Long Term Care Insurance

[easysurfer]

I let my traditional LTC policy lapse last year. I couldn't get past the psychological hurdles of feeling like I'm paying a large premium for something I may not use plus twice had to choose to either pay higher premiums to keep the same coverage or pay same premium and get decreased coverage.

 

[zippy2020]

I suggest to my middle-class friends that they look into it - especially those who can take advantage of company- or government-offered LTCi.

If they decide not, that is their decision. It's always an individual choice.

I don't think of myself as a cautious or fearful person. In fact, I'm pretty careless about things (don't ever look at my "to be filed" stack, LOL). But I worked a good part of my career in life, health, and reinsurance. Yup, I can tell you stories.

I don't drive without auto insurance. I wouldn't go without homeowner's insurance. Yeah, we have quake and umbrella liability policies, too.

I figure why would I not insure myself and Spouse, especially against something that could seriously damage our lifestyle? We aren't rich enough to self-insure. Period. HSAs were not available to us during our working years.

My widowed MIL was house-rich and cash-poor. We suggested to her she sell her beloved home, and six years later (no nagging, honest), she decided to.

That money - a full $1M profit - ensured she could have her choice of where to live in her old age, and had she lived long enough to require SCN for her dementia, she still would never have run out of $$$$.

But that profit was for one person. Split in half, it wouldn't have been so effective as a backstop - especially if both wife/husband eventually needed care.

That's why thorough financial planning is so necessary. I can't tell you how many widows I've met who KNEW their spouse's SocSec check would eventually end, yet were shocked and surprised to find they didn't have enough money any longer for their current lifestyle.

I can throw up my hands and offer all the sympathy in the world, but that won't help them. I cannot eliminate risk in our life, but I can damned well mitigate it as much as possible.

 

[pb4uski]

Hi pb4uski!

Could you elaborate on how this plan would cover your needs should one of you end up needing nursing home care? ...

Run FIRECalc with your best estimates. Then go to the Investigate tab and select the option for the starting portfolio value for a 95% success rate (or your minimum success rate) near the bottom of the Investigate tab.... is the excess of what you have over what you need sufficient to pay for 3 years of nursing home costs? (about $300k).

If not, then try reducing expenses since the expenses would be for just one person rather than two people.... after that adjustment, is the excess of what you have over what you need sufficient to pay for 3 years of nursing home costs? (about $300k).

A situation like your grandmother's 10-15 years, $1-1.5m would be really problematic.... if we faced that situation we'd probably divorce in name only to preserve assets for the surviving spouse but it wouldn't be fun.

 

[pb4uski]

I let my traditional LTC policy lapse last year. I couldn't get past the psychological hurdles of feeling like I'm paying a large premium for something I may not use plus twice had to choose to either pay higher premiums to keep the same coverage or pay same premium and get decreased coverage.

That is the exact lack of value proposition that I was referring to.... and add to the the well documented cases where getting claims paid is resisted by the insurer.

 

[Trooper]

We purchased LTC in our late 40s (about 15 years ago). We haven't had any premium increases until 2 years ago, and again this year. This month I'm taking a hard look at how to keep costs down while still maintaining the insurance. I'm getting quotes on:

1) an increase in the elimination period
2) eliminating the rider for shared extended expense rider
3) eliminating the rider for 10-day elimination for home health care.

Hopefully these actions will reduce the premium to where we're comfortable. Sort of self-insuring the small stuff and covering the more catastrophic.

 

[Sunny]

It is sad that those who can afford long term care insurance likely don’t need it (unless they are on the bubble) but those that desperately need the insurance in no way can afford the premiums.

My wife worked in the industry and saw first hand how many timeS long term care insurance didn’t pay out for what was thought should have been payed out.

Also as others have done I’m sure, we added a cushion to the typical time in skilled care//nursing home, looked at today’s costs for that care, adjusted for increases (we used a 7% annual inflation of these costs) and looked at what that did to our portfolio at likely ages in the future. We luckily were fine, there is a big hit at the time of course but it was sustainable.

