Newventurer
Recycles dryer sheets
Like the rest of us these insurance companies have been chasing yield and may not have priced in the extended period of extremely low rates. They are not known for ‘eating’ losses.
We’re having a difficult time finding a nursing home that will accept my MIL on Medicaid. It seems those that accept Medicaid only do so for a limited number of beds and have long waiting lists for those.
Curious where you got this formulation: I never heard it before. I am single and my annual Genworth premium is $3400. I bought it at $2300 at age 55 and I'm now 61. That's a big rise, obviously, but it is still way below one-half of one percent of my net worth and is very good coverage. I keep it because my own research has demonstrated that it is a bargain, still, for the coverage, at least in terms of what my dollars would buy today.
We’re having a difficult time finding a nursing home that will accept my MIL on Medicaid. It seems those that accept Medicaid only do so for a limited number of beds and have long waiting lists for those. DW and I have LTC, but her parents don’t and we’re finding it difficult to place her in a new place. The memory care she is in now doesn’t accept Medicaid, so we have to move her.
DMIL paid $100/month to Genworth from age 50 til she passed almost 89. She had about $25,000 paid back over the years, but DW had to stomp, fight, claw and scream for every nickel. But it is insurance, the only way to win is to lose.
It would seem logical that there would be a "death spiral" with long-term care insurance, but that has not been the experience with any insurer.
Perhaps the 'death spiral' occurred when many companies decided to no longer offer the insurance? Just a thought.
The fact that they stopped selling new policies did not create a death spiral because LTC insurance is reserve-priced.
What do you mean by "reserve-priced"? Never heard that term before.
Long-term care insurance is "reserve-priced". Reserves are set aside 10, 20, even 30 years in advance of expected claims thereby protecting the younger policyholders from a death spiral even after all the older policyholders have passed away.
Other types of insurance like medical, auto or home insurance base their pricing on the prior year's claims. That's not how long-term care insurance is priced because it has a long-term horizon.
My in-laws divorced and FIL is in a nursing home on Medicaid now. MIL visits him and makes sure he has good care but it isn’t bankrupting her. Seems to be a viable option.
Long-term care insurance is "reserve-priced". Reserves are set aside 10, 20, even 30 years in advance of expected claims thereby protecting the younger policyholders from a death spiral even after all the older policyholders have passed away.
At this age (65) and thoroughly enjoying my independence, I can't imagine getting remarried anyway even if I do meet a good man.
My in-laws divorced and FIL is in a nursing home on Medicaid now. MIL visits him and makes sure he has good care but it isn’t bankrupting her. Seems to be a viable option.
Are you saying that "divorce" is the option?
[Banned LTC Salesman],Even after a big rate increase less than 5% of policyholders lapse their policy. About 50% lower their benefits and about 45% keep their benefits the same and pay the higher premium.
The reason older policies have had such large rate increases is due to the unexpected popularity of long-term care insurance. Insurers assumed that about 4% of policyholders each year would let their policies lapse. Instead, only about 1% of policyholders each year let their policies lapse.
This resulted in about twice as many in-force policies (after 20 years) than the insurers had projected. All the "profit" they had projected from the lapsed policies did not materialize. With twice as many in-force policies, claims are twice as high as they had projected, resulting in a justification for some very large rate increases.
Fortunately, new policies have very different pricing regulations and more conservative pricing models.
And reserves can turn out to be grossly inadequate due to erroneous initial assumptions. I'm a retired FCAS, so not involved in LTC pricing but trust me, the same thing happens in LTC.
Back to LTC, find some way to give me a reasonably priced policy that has a long waiting period (say a year) and I will buy it. My fear is not LTC costs for two or three years. My fear is the cost for 5+ years. Not sure about year four yet.
That seems to be the view of at least half the women I know who are in that late 50's to 60's age range. They give various reasons: emotional entanglements, reduced SS checks, independence, step child issues, and the financial dangers of getting tied to another person's situation in life.
Back to LTC, find some way to give me a reasonably priced policy that has a long waiting period (say a year) and I will buy it. My fear is not LTC costs for two or three years. My fear is the cost for 5+ years. Not sure about year four yet.
There are policies with 365 day elimination period.
A healthy 55 year old couple could share a million dollars of LTCi benefits for about $170 per month per spouse. That policy would have a 365-day elimination period.
That seems reasonably priced to me.
We will have to agree to disagree on what is a good price. And I don't want them able to raise the price to nearly un-affordable levels as I get nearer to the age when I might use it. My old life insurance policy had a maximum price built into it every year. While it was high (about 2x the expected price) I made sure I could afford it when I bought the policy. Afford it, yes. Like it, no.
In my state I can't find the long elimination periods. Or maybe the insurance guys just don't want to sell them to me? Not enough commission?
We will have to agree to disagree on what is a good price.
What price with guaranteed no increase would it take to be a "good price"?
The policy I am looking at is a hybrid whole life plus inflation rider and it is not cheap but does effectively have a 2 year deductible (i.e. only pays $4500 a month first 2 years than the rider pays at inflation prices). I have reported on it previously.
As there are only two options for Lifetime benefit, National Guardian Life (traditional LTCi) and One America (hybrid) both which have guarenteed single premium (i.e. no increase in cost over life(s) of policy owners).