How many own LTC insurance?

[albireo13]

I am curious about how many folks have bought LTC insurance in retirement?
And at what age?

I am 65, just retired last year, and wife is working another 3 yrs before retiring.
We haven't looked into LTC insurance yet but, I expect we will.

It sounds like a great way to protect yourself ... also a great way to get fleeced if you are not careful!

Would love to hear experiences.

Thx.

 

[Koolau]

There is a fair amount of info on LTCi on another thread here https://www.early-retirement.org/forums/f28/ltc-coverage-one-real-life-example-110789.html

As mentioned there, I don't know that I would take out LTCi if I had the chance to go back. BUT now that I've been paying it for over 20 years AND have several "issues" I'm planning to keep it up. My understanding is that the LTCi companies got burned pretty badly (they thought most folks would eventually drop their policies - but they didn't) and now LTCi policies are harder to find and more expensive than when the LTCi "craze" stared 25 years or so back. YMMV

 

[REWahoo]

Would love to hear experiences.

This is a long thread about my LTCi experience over a period of 10 years. Too many posts to wade through but be sure to see where we ended up on post #111:

https://www.early-retirement.org/forums/f28/ltc-insurance-premium-surprise-49854.html

 

[FLSUnFIRE]

I'm still young but do not plan to but I'll adjust course throughout my retirement. My reasoning is that my likelihood of a long stay is low and the probability of my portfolio growing over the next few decades is pretty high (well under 3% WDR) which should cover my needs. I'll also have home equity I could tap if needed. Additionally, I wouldn't be surprised if there are not legislative changes/single payer schemes put in place by the time I get to the age I'd likely need LTC.

 

[Marita40]

I did for 10 years--Genworth policy. I finally cancelled it. Lost lots of money, but it got ridiculous, prohibitively expensive with it only guaranteed to keep rising. A gamble either way, but I had to quit or keep getting suckered in.

 

[The Cosmic Avenger]

As I said in that other thread, I got LTCI through my employer at less than $300/year at age 37 because it included 5% inflation adjustment per year, which seemed like a good deal compounded over 30+ years. It only recently went up to $600/year, which is still negligible for a bit more peace of mind, and I believe the increase was only to cover my employer's subsidy as it transitioned from employer-sponsored to individual, and it shouldn't be able to go up any more. This is with Unum.

 

[ProGolferWannabe]

I did for 10 years--Genworth policy. I finally cancelled it. Lost lots of money, but it got ridiculous, prohibitively expensive with it only guaranteed to keep rising. A gamble either way, but I had to quit or keep getting suckered in.

I had a similar experience with Genworth. We elected to effectively reduce our benefits (extend the elimination period) to mitigate the recurring premium increases. I can definitely understand your decision to drop the policy. I’m comfortable with my decision, but human nature being what it is, I can’t help but wonder (especially when I get my annual premium notice) if this was the best decision I ever made.

 

[street]

We have it with AFLAC which they don't sell a policies anymore. We pay $134 a month for unlimited years and would get each just under $6000 a month. We have had it about 12 years now an never have had an increase in premiums. There is a lot of other perks with the policy. It also has assistant living qualifications if there is a registered nurse that comes by and checks periodically. It doesn't have to be a full time nurse but have some sort of health programs involved with assistant living facilities. My parents had a small coverage policy and was huge for them to have the coverage. I dealt with AFLAC through the process for both and they were amazing to work with. That is why I decided to get a policy.
If I paid for the policy for 25 years I would have around 40K in premiums that would be the cost for about 6 months in a nursing home. May parent each lived 5 years apiece in a nursing home.
Yep a gamble we are in and going to stick it out now. Cost of having it isn't that expensive for now.

 

[REWahoo]

I did for 10 years--Genworth policy. I finally cancelled it. Lost lots of money...

Rather than look at it that way, realize you had LTCi coverage for 10 years but thankfully never had to use it.

I view it is similar to having a term life insurance policy.

When folks bemoan the fact they paid X amount for their LTC insurance but got "nothing in return" other than increasing premiums, I don't get it. Would they prefer they actually had a severe decline in health requiring them to file a claim on the policy? Do people feel the same way about term life insurance, wishing they had died so they "got their money's worth" from the policy?

It's all a matter of perspective.

 

[albireo13]

Thx for the links. I missed that.
My parents both lived into their 90s and didn't have LTCi.
Luckily they were able to liquidate their assets to be able to afford a CCRC.
They had their assets in an irrevocable trust which created a horror show when
trying to get into a CCRC. That is another story.

 

[Marita40]

When folks bemoan the fact they paid X amount for their LTC insurance but got "nothing in return" other than increasing premiums, I don't get it. Would they prefer they actually had a severe decline in health requiring them to file a claim on the policy? Do people feel the same way about term life insurance, wishing they had died so they "got their money's worth" from the policy?

