Long-term care insurance paper

[teej1985]

Quote:

Originally Posted by Chuckanut 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.

Why would having insurance incentivize one to make poor health decisions?

[MarieIG]

I recall when DF shopped for LTC insurance DM did not qualify so he did not purchase it.

When he had to be in a nursing home following one of his hospitalizations - due to the need for IV mediations - he hated it and begged us to take him home. We did as soon as he did not need the daily physician monitoring of the meds. He was much happier at home.

I have been uninsurable for quite a while. In any event, I wouldn't buy a policy when I have no idea what the premiums would be.

[FinBiz]

This was well written and informative. I am interested in reading your other articles and future “stuff!”. Thank you for sharing.

[Alan]

Quote:

Originally Posted by FinBiz This was well written and informative. I am interested in reading your other articles and future “stuff!”. Thank you for sharing.

There is an excellent paper and thread of his that is now in the FAQ forum if you missed it.

https://www.early-retirement.org/for...es-106292.html

Note that there is also a link now in the FAQ to his thread on LTC (post #2)

https://www.early-retirement.org/for...0-a-30860.html

[mickeyd]

Thanks for the informative article Rick. I decided years ago to self insure this risk and have been satisfied with my decision. I wish I would have read your paper earlier, it would have made my decision easier, though it would not have changed it.

[sunnyca]

Thank you, I would definitely follow you and I hope you continue to write on retirement topics like this one. My employer used to provide a LTC policy as a benefit & when I decided to retire, I found it was portable & converted the policy into my name and have been paying the same premium for the last 7 years. I just this month received a premium increase notice, the company received approval from my state Dept. of Insurance to increase the premium by 82%. Needless to say, I am now conflicted whether I should continue with the policy and I just wanted to point out that rate increases of this magnitude are possible for those considering LTC policies.

[NoEZmoney]

While I can appreciate the value of insurance to limit risk exposure, I have to add a couple stories from my relatives' recent experience.

I had an aunt and uncle who had done very well with their pensions, savings, investments, real estate. She was a retired state healthcare official in San Fran and he was a retired CalTrans engineer who also retired full commander in USNR. They lived super frugally and were very, very well off.

Both also had LTC policies that they paid premiums for years and while they started policies somewhat early, (late 40's early 50's) over the years their premiums added up significantly.

The day they needed LTC, it wasn't a super straight forward process. Both had dementia (one more severe than the other) and it was hard to keep up with everything but eventually we got it straightened out ( one company was quite slow in getting things going and our legal assistant had to play bad cop to get things expedited ).

The sad story is that both were in LTC facility for less than 2 years and they didn't get their money's worth, not by a long-shot. They had enough resources to pay out-of-pocket. But another point is they could've taken all those year's of premiums and applied them to an S&P Index, or any decent interest-bearing account with low expenses and moderate returns.

I did some basic research and discovered that for most people, the average LTC is usually less than two (2) years. Why? Because when you get to that stage where that level of care is needed (again for MOST PEOPLE), you are likely in the downward spiral. Of course, each person is different and your mileage may vary.

Another thing we discovered was the appointed executor of our aunt's estate reviewed the LTC and told us it wasn't a very good one and really didn't have much protection for inflation but since she had one she should use as needed. As with any policy, caveat emptor. Our Aunt and Uncle were accomplished people and were pretty sharp when they were young but once they got closer to retirement, they didn't research their options too well. At least that would explain the cost of and type of LTC policies they got.

As for me and DW, we're planning on geographic arbitrage which will likely involved "age in place" with healthcare visits and caregivers in another less costly country.

[Dash man]

Quote:

