FinanceDude said:
Insert Quote
Quote from: MooreBonds on November 08, 2006, 08:01:59 PM
I seriously considered buying a 10 or 20-year term policy a few years ago. Started crunching the numbers. Same with a LTC policy. In the end, decided that I was fine just self-insuring against it, since I have quite a few years to go until my likely demise/trip to the nursing home/home care.
Wondering how you are so sure about that? Accidents can and do happen, just need to keep that in mind..........
1) I'm not married. I thought about buying a life insurance policy to benefit my charity beneficiaries since an early death would result in me being able to leave them less.
2) Based on my financial position (age 29, current NW $620k, projected 2007 end-of-year NW $1160k), even when (hopefully not if
) I do find that special someone and get married, there would be no reason to insure my life since if I die soon, the family would have just as much from the insurance policy (assuming a $1MM policy) as they would from my total NW.
3) I've priced up one or two LTC policies. If you want inflation protection, it's fairly costly..and even then it will only pay out so much for so long, with a minimum 30/60/90 day activation period, and for only so many years (wouldn't really want to pay for an unlimited years LTC policy), I figured I'd keep the cash now, invest it at 7.5% or so long-term, and let it grow and take my chances. Compared to life/health/car/homeowner's/umbrella insurance, I don't feel that LTC quotes are as transparent or as easily quantifiable or as easily analyzed given the premiums. As such, I don't feel comfortable forking out the premiums for it.
I suppose I view it similar to disability insurance. LTC and disability are somewhat similar in that you don't usually hear (at least, I don't) of many people talking about someone they know that has made a claim on LTC or disability. Sure, I know that they are out there, but I get the feeling that when you combine the various catches/clauses in dis/LTC, add in the cost of the policy, and I just can't as easily relate it to my analysis as I can a relatively simple health/life policy (i.e. no question of the value to your heirs if you die...but what is the cost/benefit of losing an eye, or an arm, and is my insurance premium worth it given what the insurance company might pay out. What if I just lose partial function of my leg?).
I'm not opposed to complex analysis - I just don't get the feeling that, given my circumstances, it would be worth the insurance premiums. Sure, it's a risk, but one that I'm comfortable taking, with a downfall that isn't as severe as it could be for many others.