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Old 10-26-2020, 04:33 AM   #21
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Well, OP, that was very well done. It summarizes many points spread out thru various threads on here. Plus it added a lot of other information and data. I learned a lot about this subject by reading it. And itís a topic that weighs on me, as Iím currently self insured by design.

Three thoughts:
- Iím certainly glad you ruled out the suicide option.
- Your statement about in-home care being much cheaper than ALCís surprised me. I would have assumed in home care would be very costly. Having people dedicated to your service needs 24/7. Are you sure this is correct?
- I understand you rule out the hybrid option, mostly for reasons I fully agree with. Donít like mixing my insurance with investment vehicles. But you say the cost of hybrids are much greater. Can you elaborate?

Thanks for sharing this.

Muir
Thanks for your nice comments.

In response to your three points:

1) I ruled out assisted suicide because it's impractical, not for any other reason. Both my mother and my mother-in-law died of old age this year. It was extremely painful to see them suffer over the last months of their lives. I wish people had the option to end this suffering. If other people are opposed to the option for religious or other reasons, then they don't have to exercise it. In the end my mother was begging to die. It ripped my heart out.

2) As it relates to home care vs assisted living expenses, my comments were based on personal experience. My mother died in assisted living and my MIL died at home. Home care costs were a lot less. Your assumption that they needed 24/7 care was not correct. They only needed help for a few hours a day.

3) Hybrids cost more because they pay out a death benefit. LTCi may or may not pay out anything. The guaranteed payout increases hybrid premiums significantly. I read that hybrid premiums are 3 or 4 times more expensive in several places. One of those places was the Allan Roth article I referenced on page 2 of my paper. Please see Allan's article for his discussion on hybrids. You may find that useful.
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Old 10-26-2020, 05:49 AM   #22
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Thanks for the article. DW and I purchased LTC through the Federal contract when it first came out on the theory that we were protecting our nest egg for the kids. I have vacillated back and forth about whether it was worthwhile. But, as Jeff Bridges tweeted out when he got cancer, "As the Dude would say, new s**t has come to light." I just got diagnosed with Parkinson's Disease. Still no telling what is in my future but my subjective NPV on the LTC policy went way up.
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Old 10-26-2020, 07:13 AM   #23
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Thanks for your nice comments.



In response to your three points:



1) I ruled out assisted suicide because it's impractical, not for any other reason. Both my mother and my mother-in-law died of old age this year. It was extremely painful to see them suffer over the last months of their lives. I wish people had the option to end this suffering. If other people are opposed to the option for religious or other reasons, then they don't have to exercise it. In the end my mother was begging to die. It ripped my heart out.



2) As it relates to home care vs assisted living expenses, my comments were based on personal experience. My mother died in assisted living and my MIL died at home. Home care costs were a lot less. Your assumption that they needed 24/7 care was not correct. They only needed help for a few hours a day.



3) Hybrids cost more because they pay out a death benefit. LTCi may or may not pay out anything. The guaranteed payout increases hybrid premiums significantly. I read that hybrid premiums are 3 or 4 times more expensive in several places. One of those places was the Allan Roth article I referenced on page 2 of my paper. Please see Allan's article for his discussion on hybrids. You may find that useful.

My in-laws are using in home care on a 24/7 basis. I havenít done a detailed comparison, but my impression was it was at least as expensive as an ALC. Apples to apples comparison would be around the clock care i would think.

Thanks, Iíll look at the Roth paper.

Also, wanted to add my desire for a Ďstop lossí policy as you describe it. Disappointed they donít exist. It seems a very logical option. Just must not be considered profitable by insurance companies.

Again, I appreciate you sharing this excellent summary.
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Old 10-26-2020, 08:14 AM   #24
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After reading the Roth article you referenced, I found something I think might be a helpful consideration for me. Itís not a stop loss policy, but it gets at similar type thinking I suppose. Here is the quote from his article.

