that the average stay in a nursing home is about 3 months before.........you know...

Of course, there are the stories of people being there for 15 years too but they seem to be the exception.

It can be a crap shoot.

 

[REWahoo]

Previously posted but worth a second look...

 

[gauss]

Thanks for sharing... wow 400K. I know I can only make a LTC insurance choice for my wife and I, but I worry about my father-in-law. My mother-in-law passed away about 6 years ago; both my wife and father-in-law were able to care for her at home in lieu of a nursing home... long duration. My parents can afford the expense of the average LTC, but I don't think my father-in-law can. What happens to people who do not have LTC insurance and are not self insured when they need LTC? There has to be a safety net in our country, but not sure.

That would be part of the Medicaid program -- LTSS to be specific.

-gauss

 

[martyp]

My DW and i bought LTC insurance many years ago. Rates were pretty reasonable then. They did go up recently and we modified our coverage from lifetime benefits to a 10 year benefit. I'm not sure why people would expect rates to be locked-in. What insurance has locked-in rates? OK. Maybe those life insurance policies advertised on late late night TV by aging and forgotten actors.

It is also true that if you are disabled for a long time or have to start collecting benefits soon after getting the insurance then you will make out better financially. But that is true of all insurance. That's how insurance works.

I think most people spend 1-3 years in a nursing home. You can do the premium math and figure out if you want to take the risk to self insure. However, you can choose to self insure but then you have to be willing to put the money aside for just this purpose. And then again . . . this is true for all types of insurance.

People think about insurance too much like other investments. They expect to make money on the deal. Insurance is about assessing risk and achieving piece of mind. Everyone will have their own take on that.

 

[marko]

People think about insurance too much like other investments. They expect to make money on the deal.

As do the insurance companies...they seem to have the nicest, biggest buildings in town, so somebody's winning at this game.

 

[Kauai bound]

Yup, this is a deal-breaker for me. Would anyone buy life insurance in which the insurer could just raise rates every year? What prevents the insurer from collecting the extremely low-risk premiums early on, and then raising everyone's rates to the point that they are forced to drop the policy?

Along with LTC insurance I'll need LTC insurance rate insurance.

Most of these policies don't remove the financial risk that they are supposed to, IMO.

Maybe the LTC insurance products need to be more consumer equitable with some market competition and possible government regulation on the product? It kind of reminds me of that whole life insurance products people typically purchased instead of pure term life insurance.

 

[Kauai bound]

My DW and i bought LTC insurance many years ago. Rates were pretty reasonable then. They did go up recently and we modified our coverage from lifetime benefits to a 10 year benefit. I'm not sure why people would expect rates to be locked-in. What insurance has locked-in rates? OK. Maybe those life insurance policies advertised on late late night TV by aging and forgotten actors.

It is also true that if you are disabled for a long time or have to start collecting benefits soon after getting the insurance then you will make out better financially. But that is true of all insurance. That's how insurance works.

I think most people spend 1-3 years in a nursing home. You can do the premium math and figure out if you want to take the risk to self insure. However, you can choose to self insure but then you have to be willing to put the money aside for just this purpose. And then again . . . this is true for all types of insurance.

People think about insurance too much like other investments. They expect to make money on the deal. Insurance is about assessing risk and achieving piece of mind. Everyone will have their own take on that.

Great point, I have been in the insurance industry for the last 29 year, primarily in loss prevention and risk assessment end of things. Insurance is a misunderstood industry, and can be not very consumer friendly at time and I believe does require government regulators. Certain kinds of insurance is extremely profitable and other lines of insurance are not.

 

[Kauai bound]

As do the insurance companies...they seem to have the nicest, biggest buildings in town, so somebody's winning at this game.

That made me laugh and put a smile on my face... great point. I guess it all depends on what kind of insurance is peddled. I think life insurance is extremely profitable. LTC insurance products just need to get better for us the consumer.

 

[brewer12345]

My DW and i bought LTC insurance many years ago. Rates were pretty reasonable then. They did go up recently and we modified our coverage from lifetime benefits to a 10 year benefit. I'm not sure why people would expect rates to be locked-in. What insurance has locked-in rates? OK. Maybe those life insurance policies advertised on late late night TV by aging and forgotten actors.

