New LTC Study

[athena53]

Quote:

Originally Posted by REWahoo Typo? $2,600/year x 20 years = $52,000.

Da*n. I should not try and do Math in my head. But, to be fair, he didn't catch it, either.

[Katsmeow]

Quote:

Originally Posted by athena53 Da*n. I should not try and do Math in my head. But, to be fair, he didn't catch it, either.

And, even so, $52k to get $140k in coverage (not considering what that $52k would have earned and the fact that is paid over a period of years, but not considered inflation either) seems underwhelming to me). So the benefit is what $88k in extra benefit over just putting the $2600 a year in a CD each year. I'm not thinking that for most getting that $88k in benefits will really make or break anyone with any assets.

It just seems like too much cost for not enough benefit....

SamClem - I like your ideas for your ideal policy and I would love to have that kind of thing available as well.

[REWahoo]

Quote:

Originally Posted by Katsmeow And, even so, $52k to get $140k in coverage (not considering what that $52k would have earned and the fact that is paid over a period of years, but not considered inflation either) seems underwhelming to me). So the benefit is what $88k in extra benefit over just putting the $2600 a year in a CD each year. I'm not thinking that for most getting that $88k in benefits will really make or break anyone with any assets. It just seems like too much cost for not enough benefit....

+1

We certainly wouldn't have purchased our two LTCI policies back in 2001 if the numbers looked anything like those quoted in this example. Each of our policy limits, after factoring in the 5% compounded annual benefit increase, are now up to $6,000/mo for 3 years, a total benefit of $216,000. For this we have each paid $9,050 in premiums over the past 14 years.

Even with a 50% increase in annual premiums last year (from $584 to $875) I'm still comfortable with keeping the policies - and hoping every penny we pay in premiums is a complete waste...

[samclem]

Quote:

Originally Posted by athena53 He gave a presentation on LTC with a real example (name blacked out, of course) of an insurance company quote. 56-year old female, coverage of $3,900/month, max 3 years of payments or $140K. 60-day waiting period, 3% annual COL increase. $2,600/year premium.

The LTCI program offered to federal employees and federal retirees has rates fairly close to those of commercial providers (it gets no subsidy from the government, and when I compared their prices to quotes I got from Genworth, they were about the same).
For a better policy than the one described in the OP (56 YO, slightly more coverage ($150/day instead of $130/day), slightly longer elimination period (90 days instead of 60--the fed program doesn't offer a 60 day elim period), 4% inflation increase instead of 3%, the annual premium came out to less than $1500 (over 40% less than the premium in the OP). So, I don't think the illustrated policy was an especially good deal, and might not be representative of what is available (or maybe the insured person had some medical issues, etc).

The Federal LTCI calculator is a good place to find ballpark figures for LTCI and see how changing various factors changes the cost. These policies are subject to medical underwriting, but I think their standards might be a bit less stringent than some others so it's possible someone in great health could get a slightly better rate from an insurer. All policies are for individuals (no couples), and men pay the same as women. Link