Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I'm so sorry your husband needs the care, but thank God you have decent insurance and help from the hospital social w*rker. Blessings on you.
whole life with LTC rider
- Thread starter livingalmostlarge
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I'm so sorry your husband needs the care, but thank God you have decent insurance and help from the hospital social w*rker. Blessings on you.
LTC
Do you mind sharing the company/name of the policy? We're 58 and often wonder if we should consider a backup now that we're seeking all our rental properties and truly retiring
Do you mind sharing the company/name of the policy? We're 58 and often wonder if we should consider a backup now that we're seeking all our rental properties and truly retiring
livingalmostlarge
Recycles dryer sheets
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I need to update this since we got news. The whole life we aren't sure is a deal but DH got ultra premium rate. Problem? He wasn't approved for the LTC rider so now I'm unsure it's worth buying.
He did get approved for an ultra premium rate for more term life insurance as well, not terrible but $900 for $1m for 15 years. We have 25 years with 14 years of it gone for $4m term for $1200.
But the $4m term is not convertible, but the new $1m 15 year term can be converted to whole life. Debating do we do this? Do we skip the priced whole life?
He did get approved for an ultra premium rate for more term life insurance as well, not terrible but $900 for $1m for 15 years. We have 25 years with 14 years of it gone for $4m term for $1200.
But the $4m term is not convertible, but the new $1m 15 year term can be converted to whole life. Debating do we do this? Do we skip the priced whole life?
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
At a minimum I would insist they inform you as to why DH was not approved for LTCi. It may affect your ability to get other LTC insurance (which, I gather, is required by your state.) IIRC you can pay a penalty instead, but I'm no expert so YMMV.
mathjak107
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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these hybrid policies are the most costliest way to get ltc coverage .
you have to tie up a mountain of money too
EXECUTIVE SUMMARY
As traditional long-term care (LTC) insurance becomes more and more expensive, and interest rates remain at ultra-low levels, planners and their clients have become increasingly interested in so-called "Hybrid LTC" policies that match together a life insurance or annuity policy with LTC coverage, especially with a more favorable set of tax rules that took effect in 2010. For many, though, the primary appeal of hybrid policies is the simple fact that, unlike their traditional LTC insurance brethren, the premiums really are guaranteed and cannot be increased in the future.
Given some of the extraordinarily large premium increases that traditional LTC coverage has experienced in recent years - especially for some of the early policies issued in the 1990s and early 2000s - a cost guarantee is remarkably reassuring.
Yet the reality is that the guarantee of LTC premiums in a hybrid policy may be entirely offset by the fact that the insurance company controls the cash value, and is under no obligation to pay a going rate of return, especially if interest rates rise.
In other words, it doesn't really matter that the insurance company can't increase the premiums on the policy by $4,000/year, when the company can simply under-pay on the interest rate by $4,000/year to accomplish the same result!
And while the cash value of a hybrid LTC policy generally does remain liquid, taking a withdrawal to reinvest to get better, higher rates would entail surrendering the policy and forfeiting the LTC coverage!
In fact, for some types of hybrid LTC policies, the arrangement contractually provides no rate of return to the client at all, and is essentially the equivalent of the client selling a call option on interest rates to the insurance company, where the more rates rise the greater the company wins at the expense of the client!
Given the unique structure of hybrid LTC policies, though, there are still several circumstances where they may be appropriate, despite the concerns about how they may perform in a rising rate environment.
In some cases, simplified underwriting provides a way to get coverage for those who otherwise couldn't get any, and in other scenarios, the favorable tax treatment alone can make a hybrid policy compelling as a place to park an existing appreciated annuity.
Nonetheless, the bottom line is that in today's environment, consumers must be careful not to engage into hybrid policies that amount to little more than offering the insurance company the unilateral right to profit if/when interest rates rise, when the reality is that simply following a "buy LTC insurance and invest the rest" philosophy would lead to a far better outcome in the long run.
https://www.kitces.com/blog/is-the-...-annuityltc-insurance-policies-just-a-mirage/
you have to tie up a mountain of money too
EXECUTIVE SUMMARY
As traditional long-term care (LTC) insurance becomes more and more expensive, and interest rates remain at ultra-low levels, planners and their clients have become increasingly interested in so-called "Hybrid LTC" policies that match together a life insurance or annuity policy with LTC coverage, especially with a more favorable set of tax rules that took effect in 2010. For many, though, the primary appeal of hybrid policies is the simple fact that, unlike their traditional LTC insurance brethren, the premiums really are guaranteed and cannot be increased in the future.
Given some of the extraordinarily large premium increases that traditional LTC coverage has experienced in recent years - especially for some of the early policies issued in the 1990s and early 2000s - a cost guarantee is remarkably reassuring.
Yet the reality is that the guarantee of LTC premiums in a hybrid policy may be entirely offset by the fact that the insurance company controls the cash value, and is under no obligation to pay a going rate of return, especially if interest rates rise.
In other words, it doesn't really matter that the insurance company can't increase the premiums on the policy by $4,000/year, when the company can simply under-pay on the interest rate by $4,000/year to accomplish the same result!
And while the cash value of a hybrid LTC policy generally does remain liquid, taking a withdrawal to reinvest to get better, higher rates would entail surrendering the policy and forfeiting the LTC coverage!
In fact, for some types of hybrid LTC policies, the arrangement contractually provides no rate of return to the client at all, and is essentially the equivalent of the client selling a call option on interest rates to the insurance company, where the more rates rise the greater the company wins at the expense of the client!
Given the unique structure of hybrid LTC policies, though, there are still several circumstances where they may be appropriate, despite the concerns about how they may perform in a rising rate environment.
In some cases, simplified underwriting provides a way to get coverage for those who otherwise couldn't get any, and in other scenarios, the favorable tax treatment alone can make a hybrid policy compelling as a place to park an existing appreciated annuity.
Nonetheless, the bottom line is that in today's environment, consumers must be careful not to engage into hybrid policies that amount to little more than offering the insurance company the unilateral right to profit if/when interest rates rise, when the reality is that simply following a "buy LTC insurance and invest the rest" philosophy would lead to a far better outcome in the long run.
https://www.kitces.com/blog/is-the-...-annuityltc-insurance-policies-just-a-mirage/
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