LTC Poll

[imoldernu]

Here's our situation:
We bought $100/day policy about 20 years ago at age 54, after DW had a stroke, and when full year nursing home costs were about 35K. No inflation clause. Today, in our retirement community (65 houses, 65 apartments, 45 assisted living quarters, 65 nursing home units) the cost for full nursing care is about 77K. Our (now separate) policies total about $2400/yr and haven't gone up in 10 years. The original policy has changed hands 5 times, and is now held by a Trust (SHIP) in Pennsylvania.

As it stands, the policy would cover about 1/2 the annual costs for 3 years. The rest would come from our savings.

Now... to address the Medicaid situation. Yes, it is true that there is a spend down from assets before Medicaid would pick up the nursing home costs.
BUT... while the state will take all but (in our case) about $50,000... the non-nursing home spouse may keep a car and the family home.
With the demise of the nursing home resident, the survivor may keep the home and its value.

That means a delicate balance between existing assets and the value of the home. In our case, the balance works, as we do not have substantial assets enough to pay the full LTC costs for 4 or 5 years. The house value would still exist.

As has been discussed on many threads, owning the home has an extended benefit. Worthwhile to explore this issue with your state Laws on minimum assets and the "lookback" period. In fact, the decision to buy our current home was made for this purpose. We are now past the 5 year lookback period.

This article is a good explanation of the process:
http://coulsonelderlaw.com/understanding-medicaid-lookback-transfer-penalty-rules/

Worthwhile depending on your net worth. Making the decision to use the home retention rule is definitely subject to the five year lookback rule, so timing is important.

 

[Katsmeow]

That "qualifying for Medicaid" idea is a tough one. You've got to spend almost all your liquid assets to get to that point, so a spouse could be in a bad spot. I think CR's advice may consider the fact that a person with a smaller nest egg (or retirement income from various sources) would likely have to significantly reduce their standard of living just to make the LTCI premium payments, so CU is recommending they roll the dice. If they lose they'll be in a bad spot, but at least they'll have Medicare (when they are destitute). True enough, but it's a bad situation for the spouse.

Medicaid qualification does currently have some protection for spouses. The spouse is able to keep a certain amount to have a specified income. Also, the spouse can keep the house and can keep a certain amount of assets. I think in my state it is about $115,000. All of this is very complex and anyone who faces this really needs to get an elder law attorney involved in their state.

When I read about spousal protections I do feel better about the whole thing. However, the fear is that these rules might change in the future and not for the better. That is, I hate the idea of relying on the current spousal protections and then have them be changed 10 years from now.

 

[nwsteve]

Debating the LTC decision strikes me as very similar to the "when do I take SS" question in that there is NOT really ONE answer. So much depends on individual variables, that any generalization is over simplification at its worst. There is probably more risk, IMHO, associated with personal health variables and family support options, that the financial tradeoffs are almost the easier to solve. (Not saying the $$ decision are easier to solve, but more dependent on the personal risk profile)
Given so much of the LTC decision is driven by personal family health history and longevity, I find it interesting that so little of the discussion recognizes the difference in risk associated with familial factors. In that vein, consider the difference in risk for an individual whose has multiple evidence of Alzheimer versus the person who does not have this huge risk. We just got our 23andMe results and part of the aha was recognizing since we did not have any of the major debilitating disorders, we could reasonably self-insure.
For singles, especially those without much extended family, clearly they face a completely different risk profile than those with spouses and sibs.
For us the combination of our health risk profile coupled with the chaotic nature of insurance coverage, just makes it worthwhile for us to stay on the sidelines of the LTC
decision.
Nwsteve

 

[Katsmeow]

This article is a good explanation of the process:
Understanding the Medicaid "Look-Back" and "Transfer Penalty" Rules - St. Louis, MO | Coulson Elder Law

Worthwhile depending on your net worth. Making the decision to use the home retention rule is definitely subject to the five year lookback rule, so timing is important.

imoldernu - I had read at various places on the internet that interspousal transfers (those between spouses) are not subject to the five year lookback rule and could be made without penalty. The reason it is without penalty is that assets of the spouse are included within countable assets of the disabled person in any event and so the transfer doesn't help eligibility according to link below. However, there are rules which allow the house and one car to be kept.

