thoughts on long term care policy

[tuffshed]

So who here does LTC?

I purchase it a few years back from my Megacorp. When I married the DW was able to get on the plan as well but pays for it separately. At 58 and 52 we have a pretty good deal and can continue it for the same price after leaving Megacorp so it makes sense right now to keep a spouse from going bankrupt or even just weathering an extended stay as these are allowed as well. If your Megacorp offers a plan I would seriously consider it.

 

[Chuckanut]

Here's an article on the three risks insurance companies took when they issued LTC policies,how things went wrong, and why LTC premiums have gone up so much:

Life, Investments & Everything: Insurer Nastygrams: When Long Term Care Insurance Premiums Rise

 

[youbet]

so it makes sense right now to keep a spouse from going bankrupt

I know that when a LTC sales rep comes calling, he/she frequently emphasizes "impoverishment of the surviving spouse" as a reason for purchasing LTC. But I wonder about the statistics of that risk for people like those who frequent this board, live a LBYM lifestyle and FIRE with conservative financial plans.

In our own case, DW and I can self-insure in all but the most extreme scenarios of LTC, without the fear of spouse impoverishment. Some life style changes might be required. For example, if DW were to go into a pricey NH for a decade, I'd be trimming my lifestyle significantly, but I wouldn't be "impoverished."

In a more typical situation where one of us is NH confined for, say, 3 years, the survivor would be fine financially.

Has anyone seen any actual statistics on impoverishment rates? That is, of the folks that wind up in nursing homes, how many have a spouse who is "impoverished" following the eventual death of the confined spouse (that wouldn't have been impoverished anyway)?

 

[lauren tilbury]

Can someone explain self insure, please?

 

[REWahoo]

Can someone explain self insure, please?

Pay for care out of your own pocket by setting aside money dedicated for LTC use.

 

[MichaelB]

I know that when a LTC sales rep comes calling, he/she frequently emphasizes "impoverishment of the surviving spouse" as a reason for purchasing LTC. But I wonder about the statistics of that risk for people like those who frequent this board, live a LBYM lifestyle and FIRE with conservative financial plans.

In our own case, DW and I can self-insure in all but the most extreme scenarios of LTC, without the fear of spouse impoverishment. Some life style changes might be required. For example, if DW were to go into a pricey NH for a decade, I'd be trimming my lifestyle significantly, but I wouldn't be "impoverished."

In a more typical situation where one of us is NH confined for, say, 3 years, the survivor would be fine financially.

Has anyone seen any actual statistics on impoverishment rates? That is, of the folks that wind up in nursing homes, how many have a spouse who is "impoverished" following the eventual death of the confined spouse (that wouldn't have been impoverished anyway)?

That's a good point. I don't have any numbers handy but my guess is this was a real problem before the rule change that allows assets to be divided. Now the stay at home spouse can keep the house, some pension income and financial assets that are not unlimited but also keep the spouse above "impoverished".

 

[travelover]

Can someone explain self insure, please?

For some people, I think it means a .38 in the bedstand.

 

[JakeBrake]

That's a good point. I don't have any numbers handy but my guess is this was a real problem before the rule change that allows assets to be divided. Now the stay at home spouse can keep the house, some pension income and financial assets that are not unlimited but also keep the spouse above "impoverished".

This is only true if your LTC plan in to rely on Medicaid.

 

[Bikerdude]

Here's an article published today:

Surprise! Your long-term care insurance won’t cover it - MarketWatch

"There is only one insurance carrier left offering true Group LTC Insurance, and they are very selective about the groups they will write. The other major carriers stopped selling the product over the past few years. Group insurance pricing is based on a steady flow of new entrants into the group. These group LTC policies are now closed blocks of business and as such are subject to multiple rate increases in the future. As these rate increases occur, many of the healthy lives will drop out of the group, which worsens the group experience, creating a never ending spiral."

 

[brewer12345]

I know that when a LTC sales rep comes calling, he/she frequently emphasizes "impoverishment of the surviving spouse" as a reason for purchasing LTC. But I wonder about the statistics of that risk for people like those who frequent this board, live a LBYM lifestyle and FIRE with conservative financial plans.

In our own case, DW and I can self-insure in all but the most extreme scenarios of LTC, without the fear of spouse impoverishment. Some life style changes might be required. For example, if DW were to go into a pricey NH for a decade, I'd be trimming my lifestyle significantly, but I wouldn't be "impoverished."

In a more typical situation where one of us is NH confined for, say, 3 years, the survivor would be fine financially.

Has anyone seen any actual statistics on impoverishment rates? That is, of the folks that wind up in nursing homes, how many have a spouse who is "impoverished" following the eventual death of the confined spouse (that wouldn't have been impoverished anyway)?

The problem with trying to hedge the risk with the products offered today is that they do not cover the truly devastating long term stays, only the 3 year stuff that many ER board denizens could survive. All the lifetime coverage policies are gone from the marketplace.