And that was forecasting our expenses, adjusted for inflation, remaining the same even if one of us was in LTC and the other not. Nearly all studies show you spend less in later years on things other than health care. I wouldn’t foresee one of us living high and mighty while the other is in LTC either.

This combined with the anecdotal experiences of the insurance didn’t cover for others led us to be comfortable with the decision to not get long term care insurance. Everything could go up in smoke and looking back we made the wrong choice if that happens, but you can have that fear about anything in life including all of our portfolios.

I know we have some friends that did something similar but they actually carved out the chunk of their portfolio just for this purpose and have it in different accounts.

 

[leftbucket]

Note to mods

No matter how nice a nursing home is it’s still a miserable existence. Our plan should that be necessary is to just quit taking my pills for BP and my heart. It will only take days for my BP to be out of control as even missing one day has bad results. Our kids are aware of our plan.

I hoard all of my opioids. Have hundreds from various injuries and surgeries. Keeping my options open.

Red badger, that’s also a great idea. I also have a bunch leftover from surgeries because I never take them for long.

Sorry, I am very late to this thread...

While I respect free speech, I have to urge the mods to remove these replies. These MIGHT be reasonable conversations to have with a doctor or trusted counselor, but you cannot possibly predict the mental state of the hundreds of folks who may read this thread in the future. I believe it is irresponsible to keep this posted to so vast an audience.

And for any of you reading this thread in a not-so-pleasant mental state, please do not give up hope. Reach out.

And Mods, feel free to delete my quotes and reply also.

Thank you for considering,
R/
LB

 

[Brat]

With the covid-19 long term care may not be needed for most.

 

[harley]

Sorry, I am very late to this thread...

While I respect free speech, I have to urge the mods to remove these replies. These MIGHT be reasonable conversations to have with a doctor or trusted counselor, but you cannot possibly predict the mental state of the hundreds of folks who may read this thread in the future. I believe it is irresponsible to keep this posted to so vast an audience.

And for any of you reading this thread in a not-so-pleasant mental state, please do not give up hope. Reach out.

And Mods, feel free to delete my quotes and reply also.

Thank you for considering,
R/
LB

I vote no. It's a valid option. People can make their own choices, and their own decisions. My mom had saved a bunch of pills, but got taken to the hospital where she died slowly and painfully without having access to them. She would have much rather have had the option. And I doubt anyone in the depths of depression would be reading a LTC thread on an early retirement site.

 

[PoorOldCountryBoy]

The numbers did not make sense for us. My biggest issue is that the tail risk (long LTC stay) is no longer covered. Most policies max out at 3 to 5 years. If the average stay is a little less than 3 years, you have 36 months * $10,000 = 360,000 needed benefit, but then deduct your income for 3 years. If we assume 60K*3 years, that would be half.


So the question is can you cover a terminal decline in health costing about $200,000 to $300,000 in assets without destroying your loved ones' futures?


As others have said, for the poor the answer is no, for the rich the answer is yes. It's a middle net worth question.


Our personal solution is to max out an HSA as our LTC policy. We are in generally good health and if we can save until 65 and not withdraw much until 75, we're pretty much all set. The upside is we have total flexibility in "claims". If you make an LTC claim you usually need two ADL's impaired to have a payout. What if you have just one? Too healthy to pay.

 

[simple girl]

Run FIRECalc with your best estimates. Then go to the Investigate tab and select the option for the starting portfolio value for a 95% success rate (or your minimum success rate) near the bottom of the Investigate tab.... is the excess of what you have over what you need sufficient to pay for 3 years of nursing home costs? (about $300k).

If not, then try reducing expenses since the expenses would be for just one person rather than two people.... after that adjustment, is the excess of what you have over what you need sufficient to pay for 3 years of nursing home costs? (about $300k).