Therefore, I didn't see anything which indicated that the purchase of the house - where it is not being transferred to a third party - is subject to the 5 year lookback rule.


I just haven't found anything that says that the 5 year rules comes into effect at all if the house is being occupied by the community spouse and the house isn't be transferred to a third party

The article you link doesn't talk about interspousal transfers at all. Here are some I found that discuss the issue of spousal transfers and the house in particular.

I don't personally know what is correct so don't rely on me on any of this. (Citing these links is not endorsement of them. Consult with your own attorney in your own state.) Does anyone know?

How Can I Safely Transfer My Assets to Get Medicaid to Pay for Long-Term Care? | Nolo.com

Medicaid for Married Couples - This one seems particularly written in plain language.

Sayre &amp Sayre PS: Article: Gifting

www.coaaa.org/pdf/Caregiver/Institutional-Medicaid.pdf‎

How Can I Safely Transfer My Assets to Get Medicaid to Pay for Long-Term Care? | Nolo.com

 

[Ready]

Lots of good information in today's posts. Does anyone have an LTC policy that has a cap on how much it can be increased each year? It would seem that if you had a cap of CPI, or perhaps something even more predictable, like a CPI or 3% whichever is less cap, you could then run a forecast of how much you will spend on LTC insurance over a period of time. You could then compare it to how much you would have if you invested the same amount of money in a stock/bond portfolio, and do some analysis to see where things stand.

However, if an insurance company can just randomly raise rates by a significant amount (the CR article claims some people saw 90% increases in one year), than how can you model that at all? How is that even insurance, if the price you pay today has no bearing on what they might want to charge to keep you insured 10-20 years from now? It would seem that without a reasonably tight cap, an LTC policy really doesn't offer much value at all. You may get lucky and be with an insurance company that doesn't raise rates substantially, but who wants to rely on luck when spending this much money?

 

[samclem]

Another look at the quote (below) from the NOLA article leads to this conclusion: Truly catastrophic LTCI (say, starting payment after expenses equal to 2 years in a NH) ought to be much less expensive than current policies with a 90 day elimination period. With a 2 year elimination period, only (roughly) 8% of policies would pay off at all. I don't know what the distribution of the durations is (people who last 24 months are probably going to hang on for awhile), but still . . . if we look at existing LTCI rates for policies that start paying at 3 months, and the average stay (of the entire over 65 YO population) is just 10 months (math in previous post), then there should be quite a reduction in premiums for those willing to wait 2 years for their first check.

Why can't we buy that policy?

The Odds of a Long Nursing Facility Stay

Most people will not spend years and years in a nursing facility.

• Two-thirds of all men, and one-third of all women, age 65 and older will never spend a day in a nursing facility.
• Most nursing facility stays are brief -- only about 10% of men and 25% of women age 65 and older spend more than a year in a nursing facility.
• Only 10% of all nursing facility residents will stay longer than three years.
• More than half of all nursing facility stays last six months or less. The average stay of those who enter a custodial care facility is about 18 to 20 months.

 

[Carlos2]

Carlos, I respect your decision to buy insurance. Still,the information you've provided below just isn't correct.

I see no reason to think the majority of people who reject LTC insurance are "fooling themselves", and that definitely doesn't appear to be the case on this board. I see a lot of careful consideration: of the possible need for coverage, and of the glaring problems with LTCI as it exists today.


Right. And where is the LTCI policy that lets me buy the catastrophic insurance I really need for those "large risks"? I don't need coverage starting at Day 91, and I don't want to pay for it anymore than I'd have an auto policy that has a ten dollar deductible.


