Indeed. Of course it's your planning, not your uncle's, that matters to you. If you don't trust yourself to understand and properly prepare to be self-insured for LTC, the consequences could be not to your liking. Well, you'll pass down more or perhaps less than if you self-insured depending on how much LTC eventually costs you vs the premiums you pay. This sounds too good to be true syd03. A small fraction of $130k is, say, $50k. For that you get unlimited, lifetime LTC coverage? What is the actual amount you paid? What are the LTC and life insurance benefits? The statistics say we're over-prepared. But that's sort of a universal trend on this forum. You know, belts and suspenders kind of folks!
But, having said all that, we're still evaluating Type A CCRC's. We're not against the idea of insuring for LTC in some form, even though we can self-insure, but we're not sure of which path to follow. So many pros and cons........
1) Appreciate the feedback youbet. Again, many may understand perfectly how to anticipate LTC expenses, others may not. I do, but I also like the way we've hedged our approach. Just a personal opinion, that's all. Hence the input I provided previously. Only supplied on fwiw basis.
2) If either DW or I, or both, spend any time at all in a skilled facility the odds are high there will be more $ passed down than what we paid for the policy. Again this is unique, perhaps, to our situation in that we purchased a
single premium policy. So the future potential escalating annual premiums you reference are no longer a consideration. The policy, one payment, cost $57,000 at the time. As mentioned in a previous post, the policy does not include a death benefit, and will pay roughly 68% of 3 year stays for both spouse and self. I never said we would receive unlimited LTC coverage. It has a 3% inflation rider. Adding a death benefit option, at least as I understand it, substantially dilutes why we actually wanted the policy; LTC coverage. Don't care about a death benefit, would rather have better daily LTC reimbursement if ever necessary. We didn't select the return of premium option either, for the same reason. All those 'perks' come at a cost; you lessen the daily facility coverage amounts. So, if, and it's a big if, either of us or both ever need LTC coverage some point down the road we'll be in a better position in terms of protecting other assets. The math is simple; 2021 annual LTC care costs in my state are already averaging $135K per person for a private room. The policy max payout is $1.1M at 90 years old. At this point, the only way we come out behind is if neither needs LTC at all. And if that's the case, awesome. I'll gladly swallow the $57K in exchange for passing suddenly and painlessly. I might add too that the $57K used to pay the premium was sitting in a bank, so future investment earnings loss wasn't a major concern. Worst case (health) scenario, we paid $57K for $1.1M in LTC coverage if we both end up in skilled care for a few years. In that case, estate keeps the $1M not spent self-insuring. I should add that my understanding is the policy we purchased is no longer available exactly as outlined. This was roughly 5 years ago and we were fortunate, in that neither had any underlying health concerns at the time of application.
I fear I sound a bit like I'm propping up the insurance industry. Not my intent. I'm not a paid spokesman, I worked in the healthcare industry and DW in telecom. In fact, if I had a dime for every time we were annoyed by insurance propositions through the years.... In most cases though, got to have insurance like it or not. And many times with auto, homeowners, we've been relieved we had the coverage. LTC is a bit of an outlier, however. It's a basic gamble, really.
