Anybody Here Own LTC (Long Term Care)

[Brat]

There is another option: moving to a continuing care community that includes assisted living, nursing care in the monthly charge for everyone. I have priced certified non-profit communities who have been operating for many years with this program - they aren't cheap and they screen the new residents carefully.

[Rich_by_the_Bay]

Another strategy discussed in a prior threat on LTC:

Consider taking out term life on both parties once in your mid-fifties or so assuming you are reasonably insurable. Anywhere from 250k on up should do.

Skip LTCI.

First one in a NH gets expenses paid from the nest egg, perhaps depleting it seriously over time. IIRC, the mean life expectancy of long-term NH residents is measured in the 2-5 year range. Survivor gets the death benefit, repletes the nest egg.

Or, the independent spouse dies and the NH spouse gets the benefits to pay expenses.

Or, both end up in NH, use nest egg early on and when first dies, other gets benefit to pay expenses.

Not perfect, but cheaper than LTC, known risks, costs and benefits, and you'd feel alot better about decimating your nest egg to pay NH costs if you knew you'd pick up a large death benefit when the dependent spouse dies.

[brewer12345]

If anyone tries Rich's suggestion, an ordinary term policy won't cut it. You want one of the following from a reputable company:

- "Guaranteed No-Lapse" Universal Life
- Whole Life
- Maybe, annually renewable term

[Rich_by_the_Bay]

Brewer: "If anyone tries Rich's suggestion, an ordinary term policy won't cut it."

Why is that? Do they stop insuring after a certain age using term?

[youbet]

Quote:

Originally Posted by DOG52 When I retire my rate will still be at the group rate.

Sweet benefit........! *

[brewer12345]

Quote:

Originally Posted by Rich_in_Tampa Brewer: "If anyone tries Rich's suggestion, an ordinary term policy won't cut it." Why is that? Do they stop insuring after a certain age using term?

If you get a level term policy (20 year term, etc.), one of two things can happen at the end of 20 years: 1) policy ends and goes away, or 2) policy converts to an annually renewable term policy at whatever the going rate is, probably a LOT higher than the fixed period premium. What you really want to do is lock in the cost of the policy at the outset. No-lapse UL is probably the cheapest way to do so, but this product is under significant regulatory pressure. If it goes away, whole life will be pretty much teh only way to go. Annually Renewable Term would be OK, so long as you are aware that premiums WILL increase every year.

[Rich_by_the_Bay]

Quote:

Originally Posted by brewer12345 If you get a level term policy (20 year term, etc.), one of two things can happen at the end of 20 years: 1) policy ends and goes away, or 2) policy converts to an annually renewable term policy at whatever the going rate is, probably a LOT higher than the fixed period premium. What you really want to do is lock in the cost of the policy at the outset. No-lapse UL is probably the cheapest way to do so, but this product is under significant regulatory pressure. If it goes away, whole life will be pretty much teh only way to go. Annually Renewable Term would be OK, so long as you are aware that premiums WILL increase every year.

Level premium term OK?

[brewer12345]

Quote:

Originally Posted by Rich_in_Tampa Level premium term OK?

Nope, probably not. What if you outlive the level premium period? Then either the policy expires or the premium jacks way up. The latter might not be such a big deal except that the family may be financially constrained when it happens.

[samclem]

Seems like a "first to die" policy is what you'd want (to re-fill the nest egg when the first spouse goes). Insurance on spouse 2 is moot at that point. Is this available? If so, I'd guess the premiums are more than on a single life but less than on two.

As Rich says, this isn't a perfect soluton. There's a good chance of destitution for the "healthy" spouse if the nest egg runs out while the NH bils keep coming, and there's te probem of guessing how big a policy to buy, since the costs of care keep rising and there's no telling when you'd need it.

As we discuss this, I'm starting to think a "least bad" approach for our family might be to buy LTCI for my wife and I covering an unlimited benefit period but with a modest daily benefit--just enough to cover te difference between what we coud afford to pay and the likely actual bill for a NH. Assume monthly income from our pensions, SS, and investments,assume the house s paid off, and figure out just how much the spouse on "the outside" would need to spend each month (with considerable belt-tightening--this is a worst-case scenario). The difference is available to spend on NH fees. Then, buy just enough LTCI to cover the difference between available monthly funds and the cost of care. That would be approx $75 per day of insurance benefit needed for each of us (slightly more for DW, since our pension gets cut a lot when I die, reducing the amount she'd have to contribute to her NH care). Why unlimited benefit period? It's not much more expensive than 5 year coverage, and it would entirely eliminate the fear of outliving the insurance.