Misleading and incorrect. Most people never go into a nursing home. Of those who do go in, the average stay is a less than 2 years. But, a few people do stay a long time.

From the excellent NOLO site on LTCI " . . .Risks and Benefits" :
So, a little public math from the stats above: If we assume 70% of those over 65 are women, then 46% of people will enter a nursing home. If the average stay of those who do check in (both genders) is 20 months, then the average stay for >all< people over 65 (both genders, and including those who never go to a nursing home) is about 10 months. Subtract 3 months for the elimination period before insurance starts to pay and it looks like the average nursing home bill (today's costs) that the LTCI would have to pay is 210 (days) x $225 (dollars per day) = $47,250.
Now, this disregards other non-nursing home costs that the insurance might pay (home health care, etc), but it also disregards all those "long tail" costs for people who stay in the nursing home for 10 years, but they only have a 3 year LTCI policy. And we should remember the money the insurance companies make due to lapsed policies. While a rough estimate, this $47,000 of coverage is probably not wildly off what we should expect their average payout to be.
We shoudn't insure for "averages," instead we care about insuring against our own improbable risks. But averages do matter to the insurance companies, and they should matter to us when we are deciding if LTCI is a good product.


Some will, some won't pay a dime.


Absolutely not true. There's no way that 70% of people pay $240K or more for a their long-term care.


For the reasons above,this isn't an accurate question. Most people won't pay $240K for their care. And, of those who buy insurance, there's no telling what their premiums will actually be, since they truly aren't guaranteed to stay the same.

But even if it were true, we figured above that the insurance company should expect to pay out, on average, $47,000 (today's dollars) for each policy they write. Is it a good deal to give them $50K today for $47K in expected benefits 20-30 years from now? "Which is the better deal"?

Did you find this stuff posted by a government source on the OPM's LTCI site, or is this a user comment? Again, this isn't meant to call you out, but people are looking for solid information on a hard topic.

I got this post from the insurance forum. He was posting to mostly other insurance agents. Although, I am not in that industry, I began reading that forum and others as I was doing my research on LTC a few years ago. I believe he was just trying to give some context to the need for the insurance and comparing to the other sources that people are willing to pay. I am sure we can all dissect this until kingdom come to justify our reasoning. However, like I say, none of us has a crystal ball and even if we can self insure we don't know what our future holds and if we become ill in a way that would require us to need this type of care, we could end up wishing we had it. I was just sharing another point of view on the matter. He more than likely is an insurance salesman.

 

[Carlos2]

I would question this statistic too, I have only met 2 people in my whole life who have told me they lost their house to a fire. One was my mother, the fire was in 1933, the other was a friend who lost her house in the Oakland Hills fire.

But you do buy the insurance, correct? You will know many more people who need some sort of LTCi, but people won't buy it like they do homeowners insurance.

 

[samclem]

Lots of good information in today's posts. Does anyone have an LTC policy that has a cap on how much it can be increased each year? It would seem that if you had a cap of CPI, or perhaps something even more predictable, like a CPI or 3% whichever is less cap, you could then run a forecast of how much you will spend on LTC insurance over a period of time. You could then compare it to how much you would have if you invested the same amount of money in a stock/bond portfolio, and do some analysis to see where things stand.

However, if an insurance company can just randomly raise rates by a significant amount (the CR article claims some people saw 90% increases in one year), than how can you model that at all? How is that even insurance, if the price you pay today has no bearing on what they might want to charge to keep you insured 10-20 years from now? It would seem that without a reasonably tight cap, an LTC policy really doesn't offer much value at all. You may get lucky and be with an insurance company that doesn't raise rates substantially, but who wants to rely on luck when spending this much money?