Well, yeah, you are right. I guess the experience, however, with the rapidly and outrageously rising premium costs, left a bad taste in my mouth. So I do regret ever signing onto it. But hindsight is 20/20 of course.

 

[phil1ben]

I have not and will not buy it.

My MIL just passed away at 85. She spent $1700.00/year since 1996 for the policy. It came with a 100 day elimination period (deductible) meaning she had to out-of-pocket for 100 days before the insurance company paid anything. Long story short, she went into assisted living in June and passed away September 1.

She was not able to use one nickel of the policy. Although I understand some viewing this as "catastrophe insurance" I believe the majority of people pass without being able to collect anything.

Yes, I understand that is how insurance works........but I thought I would relate a real life experience with real dollars.

 

[folivier]

We bought a Lincoln hybrid product about 10 years ago which covers both DW and I for nursing home care and is also an annuity. We invested a fixed amount with no other payments. The value hasn't grown as expected but there is a guaranteed annuity value so it is still a good deal for us. We'll probably start drawing the annuity in a year or 2. This won't affect or diminish our LTC coverage.

 

[Lewis Clark]

I looked into LTCI ~ age 52. Chose not to buy it because it had already priced itself out of reasonableness. When I added up ~ 20 years of premiums before I was likely to need it, the total in premiums was very close to the maximum amount the policies would have paid out.

Given this reality, we chose to self-insure.

 

[The Cosmic Avenger]

Rather than look at it that way, realize you had LTCi coverage for 10 years but thankfully never had to use it.

I view it is similar to having a term life insurance policy.

When folks bemoan the fact they paid X amount for their LTC insurance but got "nothing in return" other than increasing premiums, I don't get it. Would they prefer they actually had a severe decline in health requiring them to file a claim on the policy? Do people feel the same way about term life insurance, wishing they had died so they "got their money's worth" from the policy?

It's all a matter of perspective.

Good point. We should think of LTCI much like homeowner's insurance, which many of us hardly ever use, and is there to prevent a huge loss that, even if we could afford to self-insure, would severely impact most of us even in that case, and would require putting a huge amount in that "lockbox" for an uncommon contingency (needing LTC for a much longer time than most, not just needing it at all).

 

[easysurfer]

I did for 10 years--Genworth policy. I finally cancelled it. Lost lots of money, but it got ridiculous, prohibitively expensive with it only guaranteed to keep rising. A gamble either way, but I had to quit or keep getting suckered in.

I had traditional John Hancock policy for many years. But too, things got ridiculous so I cancelled. Now, I've got a hybrid type with Nationwide Insurance. I'd rather gut suckered all at once then a little at a time.

Either way, the house wins .

 

[CRLLS]

We don't have LTCI.

I wonder if LTCIs might be a bit more attractive if they acted similar to what my Whole Life insurance policy was. IIRC, there was an option where if premiums were not paid, the cash value would be used to pay for future premiums to keep the insurance in place at the expense of the future benefit. If this strategy were to be applied to LTCI, I would imagine this could be the future guaranteed benefit would reduced by some amount. Has anyone heard of such a policy?

 

[REWahoo]

For us at least, the "LTCi or self insure" decision was not binary. As I alluded above, we approached LTC insurance similar to how we view term life.

We took out our LTCi policies at age 50 when the possibility needing the insurance in the short run was slight, but the risk to our long-term financial health could have been severe. As the premiums increased over time we reached a point where, due to decreasing life spans and an increasing nest egg, we could self insure. But rather than cancel, we opted to eliminate the 5% inflation rider and keep the insurance, locking in our benefits at $267/day. This reduced our premiums substantially, back to near the level they were when we took out the policies more than 20 years ago.

YMMV

 

[kevink]

For us at least, the "LTCi or self insure" decision was not binary. As I alluded above, we approached LTC insurance similar to how we view term life.

We took out our LTCi policies at age 50 when the possibility needing the insurance in the short run was slight, but the risk to our long-term financial health could have been severe. As the premiums increased over time we reached a point where, due to decreasing life spans and an increasing nest egg, we could self insure. But rather than cancel, we opted to eliminate the 5% inflation rider and keep the insurance, locking in our benefits at $267/day. This reduced our premiums substantially, back to near the level they were when we took out the policies more than 20 years ago.

YMMV

Like all of your posts on this topic (okay, not on JUST this topic! ) this is really thoughtful and helpful.

We went through an iteration of this thought process in helping my mother-in-law, who'd had a LTC policy through John Hancock for decades, decide whether to keep paying the premiums now that she's in her 80's. In her case as well, having the LTC policy at the beginning could have been a life-saver, but just didn't make sense given her age and ability to self-insure.

