thoughts on long term care policy

[Jack_Pine]

We recently applied for a 3 year policy with a 3% compound $200/day policy through MOO. I was accepted but DW was rejected due to medical reasons so we decided to move forward with my coverage as I have longevity in my family with my dad requiring LTC for 3 months before passing at the age of 82 and my mother has been in a nursing home for almost a year now and she's 91.

Interesting, thanks for sharing. I think this is one of the biggest issues facing us ready to RE,


Thoughts?

 

[REWahoo]

Interesting, thanks for sharing. I think this is one of the biggest issues facing us ready to RE,

Thoughts?

You'll get a far better response if you compose a specific question or two...

 

[Jack_Pine]

You'll get a far better response if you compose a specific question or two...

K, lets try this.

Is LTC needed in your plan?

Or,if not , How much would you need to self insure?

 

[Purron]

DH and I have LTC insurance. It's not cheap. Gives us some peace of mind though. Poor folks may be able to rely on Medicaid and wealthy folks can self insure. Seems to us those in the middle, like us, are most at risk. We're sensitized though since we had a loved one in a nursing home for decades before she passed on. That has a way of changing you.

 

[sengsational]

I don't think so but am willing to listen. If it did it would relate to the 5 yr back look thing.

BIL sells Farmers and we are going to sit down with him next month to discuss. Like him but don't trust anyone who gains from the sale....semi mega corp offers one and I will investigate......

We are currently leaning against and hoping we can self insure. That is always at risk though. Maybe an off-shore account? (kidding)

You can also look to kids/relatives after you spend-down and need a little bit to lift your lifestyle a bit. I suspect it would be illegal to have an undisclosed contractual arrangement, but say you gave them "no-strings" money before anybody gets sick with the "suggestion" that they don't spend it until you die. They might feel sorry for you once you've had to spend-down and buy YOU a gift now and then, like maybe paying your utilities, hehe.

 

[sengsational]

We're sensitized though since we had a loved one in a nursing home for decades before she passed on. That has a way of changing you.

I'm not sure what to make of the statistics that say average nursing home stays are in the, what, 3 year range? I just seems like there are a lot of stories about so and so was in the NH for 10-20 years, so I'm not sure how the 3 year thing could work.

 

[Jack_Pine]

DH and I have LTC insurance. It's not cheap. Gives us some peace of mind though. Poor folks may be able to rely on Medicaid and wealthy folks can self insure. Seems to us those in the middle, like us, are most at risk. We're sensitized though since we had a loved one in a nursing home for decades before she passed on. That has a way of changing you.

Ballpark......cost..if you are willing to share? /have they changed over the years?

 

[Katsmeow]

I'm not sure what to make of the statistics that say average nursing home stays are in the, what, 3 year range? I just seems like there are a lot of stories about so and so was in the NH for 10-20 years, so I'm not sure how the 3 year thing could work.

Lots of people who go into a nursing home are not there for very long at all. We tend to think the most about people who go into a nursing home and stay there for years and then die. However, many people who are in nursing homes actually recover sufficiently to be discharged and aren't there all that long.

 

[Beryl]

I am very interested in this topic as well. I have done some research and have heard everything from- You have to have it...to at some savings amount, it does not make sense....to it's a rip off, don't pay out, too many restrictions.......

This is what my research yielded also. They say that I'm at a good age to get it but since I don't have a spouse to worry about, I'll pass. After doing the math, I think I can self-insure.

 

[Ally]

It costs us at age 61 $2000 annually for my husband and it covers about 4 years in a home or more out of a home. It allows for inflation of 5%. When my mom was in a nursing home or later at home with 24 hour care, it was $70000 a year. She needed full time for 4 years.

 

[Jack_Pine]

It costs us at age 61 $2000 annually for my husband and it covers about 4 years in a home or more out of a home. It allows for inflation of 5%. When my mom was in a nursing home or later at home with 24 hour care, it was $70000 a year. She needed full time for 4 years.

Wow. Yeah, my dad was only in for a year, but it was 80k.

 

[Z3Dreamer]

So here is how it works. DW and I signed up for LTC in our 30's through the professional association we belong to. Annual premiums were based on age at issue. Now in our mid-50's premiums are $400 a year each and can increase by maybe 5% or so per year. Benefits are for a few years at a few hundred dollars a day. Nursing home costs are pretty much based on location. Mom was at $8,000 a month inside the DC beltway. $5,000 a month in rural south. Care was similar. If you served in military during a time of war (did not need to see battle) you may qualify for Aid and Attendance. HUGE benefit. Income limit is AFTER deducting nursing home costs. Otherwise there is a whole industry on Medicaid qualification and Medicaid trusts, etc.

 

[obgyn65]

I bought LTC last year. Turning 48 this year.

So who here does LTC?

 

[Live And Learn]

When I looked into it for DW and I (ages 48 and 52, two years ago), premiums were about 7k / year. I have $110k set aside outside of my portfolio to self insure. That will cover approximately 14 months. That may be enough, or it may not be. My only "hope" is that the first person only needs 14 months of care and that the second person can use the value of the home for his / her care when the time comes.

