LTC policy for retirees??

[TwoByFour]

Does it really make sense or is it another way to get your money?

Look at it this way - people are living longer and the fraction of people who require LTC is going up. Over 50% of people 65 or older will require LTC. Insurance companies know this, so to cover their liabilities, they have to charge very high premiums. And since the longevity of people goes up every year, it gets worse and worse for insurance companies to make LTCi profitable for them. This is why so many are getting out of the business.

So it looks to me like LTCi is of marginal utility just by the economics of the business model. And there are stories of policies being reduced in coverage, premiums raised, companies reluctant to pay up.

I told DW if I ever need LTC just take me out behind the barn and shoot me. She won't of course, but I really have little interest in vegetating away in some facility.

 

[MoneyChic]

This is definitely a difficult decision for people "in the middle". If your savings could take the hit of self-insuring, my thoughts are that the insurance is a waste of money unless, perhaps, you are wanting to preserve an inheritance to leave behind.



If you have very little assets, you can just roll the dice and have the government take care of you if you needed it. If you actually have very little assets, then paying for LTCI premiums likely isn't something you could afford anyway either.


For the rest of us in the middle - it's a tough call. Definitely shop around and get quotes from a few different agents (at least one of them should be independent), and also discuss this with your financial advisor if you have one. Everyone's situation is different.


I've also heard people say their plan is to get divorced if one of them needed LTC so the healthy one could keep the assets and the government would foot the bill for the one in a LTC facility. This isn't nearly as simple of a solution as it sounds, so be sure to research the details of this situation in your state VERY well (including checking with an attorney) before assuming it will work in your planning.

 

[COcheesehead]

I've also heard people say their plan is to get divorced if one of them needed LTC so the healthy one could keep the assets and the government would foot the bill for the one in a LTC facility.

In a marital property state assets are split 50/50. A judge won’t sign the agreement otherwise. That plan would not work.

 

[jimnjana]

I have a rider on a life policy that will pay 90% of the death benefit for LTC care. It’s paid in cash so you can apply it as needed. I’ve had the policies long enough that they are self paying based on earnings. People hate whole life, but they can be of value.

I'm looking at doing same thing. Meeting next week to discuss with ins rep. Thinking on ltc has changed since er, will probably change again. This option seems to be a reasonable back up to self funding.

 

[Scuba]

I don't see your point. Are you suggesting that one should insure for a possible worst case scenario? Like 15 years in a NH?

From what I see here, there're no policies out there that make much financial sense, are difficult to deal with and likely quite limited in duration/coverage.

I see self insuring as the most likely option. Rolling the dice? Sure. But I don't see many other ways to go. I'm open to suggestion.

As I noted above, in our personal case, a long, long term NH stay would change our lives, but not break the bank as we're already spending that kind of money on our current lifestyle; it would end up being the same money spent differently rather than an over-and-above cost.

Sadly, I've learned more about NHs, SNFs and in-home-care over the past two years than I ever wanted to know. I do believe there's a notable shift to in-home-care that will greatly mitigate the NH length of stay.

Here's a quick article to that effect: http://www.modernhealthcare.com/article/20170817/NEWS/170819912

Excerpt: "...Although the number of aging baby boomers has swelled in recent years to the fastest growing population in the U.S.....people are more likely to end up in assisted living facilities or rely on home health professionals for care, said Jason Lundy, partner of the health practice group at law firm Polsinelli. Only the sickest patients now end up in nursing homes, he said..."

I agree with you, Marko. I used to work in the industry and for our residents, the average length of stay in a NH was just over 2 years. With the ACA, NH payments have been cut so many standalone SNF’s are going out of business and many more will in the future. The economics just don’t work anymore.

Technology, consumer desires, and necessity will continue to drive care out of the NH facilities to home care, board & care, and assisted living facilities. DH and I are in our 50’s. No telling how this type of care will be delivered once we reach an age of likely needing it. We are self-insuring.

 

[COcheesehead]

I'm looking at doing same thing. Meeting next week to discuss with ins rep. Thinking on ltc has changed since er, will probably change again. This option seems to be a reasonable back up to self funding.

You also have the cash to use, if you don’t need it for LTC. 3 options: cash, LTC or death benefit.

 

[Teacher Terry]

Even with a devoted spouse once someone is wearing diapers and falling constantly with both being old that person ends up in a home.

 

[clifp]

One of the big issues for me with LTC is getting the insurance company to pay up.

If I'm infirmed enough to need LTC, I doubt I'm going to have the brains or perseverance to dig through the LTC policy to fight with an insurance company when they deny paying for something.