Darrow Kirkpatrick has a really good two-part series on LTC insurance from a few years ago that I often recommend. He's way better at crunching the numbers and cutting through insurance industry scare (aka sales) tactics than I am.

https://www.caniretireyet.com/long-term-care-insurance-why-we-arent-buying-it/

 

[lem1955]

We do not have LTCi. Our plan is to move to a CCRC in 4-5 years when my spouse will be 80 - 81 and I will be 70 - 71. It may feel early for me but I'm hopeful we will be able to afford an independent cottage on the campus that will still feel like our own home and not an institution.

 

[RetireeRobert]

Wife and I got a hybrid LTC/whole life joint policy for single premium when I was 69 and she was 62 with 3% inflation rider. Covers either or both of us under one policy. Since it was one pay (or ten pay was another option) premium is set and done--never any increase possible. Also, since it is hybrid, if LTC never or not completely used, then heirs collect on the life insurance, so never any "wasted premiums for all those years" feeling (if one tends to look at LTC that way).

Final and best plus of policy is the leverage. For that single premium one gets an "immediate" multiple of the single premium amount as benefit coverage. This leverage is both on the LTC side, and also on the life insurance side. So if we individual mere mortals turned out to need LTC the week after we bought the policy, we have a multiple of our single premium to cover us. Or if we kicked the bucked the month after we bought the policy, again the heirs get a multiple of our single premium.

The coverage is in effect, paid for, either I or my heirs get a multiple of the single premium back at some point. I am not going to cancel and ask for refund! (Which is another option).

 

[TrvlBug]

Both DH and I have had LTCI . We purchased through our employers ~20-25 years ago. Currently have $360/day with lifetime limit of approx. $400K. DH at 74, pays $2,500 a year now and just received an offer (I haven't received mine yet) to increase daily coverage to $417 for an add'l yearly premium of $1,430. We plan on declining their 'generous' offer . The mailer also stated, oh by the way, the company is in the process of implementing rate increases.

Nursing home care in our neck of the woods is outrageously expensive at approx. $10K/month for a semi-private room.

 

[FANOFJESUS]

I have not and will not buy it.

My MIL just passed away at 85. She spent $1700.00/year since 1996 for the policy. It came with a 100 day elimination period (deductible) meaning she had to out-of-pocket for 100 days before the insurance company paid anything. Long story short, she went into assisted living in June and passed away September 1.

She was not able to use one nickel of the policy. Although I understand some viewing this as "catastrophe insurance" I believe the majority of people pass without being able to collect anything.

Yes, I understand that is how insurance works........but I thought I would relate a real life experience with real dollars.

Good point. I guess a fair amount of people do pass away in that first 100 days. I guess that is why they make you wait that long.

 

[kyzymurgist]

DW and I also went for the hybrid life / LTCI policy for all the same reasons mentioned by RetireeRobert.

Purchased our policy almost 3 years ago at age 62. Life insurance part paid by lump sum IRA rollover which disburses over 10 years. Also added a rider to include unlimited LTC coverage with 5% inflation. This is also distributed over 10 years and is paid from our HSA so tax free.

We were very concerned about all the huge price increases occurring with traditional policies. This is one way to avoid that risk. The life insurance for the kids on our passing is just gravy.

 

[dingo]

LTC options

Wife and I got a hybrid LTC/whole life joint policy for single premium when I was 69 and she was 62 with 3% inflation rider. Covers either or both of us under one policy. Since it was one pay (or ten pay was another option) premium is set and done--never any increase possible. Also, since it is hybrid, if LTC never or not completely used, then heirs collect on the life insurance, so never any "wasted premiums for all those years" feeling (if one tends to look at LTC that way).

Final and best plus of policy is the leverage. For that single premium one gets an "immediate" multiple of the single premium amount as benefit coverage. This leverage is both on the LTC side, and also on the life insurance side. So if we individual mere mortals turned out to need LTC the week after we bought the policy, we have a multiple of our single premium to cover us. Or if we kicked the bucked the month after we bought the policy, again the heirs get a multiple of our single premium.

The coverage is in effect, paid for, either I or my heirs get a multiple of the single premium back at some point. I am not going to cancel and ask for refund! (Which is another option).

I am considering a policy like this through One America . We would probably pay the full amt up front and receive a discount on the price. I can’t see too many downsides.

We are not concerned with a large payout from the death benefit to our heirs since we don’t have kids. We would be willing to take a lesser amt or forgo the payout altogether if we could get a lower upfront price. The policy has the chassis of a life insurance policy so I recognize that this is probably wishful thinking.

As far as I can tell the company is stable . I am having trouble pulling the trigger for some reason. We would move $150,000 from the IRA to fund it ( no tax implications)and be eligible for a $5729/mth benefit lifetime benefit each for me and my spouse. Any thoughts on this would be appreciated.