I did look at a policy recently that was a one time payment and would cover 5 years of care. I think it was $100k for the policy.

 

[Katsmeow]

When I looked into it for DW and I (ages 48 and 52, two years ago), premiums were about 7k / year.

That seems really expensive. I had thought about looking into it, but we are quite a bit older than that so it would clearly be too expensive at this point if those are typical prices.

 

[Corporateburnout]

That seems really expensive. I had thought about looking into it, but we are quite a bit older than that so it would clearly be too expensive at this point if those are typical prices.

Earlier this year we were quoted premiums from 6 companies ranging from $8000/year to $2000 for both of us. We went with MOO policy for 3 years 200/day with a 3% inflation and a premium of $2800 but since DW was denied for medical reasons I lost the spousal discount and ended up paying $1900/year.

BTW I will be 60 in a few months. I hope this helps.

 

[Brat]

I think that in addition to actuarial issues the fact that interest rates are very low is contributing to the increase in costs. Insurance companies aren't getting much of a return on their customary investments.

 

[wmc1000]

Here is an article to cover some situations where income exceeds medicaid eligibility - Qualifying for Medicaid with Miller, Pooled or other Income Cap Trusts - Paying For Senior Care

and if only 1 spouse need scare here is some info that might be of use -

Qualifying One Spouse for Medicaid
Often times, one spouse will require care in a residential facility and the other remains healthy and living at home; the spouse living at home is known as the “community spouse”. Their income, if pooled, can disqualify the needy individual for Medicaid. However, it is possible to separate their incomes and allocate proportionally so that the needy individual qualifies for Medicaid and the community spouse maintains enough income to continue living independently. If done incorrectly, the community spouse may not have enough income to live on and the home could be forfeit to the state. For these reasons, it is strongly recommended that couples in this situation consult with Medicaid qualification expert.

 

[pb4uski]

DW and I are 58 and got quotes recently that were annual premiums of $3,000-$6,000 for a $150/day benefit and policy max of $270k (today's $ and ~ 5 years). Local nursing home private pay rates are ~$280/day so the insurance would only cover a little over half the cost.

At this point I am like a deer in the headlights. The cost seems high in relation to the benefits even before considering the risk of premium hikes so for now I'm self-insuring.

 

[Purron]

Ballpark......cost..if you are willing to share? /have they changed over the years?

We pay $351/month for a "cadillac" policy for both of us purchased through the Federal Employees LTC Insurance program when it was first offered. It's gone up about $70/month since we purchased it.

 

[JakeBrake]

DW and I bought two identical John Hancock LTC policies through my Megacorp at age 60. No employee or spouse could be excluded for health reasons. This policy is no longer offered. The coverage for each policy is as follows:

Nursing Home Daily Maximum Benefit $230.00
Home Health Daily Maximum Benefit $172.50
Lifetime Maximum Benefit $419,750.00
Monthly Premium For Each Policy $131.96

JH can make inflation adjustments, but we are allowed to keep the same coverage at the same premium. Our area is way below the national average for LTC costs.

 

[Newventurer]

LTC

I agonized about this for a few months.

DW had a Genworth plan available to her at work. I could have also qualified but I decided that we would play "'one in and one out". Since MY DW is a few years younger and supposed to live longer decided to gamble that way.

The thing that bothered me about the comment some make "I am self insured" is that it may not take into account a covered illness in the near term, unless the funds are already set aside, up front.

Details

DW - 49

monthly expense $57.98
Elimination period 90 days
Lifetime max $108,000
Facility care max $3000 per month
Nursing facility benefit $3000
Assisted living facility benefit $3000

 

[Katsmeow]

What type of medical things disqualify someone from long-term care insurance? I mean I know that anything showing current dementia/Alzheimers or inability to take care of oneself would disqualify.

But I was under the impression (perhaps wrongly) that there wasn't the kind of stringent underwriting that you see with medical insurance.

 

[Newventurer]

Since DW qualified I can't say exactly what might have disqualified her, but the medical questionnaire was excruciating. And of course they did follow up with her doctor to verify it all.

 

[Chuckanut]

Here are a few things I read today while listening to a consumer radio show.

1. Insurance companies are losing big on past LTC policies. They figures most people would keep them only a few years and drop the insurance before needing it, or, that if they used the insurance it would only be for a few months at most. Both, turned out to be wrong.

2. Insurance companies have over reacted to the the above and as a result current new policies are too expensive for what they offer. Today is not a good time to buy this product. It may take a few years for things to settle out.

3. Some insurance companies are tying life insurance to a rider for LTC. The jury is out on whether this is a good product.

4. Buying insurance in the lower 50's or younger is a bad idea since there is no guarantee that it will be affordable 30-40 years in the future when you will most likely need it. You may end up paying for years, cancelling when you can no longer afford it, and thus lose the benefits of these payments exactly when you are most likely to need it.

Take what you like and leave the rest.