ďOf course, itís not a buy or donít buy decision. Iíve reviewed two very rich policies, but one could partially self insure by buying a scaled down version with lower benefits. Though Iíd consider longer elimination periods or lower daily benefits, I wouldnít skimp on the number of years the benefit pays out. One should buy insurance on a catastrophic event - a long term stay in a nursing home.Ē
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Old 10-26-2020, 08:47 AM   #25
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I know how expensive 24 hour sitters can be! It certainly adds up. In our case near the end a nursing home would have been less expensive, but who wants to move a failing elderly person during a pandemic? Or remove them from familiar surroundings? Combination of personal care home, Hospice and sitters just trying to make them as comfortable as possible under the circumstances.
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Old 10-26-2020, 09:54 AM   #26
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If the premiums were fixed then I might be able to get a bit more enthused.

P.S. I once worked for a guy who went on to be one of Genworth's many CFOs.
+1 on the premiums.

The idea that I could pay for a decade or two, and then have to decide if I want to drop the insurance due to affordability issues does not excite me.

Nords' tales of woe with his father (??) did not help either.
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Old 10-26-2020, 11:39 AM   #27
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Very good article. DH and I have decided to move into a CCRC and self insure. My mother has a LTC policy and it has not worked out well for her financially. She is now 89, in a CCRC and is in good health physically and mentally so she fortunately has not been able to use the LTC benefits. .....
We also chose the CCRC approach. We moved into a Type A CCRC 18 months ago and found it to be a comfortable fit. While being here during Covid has proven a bit more restrictive than living independently we have assured access to Skill Nursing and Asst Living if need for recovery.
Our "buy-in" came from selling our home and so basically converted "dead" capital for active benefits. Our thinking was with a Type A we are guaranteed all the benefits of a LTC without all the challenges of claim forms and negotiating with an insurance company so often reported as LTC policies.
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Old 10-26-2020, 12:30 PM   #28
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We also chose the CCRC approach. We moved into a Type A CCRC 18 months ago and found it to be a comfortable fit. While being here during Covid has proven a bit more restrictive than living independently we have assured access to Skill Nursing and Asst Living if need for recovery.
Our "buy-in" came from selling our home and so basically converted "dead" capital for active benefits. Our thinking was with a Type A we are guaranteed all the benefits of a LTC without all the challenges of claim forms and negotiating with an insurance company so often reported as LTC policies.
We have our name on the waiting list for a very nice type "A" CCRC in our area.
It is expensive but fits all our needs and means we have no need for LTC insurance. The waiting list for some of the units is about 10 years but we have been on the list for several years and are near the top.
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Old 10-26-2020, 01:05 PM   #29
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Just now read it....... Very well done.
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Old 10-27-2020, 12:19 PM   #30
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I anticipate at least skimming everything you share here going forward based on the quality of this paper.

Like several others here, I have already done a significant amount of work on this subject and my personal situation. So, I did not find any new information here for my personal situation. But, I do feel comfortable in saying this is a good analysis, making me interested in reading more of your work.
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Old 10-27-2020, 01:11 PM   #31
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I anticipate at least skimming everything you share here going forward based on the quality of this paper.

Like several others here, I have already done a significant amount of work on this subject and my personal situation. So, I did not find any new information here for my personal situation. But, I do feel comfortable in saying this is a good analysis, making me interested in reading more of your work.


+1
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Old 10-28-2020, 07:39 AM   #32
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Thanks for the positive comments on my paper. You have encouraged me to continue.

Please see my last post entitled Short Money Rules.
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Old 11-02-2020, 05:40 AM   #33
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My mother has a LTC policy which has a premium of 8k yearly, which pays 350 per day and has a max of 3 years. Premiums are fixed until 2028, when she will be 95 years old.
She is not using the policy currently and I had to switch it to a 3 year max, otherwise premiums would have shot up to ~12/13k yearly in a few years, since it was originally lifetime coverage.
No LTC policy for DGF and me. Yeah taking some chances.
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Old 11-02-2020, 05:50 AM   #34
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Well written paper, especially for anybody who hasn't already made a decision.