The "inflation protected" policies are generally intended to remain level (no increases) forever. The "buy more as you go" policies (often known as "future purchase option") generally are sold as "you can buy more coverage at out current rate at the time". The problem is that insurers were losing money because they expected a certain percentage of policies to lapse. They guessed wrong on the number of lapsed policies: as LTC costs rose, more of the existing policyholders than expected realized that they had locked in a favorable rate and they kept paying for their policies instead of walking away from them at the rate expected by the insurers. Now, for a regular business, this would be known as "tough luck--you did a bad job of estimating your future costs. Sell some skyscrapers and pay the policyholders what you promised." But instead, insurers went back to state regulators, cried a river, showed them the red ink, and won rate increases for entire classes of policyholders. So, even if a particular policy had a "cap", you can bet there's language in the fine print that allows them to bump up the rates if it is for a whole class of policies (not just one person) and if it is approved by regulators.

It stinks.

The galling part is that this should be a simple product. This isn't health insurance, where a new $5000 per picture super X-ray machine is developed, or amazing new but incredibly expensive chemo treatment becomes available and BC/BS is expected to pay for it. For LTCI, the insurers have a capped payout amount per day--simple, simple. Now, folks may start living a little longer while in LTC, but that's a gradual increase in expenses. LTC is not high tech: It's grungy, low-wage labor and all we've asked the insurance companies to do is pay off the dollar amount that we agreed to when we finally need the care. In general, they insurers aren't taking any risk that the cost of my daily care will go through the roof: All I can get is the 3-5% annual increase in benefits that they have already built into my premiums from Day 1. I think the rate increases may also be due to the low interest rate environment as well as the decreased lapse rate: The insurance companies aren't making as much as they'd hoped on their investment of the money we pay them. Again--that's unfortunate. But a contract should be a contract.

 

[Ready]

But you do buy the insurance, correct? You will know many more people who need some sort of LTCi, but people won't buy it like they do homeowners insurance.

Well, here is how I would look at homeowners insurance vs LTC. I pay $1600 per year to insure my home. If the entire building burnt down, the replacement cost, with content, would be $850,000, which is the policy limit. So I'm paying 1.88% per year for $850,000 of protection.

Based on the above posts suggesting that LTC typically maxes out at three years coverage, at a rate of $80,000 per year, you are buying $240K of coverage. At 1.88%, it should be $452/year, or $38/month. If I could buy LTC for $38/month, I think that would be fine. But it appears that most people are paying north of $100/month for it, which places it at three times the cost per dollar insured. That is what makes it seem questionable to me.

 

[samclem]

He more than likely is an insurance salesman.

Yes he is. And he's misleading people.

 

[Carlos2]

States determine rate increases

Lots of good information in today's posts. Does anyone have an LTC policy that has a cap on how much it can be increased each year? It would seem that if you had a cap of CPI, or perhaps something even more predictable, like a CPI or 3% whichever is less cap, you could then run a forecast of how much you will spend on LTC insurance over a period of time. You could then compare it to how much you would have if you invested the same amount of money in a stock/bond portfolio, and do some analysis to see where things stand.

However, if an insurance company can just randomly raise rates by a significant amount (the CR article claims some people saw 90% increases in one year), than how can you model that at all? How is that even insurance, if the price you pay today has no bearing on what they might want to charge to keep you insured 10-20 years from now? It would seem that without a reasonably tight cap, an LTC policy really doesn't offer much value at all. You may get lucky and be with an insurance company that doesn't raise rates substantially, but who wants to rely on luck when spending this much money?

Insurance companies request rate increases from each state's Department of Insurance. The insurance company must send in data and rationale for the request. I have noticed from my state, CA, that they are very rigid about giving increases to the insurance companies which is probably why so few insurance companies sell ltci in California now. A company can request an increase and the state can approve the amount, deny the entire request, or approve a certain amount of the request. However, insurance companies do not have the final word on rate increases.