A situation like your grandmother's 10-15 years, $1-1.5m would be really problematic.... if we faced that situation we'd probably divorce in name only to preserve assets for the surviving spouse but it wouldn't be fun.

Thank you! I just ran the numbers and it looks like we currently have a significant projected excess. (edited after I realized an input error I had made to FIREcalc.) This gives me much more confidence in our ability to self-insure. Your input is much appreciated, as always!

 

[The Cosmic Avenger]

I vote no. It's a valid option. People can make their own choices, and their own decisions. My mom had saved a bunch of pills, but got taken to the hospital where she died slowly and painfully without having access to them. She would have much rather have had the option. And I doubt anyone in the depths of depression would be reading a LTC thread on an early retirement site.

Seconded. Like with addiction, you can try to minimize triggers or temptations in your own life, but you will never be able to avoid them completely. And in this case, dying with dignity is a lot more important a topic of discussion than drinking. (And in case you didn't notice my avatar, coming from me, that's saying something!)

 

[leftbucket]

careful

I vote no. It's a valid option. People can make their own choices, and their own decisions. My mom had saved a bunch of pills, but got taken to the hospital where she died slowly and painfully without having access to them. She would have much rather have had the option. And I doubt anyone in the depths of depression would be reading a LTC thread on an early retirement site.

On a personal note, I am very sorry for your loss.

Unfortunately, as a note of group discussion, given the rates of depression among both the elderly and the general population, your last sentence is extremely reckless...

 

[pb4uski]

Very difficult issue. I sometimes think that we treat our pets better than people, allowing then to die when they are in pain and suffering. While I think there is a point where I would say "uncle" and want out, I'm not sure where that point is or whether I might feel differently when the time comes.

Vermont has a death with dignity law but it is very narrow... as it should be.... you have to have multiple docs conclude that you are terminally ill with less than 6 months to live, a psychological evaluation that you are of sound mind... then you get a prescription for the drugs... and you must adminster them yourself. And the sound mind requirement excludes a lot of really common sad situations.

I'm not suggesting that I know a better answer, but just that I recognize the problem.

 

[Chuckanut]

The numbers did not make sense for us. My biggest issue is that the tail risk (long LTC stay) is no longer covered. Most policies max out at 3 to 5 years.

+1 Agreed


What I would like to see is an LTC policy that kicks in after 2-3 years of care have been paid for (all at once or several shorter events, it should not matter).

I figure that cost would be much cheaper since the need for LTC over 3 years is very, very small. REWahoo has a graph that shows the number of people in LTC and at three years the numbers are very low. One way or another most of us leave LTC before three years are up.

Until then, they can keep their policies and I will keep my money.

 

[Scrapr]

Very difficult issue. I sometimes think that we treat our pets better than people, allowing then to die when they are in pain and suffering. While I think there is a point where I would say "uncle" and want out, I'm not sure where that point is or whether I might feel differently when the time comes.

Vermont has a death with dignity law but it is very narrow... as it should be.... you have to have multiple docs conclude that you are terminally ill with less than 6 months to live, a psychological evaluation that you are of sound mind... then you get a prescription for the drugs... and you must adminster them yourself. And the sound mind requirement excludes a lot of really common sad situations.

I'm not suggesting that I know a better answer, but just that I recognize the problem.

Oregon has the Death with Dignity law as well. It was a godsend for Mrs Scrapr. Tumors were impacting her breathing. You want to see a scared look on your wifes face as she could not breathe that was the time. On hospice she was bumping up the morphine every couple days. It was heartbreaking to prepare the solution. And we had a few good moments & laughs at the end. She was a one of a kind

Where the DwD breaks down is the Dementia-Alzheimers. I don't have a good solution there. Maybe a government death panel? /sarcasm

 

[pb4uski]

^^^^ Perhaps overlay DwD with a provision that if someone diagnosed with Alz but still in sound mind (as verified by two phsycological evaluations) signs a statement that if at some future point they can't recognize their children, spouse, parents and siblings (verified by two or more independent medical professionals) that they would not want to live that it clears the same hurdle as being terminally ill with less than 6 months to live.