Actually, in most other product lines insurers are slobbering over themselves to sell you stuff with locked-in, guaranteed pricing. In the life insurance business, for example, by far the dominant products are level term (locked-in pricing) and guaranteed universal life (locked-in pricing). LTC does not have locked in pricing any more because the insurers have screwed up the pricing and investments backing these policies so many times that they cannot afford to get badly burnt yet again. There is a reason fewer and fewer companies sell this stuff.

 

[candrew]

My Dad bought a LTD policy at age 70. Prior to his death at age 90, total premiums paid out = $70,000.

Dad had a major stroke, spent two nights in the hospital (covered by Medicare), was transferred to hospice and passed away peacefully a day and a half later. Medicare also paid for that. Although Dad could have been kept alive with a feeding tube, those were not his wishes and his advance directives were clear.

One can make the argument that LTC is a good buy. In the case of my Dad - not so much.

Statistically speaking - 1 in 4 will need some form of LTC. Average LOS <6 months. God forbid that I should require LTC at all, much less a stay >6 months. I think at that point I'd rather have the kiddos take the old Inuit approach - put me on an ice flow and let me go. Both DW & I have clear advance directives in place.

My decision, at least for now, is to self insure.

 

[RE2Boys]

Some of us here wish insurance companies would offer high deductible LTCI with correspondingly lower premiums. I could be interested in a policy that did not pay a penny for the first two years of LTC and then paid for the next 8 if needed. I can easily afford for one or both of us to need 2 years of LTC. It's the small probability of needing a decade of care that concerns me. I'm assuming that a policy like this would be cheap since few folks need over 2 years of institutionalized care. That is, many people paying in a small premium and few collecting. So far, insurance companies don't offer such a thing.

I would be extremely interested in such a product but haven't found one yet!

 

[razztazz]

Originally Posted by youbet View Post
Some of us here wish insurance companies would offer high deductible LTCI with correspondingly lower premiums. I could be interested in a policy that did not pay a penny for the first two years of LTC and then paid for the next 8 if needed. I can easily afford for one or both of us to need 2 years of LTC. It's the small probability of needing a decade of care that concerns me. I'm assuming that a policy like this would be cheap since few folks need over 2 years of institutionalized care. That is, many people paying in a small premium and few collecting. So far, insurance companies don't offer such a thing.

Don't they already have these? I believe in the earlier long thread on the subject there was mention of how policies can be arranged vis a vis deductibles and exclusions just like any other insurance. Instead of the more customary 6 mo exclusion couldn't you just tell the agent, No, I want a 2 yrs exclusion? Also, wasn't it mentioned that LTC policies don't really pay forever and ever but just up to some capped number of years anyway? Two-four-five then you're maxed out?

PS: Maybe it wasn't on this board. I might be thinking of another board I read that stuff on)

 

[rodi]

I think most people spend 1-3 years in a nursing home. You can do the premium math and figure out if you want to take the risk to self insure. However, you can choose to self insure but then you have to be willing to put the money aside for just this purpose. And then again . . . this is true for all types of insurance.

Yes and no. Our plan for self insurance is to use our home equity. We have a paid for home that is worth quite a bit (High COLA coastal area in a good school boundary). If one person goes into LTC - the community spouse can downsize to a house or condo that costs HALF - and fund several years. If BOTH of us go into a LTC situation - we no longer need a house at all - and the entire equity is up for grabs.

Plus - stating the obvious (to me) here... In LTC you no longer have budget items for food, utilities, auto (insurance, gas, etc.) So some of your other budget items free up to be applied to LTC. It's not a huge savings - but it's part of what can be used to pay for the LTC.

Where this scheme falls apart is if there is a LONG and TEMPORARY LTC situation. That is pretty rare, IMO, where someone would go into LTC for a year or more, but not be there permanently. We have enough emergency fund/slush fund moneys to cover a partial year for uninsured expense for a few month stay - say after a broken hip.

This is an unusual situation where having an illiquid asset like my home can help me in retirement planning/spending. (I can't count it for withdrawal rate - but I fell very comfortable counting the equity in my LTC self insurance.)

 

[Chuckanut]

Count me in on those that would seriously consider a LTC policy with a 6 month or more self insurance time period, before the insurance kicks in.

 

[RetireAge50]

Planning to use our own money for our care (whether we are healthy or not). No inheritance needed as the kids will have their own money by then.


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