 

[ChrisC]

We've been enrolled in the Federal LTCi since it started in 2003. I can "self-insure" easily and it's very unlikely I'll ever have to rely on Medicaid, like my mother who's been in a nursing home for the last 6 years at $10K per month. I believe my LTCi has flaws, but I can live with them. I enrolled at 48 and my payments for an inflation adjusted policy with a current daily benefit amount of $238 for a five year period of care has remained level (though a price increase did occur a few years ago but I managed to keep premiums level by reducing my inflation adjustment policy percentage). I'm happy with this policy and hope I never have to use it. If I do use it, in a worse case scenario, I figure this will backstop my financial exposure by $350-400K. If I never use the policy and live a long time, I figure I'm out-of-pocket by $40K.

A few factors that militate me keeping this policy: (1) personal experiences with knowing people who have had long term care caused by old age and unfortunate accidents; (2) I'm pretty sure I can pay for all my future LTCi premiums from my HSA, assuming very modest returns in that account; (3) want to leave a large estate to children and family.

 

[imoldernu]

imoldernu - I had read at various places on the internet that interspousal transfers (those between spouses) are not subject to the five year lookback rule and could be made without penalty. The reason it is without penalty is that assets of the spouse are included within countable assets of the disabled person in any event and so the transfer doesn't help eligibility according to link below. However, there are rules which allow the house and one car to be kept.

Therefore, I didn't see anything which indicated that the purchase of the house - where it is not being transferred to a third party - is subject to the 5 year lookback rule.


I just haven't found anything that says that the 5 year rules comes into effect at all if the house is being occupied by the community spouse and the house isn't be transferred to a third party

The article you link doesn't talk about interspousal transfers at all. Here are some I found that discuss the issue of spousal transfers and the house in particular.

I don't personally know what is correct so don't rely on me on any of this. (Citing these links is not endorsement of them. Consult with your own attorney in your own state.) Does anyone know?

How Can I Safely Transfer My Assets to Get Medicaid to Pay for Long-Term Care? | Nolo.com

Medicaid for Married Couples - This one seems particularly written in plain language.

Sayre &amp Sayre PS: Article: Gifting

www.coaaa.org/pdf/Caregiver/Institutional-Medicaid.pdf‎

How Can I Safely Transfer My Assets to Get Medicaid to Pay for Long-Term Care? | Nolo.com

Thanks... I believe you are correct... I based my statements on what our (non eldercare) attorney had told us in 2004 (re 5 yr. lookback on home purchase), and that is apparently wrong. There doesn't seem to be any lookback period for the purchase of a home by the nursing home patient or the spouse.

This is good news... and means that depending on the state, the following could be a good move.
example:
Mr. Jones and his wife have been renting for many years, and have a "nest egg" of $600,000. Mr. Jones is afllicted with Alzheimers, and may reasonably expect to be placed in a Nursing Home in the near future. If the Jones' do nothing, the state will take the most of the $600,000 to pay for the nursing home expenses for the next 5 years. Mrs. Jones will be able to keep her car and a limited amount of cash... perhaps $50K to $100K.

On the other hand, realizing that LTC will be necessary, the Jones' could take $500K from their savings and buy a $500K 'home'. The state will not take the home, which is still being occupied by Mrs. Jones. When Mr. Jones passes away, Mrs Jones will be able to keep the home. (The limit can be up to $750,000 in some states).

You said:

I don't personally know what is correct so don't rely on me on any of this. (Citing these links is not endorsement of them. Consult with your own attorney in your own state.)

+1

 

[imoldernu]

imoldernu - I had read at various places on the internet that interspousal transfers (those between spouses) are not subject to the five year lookback rule and could be made without penalty. The reason it is without penalty is that assets of the spouse are included within countable assets of the disabled person in any event and so the transfer doesn't help eligibility according to link below. However, there are rules which allow the house and one car to be kept.

Therefore, I didn't see anything which indicated that the purchase of the house - where it is not being transferred to a third party - is subject to the 5 year lookback rule.


I just haven't found anything that says that the 5 year rules comes into effect at all if the house is being occupied by the community spouse and the house isn't be transferred to a third party

The article you link doesn't talk about interspousal transfers at all. Here are some I found that discuss the issue of spousal transfers and the house in particular.