Originally Posted by NoEZmoney While I can appreciate the value of insurance to limit risk exposure, I have to add a couple stories from my relatives' recent experience. I had an aunt and uncle who had done very well with their pensions, savings, investments, real estate. She was a retired state healthcare official in San Fran and he was a retired CalTrans engineer who also retired full commander in USNR. They lived super frugally and were very, very well off. Both also had LTC policies that they paid premiums for years and while they started policies somewhat early, (late 40's early 50's) over the years their premiums added up significantly. The day they needed LTC, it wasn't a super straight forward process. Both had dementia (one more severe than the other) and it was hard to keep up with everything but eventually we got it straightened out ( one company was quite slow in getting things going and our legal assistant had to play bad cop to get things expedited ). The sad story is that both were in LTC facility for less than 2 years and they didn't get their money's worth, not by a long-shot. They had enough resources to pay out-of-pocket. But another point is they could've taken all those year's of premiums and applied them to an S&P Index, or any decent interest-bearing account with low expenses and moderate returns. I did some basic research and discovered that for most people, the average LTC is usually less than two (2) years. Why? Because when you get to that stage where that level of care is needed (again for MOST PEOPLE), you are likely in the downward spiral. Of course, each person is different and your mileage may vary. Another thing we discovered was the appointed executor of our aunt's estate reviewed the LTC and told us it wasn't a very good one and really didn't have much protection for inflation but since she had one she should use as needed. As with any policy, caveat emptor. Our Aunt and Uncle were accomplished people and were pretty sharp when they were young but once they got closer to retirement, they didn't research their options too well. At least that would explain the cost of and type of LTC policies they got. As for me and DW, we're planning on geographic arbitrage which will likely involved "age in place" with healthcare visits and caregivers in another less costly country.

Well, I’ve been paying homeowners insurance, car insurance, flood insurance, umbrella insurance and health insurance for decades and haven’t gotten my money’s worth out of it yet either! LTC insurance is protection for the unknown, just like all those other types of insurance that most of us have.
My LTC insurance also covers assisted living and in home care. We have one parent in her third year of Medicaid nursing home care after two self paid in assisted living. We have another parent in her fourth year of memory care/assisted living still paying for it herself. Another 12-18 months we’ll be paying for it.
We got our coverage around 2002, two years before my wife’s ovarian cancer struck at age 48. We would never have qualified after that.

[PandaBear]

Thank you for your informative article. As some others have noted, we have chosen to purchase LTC insurance. We pay approximately 2K per year for the both of us. However, to keep our premiums stable, we declined the COLA aspect. So a maximum of 6K per month. We figured this gives us a compromise......a little extra help if needed, but reasonable premiums. We can use it for facility or home care and have an unlimited time frame.

Both mine and dh’s parents carried LTC insurance. Both dads never accessed it, for various reasons before dying and my mom is still healthy and doing well. My MIL accessed benefits about 8 years.

We actually purchased our policies at a relatively young age, because of my work background. I worried about an early, life altering event and destroying my family’s finances. I know it wasn’t likely but for me, the cost was (and is) worth the peace of mind. However, I understand many other people may feel differently.

[RobLJ]

I've known too many where their premiums were jacked up to the point of unaffordability in their mid/late 70's and 8\0's, so I've decided to self-insure.

I understand those of you who have bought, since my grandparents all lived well into their 80s or 90s and my father had a very difficult last 6 months in Rehab.

[Trooper]

Quote:

Originally Posted by sunnyca Thank you, I would definitely follow you and I hope you continue to write on retirement topics like this one. My employer used to provide a LTC policy as a benefit & when I decided to retire, I found it was portable & converted the policy into my name and have been paying the same premium for the last 7 years. I just this month received a premium increase notice, the company received approval from my state Dept. of Insurance to increase the premium by 82%. Needless to say, I am now conflicted whether I should continue with the policy and I just wanted to point out that rate increases of this magnitude are possible for those considering LTC policies.

Ditto on the article, Rick. Reading it has been on my to-do list for a while and unfortunately it moved up on the list because my state's Department of Insurance was nice enough to approve a 40.4% increase in our policy. We punted on a decision to cancel after last year's 15% increase; now it looks like we'll be making these decisions annually. Ugh.

[Huston55]

OP-

Just read your paper. Well done!

You mention CCRCs only briefly. I view CCRCs as an alternative method for managing LTC risks. You will see informative links on CCRCs in the FAQ. I’d like to read your thoughts on CCRCs in a post or subsequent paper if you’re so inclined.

[harllee]

Quote:

Originally Posted by Huston55 OP- Just read your paper. Well done! You mention CCRCs only briefly. I view CCRCs as an alternative method for managing LTC risks. You will see informative links on CCRCs in the FAQ. I’d like to read your thoughts on CCRCs in a post or subsequent paper if you’re so inclined.

Me too!