My thought is to use the same protections that we use in assessing guardianship petitions for ALz patients... the testimony of relevant medical professions, phsycologists and family are considered and the proposed ward is reresented by legal counsel and the judge is there as well before a decision is made.... there has to be some answer that adequately protects the patient that society can accept.

 

[geeky_grrl]

+1 Agreed


What I would like to see is an LTC policy that kicks in after 2-3 years of care have been paid for (all at once or several shorter events, it should not matter).

I figure that cost would be much cheaper since the need for LTC over 3 years is very, very small. REWahoo has a graph that shows the number of people in LTC and at three years the numbers are very low. One way or another most of us leave LTC before three years are up.

Until then, they can keep their policies and I will keep my money.

That is exactly the kind of policy I would want. But I think the market for it is probably small since most people don't have the savings to make it through a three year waiting period.

 

[MuirWannabe]

+1 Agreed


What I would like to see is an LTC policy that kicks in after 2-3 years of care have been paid for (all at once or several shorter events, it should not matter).

I figure that cost would be much cheaper since the need for LTC over 3 years is very, very small. REWahoo has a graph that shows the number of people in LTC and at three years the numbers are very low. One way or another most of us leave LTC before three years are up.

Until then, they can keep their policies and I will keep my money.

REWahoo or Chuckanut. Could one of you re-post the graph showing the numbers of people in LTC over duration? I sure would appreciate it.

 

[Chuckanut]

https://www.ltccs.com/blog/long-term-care-statistics-2018/#.Xkx6hS-IahA

Here is one. Note the third bullet point

 

[ncbill]

Oregon has the Death with Dignity law as well. It was a godsend for Mrs Scrapr. Tumors were impacting her breathing. You want to see a scared look on your wifes face as she could not breathe that was the time. On hospice she was bumping up the morphine every couple days. It was heartbreaking to prepare the solution. And we had a few good moments & laughs at the end. She was a one of a kind

Where the DwD breaks down is the Dementia-Alzheimers. I don't have a good solution there. Maybe a government death panel? /sarcasm

Extremely restrictive written health care POA...it's what I've done after watching mom live the better part of a decade completely bedridden due to advanced dementia.

I.e. if I have a terminal illness, specifically including dementia, I desire only palliative care...e.g. no code, no feeding tube, etc., not even oral antibiotics.

 

[REWahoo]

REWahoo or Chuckanut. Could one of you re-post the graph showing the numbers of people in LTC over duration?

Is this what you were looking for?

 

[Newventurer]

Is this what you were looking for?

I recall a study that said of those in LTC, the majority were female, and it was explained as the male frequently stays in the home and the significant other (female) cares for them, perhaps to the end. I have bought a policy for my wife and not for me, we are playing the odds.

 

[MuirWannabe]

Is this what you were looking for?

Yes, thanks to you and Chuckanut very much.

 

[Trooper]

+1 Agreed


What I would like to see is an LTC policy that kicks in after 2-3 years of care have been paid for (all at once or several shorter events, it should not matter).

I figure that cost would be much cheaper since the need for LTC over 3 years is very, very small. REWahoo has a graph that shows the number of people in LTC and at three years the numbers are very low. One way or another most of us leave LTC before three years are up.

Until then, they can keep their policies and I will keep my money.

I agree that it would be nice to have this so-called "tail" policy, but let me play devil's advocate. If one had a traditional LTC policy, the first 3 years or so of a long-term nursing home scenario would be covered, leaving the insured with more $ to pay for later years. Since the tail is unlikely, then the policyholder likely wouldn't have to have to shell out anything (other than premiums,of course).

This is a great thread BTW, although it's driving me crazy on what to do with my policy!