I don't personally know what is correct so don't rely on me on any of this. (Citing these links is not endorsement of them. Consult with your own attorney in your own state.) Does anyone know?

How Can I Safely Transfer My Assets to Get Medicaid to Pay for Long-Term Care? | Nolo.com

Medicaid for Married Couples - This one seems particularly written in plain language.

Sayre &amp Sayre PS: Article: Gifting

www.coaaa.org/pdf/Caregiver/Institutional-Medicaid.pdf‎

How Can I Safely Transfer My Assets to Get Medicaid to Pay for Long-Term Care? | Nolo.com

Thanks... I believe you are correct... I based my statements on what our (non eldercare) attorney had told us in 2004 (re 5 yr. lookback on home purchase), and that is apparently wrong. There doesn't seem to be any lookback period for the purchase of a home by the nursing home patient or the spouse.

This is good news... and means that depending on the state, the following could be a good move.
example:
Mr. Jones and his wife have been renting for many years, and have a "nest egg" of $600,000. Mr. Jones is afllicted with Alzheimers, and may reasonble expect to be placed in a Nursing Home in the near future. If the Jones' do nothing, the state will take the most of the $600,000 to pay for the nursing home expenses for the next 5 years. Mrs. Jones will be able to keep her car and a limited amount of cash... perhaps $50K to $100K.

On the other hand, realizing that LTC will be necessary, the Jones' could take $500K from their savings and buy a $500K house. The state will not take the home, which is still being occupied by Mrs. Jones. When Mr. Jones passes away, Mrs Jones will be able to keep the home. (The limit can be up to $750,000 in some states).

You said:

I don't personally know what is correct so don't rely on me on any of this. (Citing these links is not endorsement of them. Consult with your own attorney in your own state.)

+1

I'd say that under the "net worth" circumstances described above, the medicaid strategy could be quite meaningful.

 

[mickeyd]

I agree with the final two "I don't" choices though I don't know if my assets are in the middle or not as do 70% of the others who have voted so far.

Save yer money; take yer chances.

 

[Katsmeow]

I got this post from the insurance forum. He was posting to mostly other insurance agents. Although, I am not in that industry, I began reading that forum and others as I was doing my research on LTC a few years ago. I believe he was just trying to give some context to the need for the insurance and comparing to the other sources that people are willing to pay. I am sure we can all dissect this until kingdom come to justify our reasoning. However, like I say, none of us has a crystal ball and even if we can self insure we don't know what our future holds and if we become ill in a way that would require us to need this type of care, we could end up wishing we had it. I was just sharing another point of view on the matter. He more than likely is an insurance salesman.

I am curious about your statement that you got this post "from the insurance forum" as I note that it is posted in a forum on Bogleheads.

Is that where you got it from or are you the person who posted it at Bogleheads (different user name but lots of people have different names at different sites).

Bogleheads • View topic - So You're Going to Self Insure Long Term Care?

 

[Katsmeow]

In the Boglehead thread cited in my prior message there is a link to a Genworth claims practices presentation which is interesting (dates seems to be mostly as of 2009 or 2010) talking about their long term claims:

bjfim.bordenhamman.com/wp-content/uploads/2010/03/Renee-LTC-Claims-Practices.pdf

45% of claims last less than 1 year.

Average length of claims that last more than a year a year is 3.9 years.

15% of claims will last more than 5 years

48% of all claim dollars are paid to claimants with mental disorders including dementia (Note: I was surprised this wasn't higher). Dementia claims are only 11% of claims lasting less than a year, but 44% of those lasting more than 1 year. Average age of claimant is 78.

Married women tend to claim at an earlier age than single women and men (make of that what you will).

Interestingly, says that 80% of people never change care setting. If they start at home for example with home health care they usually stay there.

