1. I'm not off the hook anyway- most policies cover only for a finite number of years and any excess cost over the face amount of the policy, even in the years I'm covered, is on me.
2. Anecdotal evidence exists to show that when I actually need the coverage, my family and I might have to fight tooth and nail to get it.
3. The premiums could go up or the coverage could be reduced. Certainly now that companies have more extensive LTC experience data they can price it better, but they're still pricing for things that could happen 20-30 years down the road. There will be errors and it will likely be underpriced, not overpriced.
4. If I don't go into LTC and, like my dear mother or my dear husband, die quietly at home in hospice care of untreatable cancer, the LTC company wins.
5. Worst case- I don't buy insurance, I get Alzheimer's like my Uncle, and all my assets go to pay for quality LTC. That's a risk I'm willing to take. My son, my only heir, agrees.
Thank you, Athena53. You brought up some important concerns.
1. Fortunately, 44 states have Long-Term Care Partnership Programs that can protect your assets even if your long-term care policy runs out of benefits. For every dollar a Long-Term Care Partnership policy pays in benefits a dollar of assets can be protected from Medicaid spend-down requirements and Medicaid estate recovery. In other words, if someone bought a Long-Term Care Partnership policy with $750,000 of benefits and exhausted the policy, they could apply for Medicaid and they could keep $750,000 of savings. (Normally Medicaid requires you spend your savings down to about $2,000).
2. This year about 300,000 long-term care insurance policyholders will have their claims paid. To be frank, I was surprised when my mother-in-law's claim was approved in only three weeks. But, that's why I didn't handle the claim. I knew that there were home care agencies who process hundreds/thousands of claims every year. I'm glad we had the agency handle it for us.
3. Fortunately, 41 states have passed new regulations that have removed the profit incentive from rate increases. Under the new rules, if an insurance company requests a rate increase they must decrease the profit levels in their pricing and they canNOT price any profit in the increase itself. This hasn't stopped all rate increases, but it has resulted in fewer and smaller rate increases in most states. Why is this regulation working? Because no insurance company likes to reduce profits. The reg hit 'em where it hurts the most: PROFITS.
3a. LTCi policies purchased before these new rules took effect are NOT covered by these new rules.
3b. As Nords pointed out, the FLTCIP and other self-funded groups (like CalPERS) do NOT comply with these new rules.
4. I'm not sure how to respond to this particular statement. At the end of last year, after spending over $15,000 on medical insurance premiums for my family, I was not disappointed that the "insurance company won" because we didn't require major surgery. I was pretty happy that none of us needed to use the insurance.
5. This one makes about as much sense as #4. Why would someone want to risk hundreds of thousands of dollars? Doesn't it make sense to hedge against risk? Couldn't your grandchildren benefit from inheriting your money? If spending a few hundred a month for an insurance policy is detestable, how comfortable will it be to write out checks for ten thousand plus every month to a home care agency or memory care facility?