We bought LTCi for wife and I about 9 years ago - wife falls into the category of family history for Alzheimer's, and after seeing her mom, her mom's twin sister, and her mom's brother go through that, there was no way we were going with out it, especially after seeing what her dad had to go through financially after cancelling their policy about 2 years before she was diagnosed. Her mom and her sister both ended up needing care for about 7+ years. We've had 1 rate increase and I adjusted my policy downward to get the total premiums back to about where they were before in order to keep her benefits the same and since there is very little family history on my side.
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Old 11-06-2020, 06:30 PM   #35
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Blog?

With your background, you may find it worthwhile to offer your thoughts via a blog.

This page can provide some ideas - https://www.theminimalists.com/blog/
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Excellent article
Old 11-06-2020, 06:48 PM   #36
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Excellent article

I would welcome the opportunity to read more of your summaries...very logical presentation. I am 61, DH is 63 and I had an opportunity when I was 45 and husband 47 to buy LTC insurance with John Hancock thru my employer...at the time, everyone thought I was "nuts", but I thought it made sense. At the time there were different "tiers" of coverage I could choose, so I decided to go with the least amount knowing there would be inflation protection offered every 3 years. I was very fortunate...our combined premium is only $99 per month, for a daily benefit of $275 and lifetime coverage of $324K each...with a return of premium option if I cancel before age 70. Needless to say, I don't plan on ever cancelling this, and I am OK if we never need it...one caveat I learned is that in the State of FL, one additional benefit of having LTC insurance is that you can keep the same amount of assets as the face value of your policy and still qualify for Medicaid.
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Old 11-06-2020, 08:53 PM   #37
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Wow, that's cool Rick! We bought LTC about 4 years ago and I had studied quite a bit before buying...so I was reading to see if the info matched my experience, which it did.

We originally looked at buying one of the state partnership policies, but found out they must include inflation adjustments or they do not qualify in our state. Adding the inflation protection proved EXTREMELY expensive, so we opted for a different approach. Instead, we "overbought" coverage....about 15 times what we otherwise would have bought. The cost doing this was about 60% lower than with an inflation adjusted policy. We do get the option of buying more coverage in the future.
This is similar to what i did, I bought the maximum benefit in LTCFEDS (like $500/day) for 5 years of benefits which costs about $70/month. I bought when I was 33. they will offer me increases over time for higher premium, but there is no COLA in the benefit. I could have purchased unlimited years of benefits for about double that premium, perhaps i should have. Won't know until it's too late.
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Old 11-06-2020, 11:47 PM   #38
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Excellent article! The wife and I bought a policy over 20 years ago and the premiums have only gone up once. I will have to dig it out and see what it says. We went with that company because they were excellent when my DF needed it several years ago.
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Old 11-07-2020, 06:07 AM   #39
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With your background, you may find it worthwhile to offer your thoughts via a blog.

This page can provide some ideas - https://www.theminimalists.com/blog/
Thanks for the blog suggestion. Someone else suggested that too.

I would like to set up a blog, but I can't figure out how. I tried using some of the popular blog sites and couldn't figure out how to use the tools or how to cut and paste pdf files into it. Finance is my thing, not IT.

Maybe a knowledgeable member can start a separate thread that discusses the easiest way to set up a blog for clueless people like me. Particularly, how to cut and paste pdfs. Maybe such a thread already exists?
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Old 11-07-2020, 10:21 AM   #40
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One good thing about not having LTC insurance is that it is an incentive to minimize the chances that life altering things happen to you. Both of my parents ignored some rather basic health preserving habits. While they lived to 89 and 92, I think they would have had many more 'good' years in their last decade had they done things like getting some regular exercise, seen the doctor more often, and left old grudges buried in the past.
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