With this aproach I'm self-insuring to the max extent we can, but building a plan to cover the cost of LTC if it does happen.

Still on the fence . . . we're talking big $$ here!

[Brat]

Most folks die within 5 years after needing care which is why the spread between 5 year and lifetime is low.

Pay close attention to the qualifying ADLs, and absolutely sign up for the compound benefit increase.

Play around with the OPM 'chooser' to see the impact of one option over another whether or not you use that program.

[saluki9]

Quote:

Originally Posted by brewer12345 If you get a level term policy (20 year term, etc.), one of two things can happen at the end of 20 years: 1) policy ends and goes away, or 2) policy converts to an annually renewable term policy at whatever the going rate is, probably a LOT higher than the fixed period premium. What you really want to do is lock in the cost of the policy at the outset. No-lapse UL is probably the cheapest way to do so, but this product is under significant regulatory pressure. If it goes away, whole life will be pretty much teh only way to go. Annually Renewable Term would be OK, so long as you are aware that premiums WILL increase every year.

Brewer, I'm not in the insurance business, but I do see and read a lot of policies.

No lapse UL makes LTCI seem cheap. I still think it's a great deal considering what you're getting, but you can't complain about the price of LTC and then suggest no lapse UL.

[brewer12345]

Quote:

Originally Posted by saluki9 Brewer, I'm not in the insurance business, but I do see and read a lot of policies.* No lapse UL makes LTCI seem cheap.* I still think it's a great deal considering what you're getting, but you can't complain about the price of LTC and then suggest no lapse UL.

I don't think Rich's idea is a great one, personally. I was just trying to get the idea across that plain old term insurance wouldn't cut it.

Actually, in one sense, no lapse UL runs rings around LTCI: at least you know for sure what you are getting and the premiums can't be jacked to the moon in the future. Can't say either about LTCI, which is why I don't find the current incarnation appealing.

[wabmester]

Quote:

Originally Posted by saluki9 As trustee on a family trust I have signed well over $1,000,000 of checks to pay long term care expenses for my grandmother that could have been avoided by a $5K annual premium.*

Saluki, can I ask how the expenses got that high?* *Was it for an especially high quality of care, an extraordinarily long term of care, or something else?

Can anybody comment on the worst-case term length for long-term care?* *I assume that for people with, say, stroke-induced dementia that lifespans are relatively short and quality of life is fairly low.* *Is there a group who needs long-term care but who also maintain a high level of brain function and quality of life?

I just watched Soylent Green recently (thanks to the SciFi thread here).* * I liked the part where people volunteered to die, were asked their favorite music, color, etc, and then were led to a nice room where they sipped a glass of poisoned wine, snuggled into a cozy bed, and then watched a nice IMAX movie till they croaked.* *Seems a lot more dignified (and less expensive) than various alternatives.

[saluki9]

Quote:

Originally Posted by wab Saluki, can I ask how the expenses got that high? Was it for an especially high quality of care, an extraordinarily long term of care, or something else? Can anybody comment on the worst-case term length for long-term care? I assume that for people with, say, stroke-induced dementia that lifespans are relatively short and quality of life is fairly low. Is there a group who needs long-term care but who also maintain a high level of brain function and quality of life? I just watched Soylent Green recently (thanks to the SciFi thread here). I liked the part where people volunteered to die, were asked their favorite music, color, etc, and then were led to a nice room where they sipped a glass of poisoned wine, snuggled into a cozy bed, and then watched a nice IMAX movie till they croaked. Seems a lot more dignified (and less expensive) than various alternatives.

Sure, not a problem

My grandfather was a very successful man (owned an insurance agency) He made a very nice living for himself and was very independant (the reason he turned down the LTC)

In 1994 at age 78 he had a stroke that left him with permanent brain damage. At the same my grandmother (80 at the time) started losing her ability to care for herself and certainly for my grandfather. Due to life long knee problems she became unable to walk.

There was really only one option for them when it came to care. They weren't sick enough to subject them to a nursing home. Assisted living also was not an option because my grandfather was too sick and we would not even consider separating two people who had been together day and night for almost 60 years.

