Nords said:
I think that the federal insurance is actually written by John Hancock & Metlife, but that could have changed in the last few years.
When I offered my Dad the chance to buy the federal LTC insurance two years ago, it turned out that he had a better deal directly from Hancock.
Right, John Hancock and Metlife still underwrite the federal program. The program for federal employees/military is a huge pot of customers, and what i meant to say is that there are some benefits of being part of that huge pot--the rates can only go up if they raise rates for everyone, and if either of these companies were to pull out of the biz, I think there'd be a big effort to fill the void.
For those interested, here's a link to the federal OPM LTC Insurance Program rate calculator.
https://www.ltcfeds.com/ltcWeb/do/assessing_your_needs/ratecalc
Even folks who don't qualify for the federal program might want to see how the rates they've been offered stack up, and how the premiums change if they wait. As we covered in a previous conversation, the "inflation protected" premium plan is a little confusing. If you select "Automatic Compound Inflation Protection" (ACIP) then the premiums never change at all--a 5% annual escalation in the benefit is already built in. If you choose the "future purchase option" (FPO) then every two years you can buy more insurance to keep up with inflation. Here's the catch: Under the FPO plan you'll be buying insurance coverage for somebody who is your present age at that time. This resuts in
skyrocketing premiums just when you are most likely to need the coverage. If we do end up buying insurance, I'm sure to buy the ACIP plan. To keep costs low, we'l probably buy just $125 per day coverage for 3 years each. That can be stretched to cover a longer period if we can use less expensive home care. The coverage period might also give the non-incarcerated still healthy spouse a chance to shelter at least some assets and stave off financial ruin while the affected spouse eventually qualifies for Medicaid (I think there's a 3 year lookback period now).
Combined cost for both of us for this minimalist plan is approx $130 per month because we are fairly young. That premium is not supposed to jump. In the future, we'd be paying with inflation-reduced dollars, so the real bite goes down in later years.
Still, $130 every month isn't peanuts--that's a lot of beer and pizza. Given the low-likelihood that we'll need it, I'm very tempted to just assume the risk. But--would
I really be taking the risk, or am I passing it to my daughter?
Definitely not an easy decision for us.