 

[Carlos2]

Posted Twice

I am curious about your statement that you got this post "from the insurance forum" as I note that it is posted in a forum on Bogleheads.

Is that where you got it from or are you the person who posted it at Bogleheads (different user name but lots of people have different names at different sites).

Bogleheads • View topic - So You're Going to Self Insure Long Term Care?

I also posted it on Bogleheads. I wanted to read their reactions as there are many there that seem to find no reason to buy LTCi. Yes, insurance forum is where I read the post.

 

[samclem]

I also posted it on Bogleheads. I wanted to read their reactions as there are many there that seem to find no reason to buy LTCi. Yes, insurance forum is where I read the post.

It looks like the folks there also found that it was a largely inaccurate sales talk.

 

[Independent]

Nice choice of poll options. I was surprised to find that I'm in the plurality - right now 45% of the responses are "I'd like to insure, but don't like the options".

Over 100 years ago, people figured out that if life insurers were going to sell policies with purported level premiums, then they should be required to provide reduced benefits to people who pay for a while then quit. I won't go into all the reasons for this, but every insurance regulator should understand the concept.

But, when they introduced level premium LTCi, the regulators did not recognize the same set of issues and require nonforfeiture benefits for LTCi. We've been living with the results of that bad decision ever since.

My problem with LTCi is that it locks me in for life, while the company has the option of raising premiums. Officially, I'm "deferring the decision" to reduce the time between the policy issue date and the time I'm likely to get benefits.

 

[ChrisC]

Over 100 years ago, people figured out that if life insurers were going to sell policies with purported level premiums, then they should be required to provide reduced benefits to people who pay for a while then quit. I won't go into all the reasons for this, but every insurance regulator should understand the concept.

But, when they introduced level premium LTCi, the regulators did not recognize the same set of issues and require nonforfeiture benefits for LTCi. We've been living with the results of that bad decision ever since.

My problem with LTCi is that it locks me in for life, while the company has the option of raising premiums. Officially, I'm "deferring the decision" to reduce the time between the policy issue date and the time I'm likely to get benefits.

I take it you're referring to whole life insurance policies and not term life insurance where there is no surrender value. I view LTCi more analagous to term life insurance, with premium that can reset periodically, which also occurs with term life policies, as the risk of death becomes greater (i.e as we get older).

At some point, deferring the decision effectively means pricing one out of insurance coverage. I'm ok with paying for all the term life insurance I've purchased for over 38 years -- it's sunk in cost I hope never to recoup. It will eventually get too pricely for me and I'll drop the coverage next year -- and I'll "self insure." I might do the same with LTCi, but for now, I'm completely satisfied with this picture now and going forward.

 

[bamsphd]

My problem with LTCi is that it locks me in for life, while the company has the option of raising premiums.

+1

I would only want to buy a catastrophic (3+ year exclusion), inflation adjusted, single premium policy (purchase the whole thing with one check). I don't believe such a policy is available in my state.

 

[samclem]

I take it you're referring to whole life insurance policies and not term life insurance where there is no surrender value. I view LTCi more analagous to term life insurance, with premium that can reset periodically, which also occurs with term life policies, as the risk of death becomes greater (i.e as we get older).

LTCi that has the "inflation protection" feature has level premiums for the rest of the life of the policyholder, so it is analogous to whole life insurance. Like whole life insurance, the risk for the later years when one is far more likely to make a claim is already priced into the policy from the first month, and that makes it very expensive to abandon the policy after a few years: The policyholder has paid a LOT of sunk cost. The policies that have the "future purchase option" are not quite as "front loaded," but policyholders still pay much more in the "early years" than they'd pay for to insure against their >present< risk for needing LTC.

 

[Jack_Pine]

+1

I would only want to buy a catastrophic (3+ year exclusion), inflation adjusted, single premium policy (purchase the whole thing with one check). I don't believe such a policy is available in my state.

I think a lot of us would like that. I am not sure it exists at all, let alone in you state. Could be wrong though, happens a lot.......