So, the only option available to us was to hire in home care. This was a huge help to both of them (my grandfather passed away a couple years later) My grandmother is now well into her 90's, requires a nurse to do anything from feeding, dressing, toileting, etc .. A full time caretaker (not an RN) costs us about $6K a month in salary, plus payroll taxes, health insurance for the caretaker, transportation, medication etc

In total this costs our family around $90K - 100K per year. We have been paying this for 12 years now. My grandmother (despite having a very low quality of life shows no signs of giving up) so as for the $1M figure, do the math

[Rich_by_the_Bay]

Quote:

Originally Posted by saluki9 So, the only option available to us was to hire in home care. This was a huge help to both of them (my grandfather passed away a couple years later) My grandmother is now well into her 90's, requires a nurse to do anything from feeding, dressing, toileting, etc .. A full time caretaker (not an RN) costs us about $6K a month in salary, plus payroll taxes, health insurance for the caretaker, transportation, medication etc In total this costs our family around $90K - 100K per year. We have been paying this for 12 years now. My grandmother (despite having a very low quality of life shows no signs of giving up) so as for the $1M figure, do the math

Are you sure that LTCI would have paid for the items you listed above for your grandmother? I would be very surprised if so. Perhaps some small proportion of it?

[saluki9]

Quote:

Originally Posted by Rich_in_Tampa Are you sure that LTCI would have paid for the items you listed above for your grandmother? I would be very surprised if so. Perhaps some small proportion of it?

Don't be suprised, if you purchase a policy with home care why wouldn't it be covered? BTW: Many LTC policies work on indemnity and not reimbursement. As long as you fail their ADL requirements they pay the benefit no matter what. You could use the money to buy grandma a Porsche if you wanted to.




The policy they turned down was for $150 a day indexed at 5% with home care

365 X 12 X 150 = $657,000 and that is without indexing

[honobob]

http://www.howardgottliebltc.com

Here is a LTC web site that will answer alot of questions.* From what I see and from what I pay I don't see where it is as expensive as some are claiming.* I pay $1076 a year for the premium plan and that has gone up only about $100 a year over 8+ years but my daily coverage has got up 40% (5% inflation factor).* When I checked on the site posted earlier I saw that I would pay about $500 a year more if I had waited to purchase.* Am I out $8K?* I don't think so.

People here that say they are "self insuring" ARE NOT unless you have the ability NOW to pay $5K a month and still provide for the spouse.* You are playing the odds.* Nothing wrong with that but don't fool your self into thinking if the unfortunate happens you've got a plan.* You are no more prepared for that incident than the people you complain about because they don't plan for their retirement.* They're just "self investing" their retirement thinking they won't live that long/will win lottery/gov't will take care of them.* Plus all that money stuff is hard to understand and you'll only lose money like '29 and .com bust.

And that $5K a month doesn't cover much.* You STILL pay your own medicine and doctor stuff that the medicare doesn't if you're of age.*

Not saying it's for everyone but you should know the actual costs, benefits, probilities and "self insure" expenses.

If I couldn't afford it I would check how much I could raise by only having liabiliy insurance on vehicles and if the homeowners would reduce enough if I kept the bare legal minimum on the house and put that money to the LTC.* I've been paying homeowners and car ins for over for a combined 65 years!! And I haven't collected a cent!* Other than the liability I could replace either in the unlikely event of loss.

[Brat]

Most policies offer a home care option, although if you choose instutional care they are a little cheaper. *

I think home care is riskier, elder abuse and swindles - not to mention staff management.

In the NW lots of care facilities that would have been licenced as intermediate care nursing homes are now licenced as assisted living facilities. *The facilities themselves vary alot on the amount of care they can provide.

When you review a policy make sure that assisted living facilities are covered facilities. *

The OPM program some have described as expensive.. BUT one of OPM's criteria was vendor's track record of NOT increasing premiums, and they are guarinteeing the policy.* Given the fact that nothing in life is guarinteed, that is better than most.

[MasterBlaster]

Here's a question for the forum:

How much should your net-worth be for you to self-insure LTC and forego any insurance policies ?

[Sheryl]

Quote:

Originally Posted by wab Can anybody comment on the worst-case term length for long-term care?* *I assume that for people with, say, stroke-induced dementia that lifespans are relatively short and quality of life is fairly low.* *Is there a group who needs long-term care but who also maintain a high level of brain function and quality of life?

My grandmother died last year at the age of 101. She went to assisted living at 92 and after a broken hip, to a nursing home at about 94, IIRC. So 9 years or so. She went from walker to wheelchair, but was fairly alert and able to read, watch tv, socialize, etc.

She depleted most of a sizable trust from her second husband - much to the chagrin of his children from first marriage, who never did get their hands on it - most of them died before she did.