Now if you have some smart kids, who are lawyers and/or good with money, or perhaps a financially savvy spouse who is 10-20 years younger then I think there is reasonable chance that you can hold the insurance companies feet to the fire.

But without a healthcare advocate, it seems dubious that you'll actually get the benefit you think you bought.

 

[REWahoo]

Clif, after Nords documented his saga with his dad's LTC insurer I contacted the elder law attorney who did our estate planning to see if she did that sort of work. She recommended using the services of a local medical claims professional who who specializes in jumping through the required hoops to get insurance companies to pay up.

Based on that, I informed my two smart kids to contact one of these folks and use ther services if DW or I ever needed to use our LTC policy and they had trouble getting claims paid. Alliance of Claims Assistance Professionals (ACAP)

 

[Dtail]

In a marital property state assets are split 50/50. A judge won’t sign the agreement otherwise. That plan would not work.

What about having a partner who one was never married to and start spending down their assets?

 

[COcheesehead]

What about having a partner who one was never married to and start spending down their assets?

Devil is in the details I guess. Some states have common law marriage rules, some don’t.

 

[COcheesehead]

One of the big issues for me with LTC is getting the insurance company to pay up.

If I'm infirmed enough to need LTC, I doubt I'm going to have the brains or perseverance to dig through the LTC policy to fight with an insurance company when they deny paying for something.

Now if you have some smart kids, who are lawyers and/or good with money, or perhaps a financially savvy spouse who is 10-20 years younger then I think there is reasonable chance that you can hold the insurance companies feet to the fire.

But without a healthcare advocate, it seems dubious that you'll actually get the benefit you think you bought.

The LTC rider that I have is pretty clear on when payments start. They are called ADL’s, Activities of Daily Living and are very common in medical insurance. They involve the ability of the patient to bath or use the bathroom, eat, etc. Once any one of the seven cannot be performed, payments can start.

 

[REWahoo]

The LTC rider that I have is pretty clear on when payments start. They are called ADL’s, Activities of Daily Living and are very common in medical insurance. They involve the ability of the patient to bath or use the bathroom, eat, etc. Once any one of the seven cannot be performed, payments can start.

You said it here:

Devil is in the details I guess.

Who has to certify lack of ADL performance? How is it measured? How is it documented? Does the insurer require their own professional to do the certification? And on and on...

 

[MichaelB]

Who has to certify lack of ADL performance? How is it measured? How is it documented? Does the insurer require their own professional to do the certification? And on and on...

+1

Nords shared details when collecting on the policy for his father. Some insurers make the process very difficult.

 

[audreyh1]

Devil is in the details I guess. Some states have common law marriage rules, some don’t.

Does Medicaid enforce common law marriages if a couple has never filed joint taxes?

 

[pb4uski]

We have decided to self-insure only because I could never get my head around to LTC insurance being an acceptable value proposition... especially considering the risk of increases in premiums and the uncertainty of the claims process.

 

[COcheesehead]

You said it here:


Who has to certify lack of ADL performance? How is it measured? How is it documented? Does the insurer require their own professional to do the certification? And on and on...

It’s all spelled out as to who and how.

 

[COcheesehead]

Does Medicaid enforce common law marriages if a couple has never filed joint taxes?

I am not a lawyer, but my understanding of common law marriage is that it can involve subtleties not as blatant as a joint return.

 

[Dtail]

Devil is in the details I guess. Some states have common law marriage rules, some don’t.

I know FLA is not a common law marriage/state.

 

[imoldernu]

Our experience.

Bought in 1994 from Traveller's insurance which went broke in 1956. Policy went to MetLife, and then to SHIP in Pennsylvania, where it is today. I had recovered from colon cancer and she, from a stroke.

https://www.shipltc.com/

DW cost was $950/yr, mine was $1000/yr.. Now , hers is $1050, and mine $1150. Policy amount $100/day, for three years, which was satisfactory at the time. Since, the company added at-home care for some circumstances. In any case, $36,500 a year off nursing home (our current rate) $78,000/yr.

So far, it looks as if we've spent about $56,000 on our two policies. Only one price rise in 24 years.

Don't know if we'd do it again, but are quite happy with where we are today.

 

[REWahoo]

It’s all spelled out as to who and how.

Yep. And insurance companies never try to complicate, obfuscate, deny, or delay payment of claims.

 

[Fedup]

Our experience.

bought in 1994 from Traveller's insurance which went broke in 1956. ploice went to MetLife, and the to SHIP in Pennsylvania, where it is today.

https://www.shipltc.com/

DW cost was $950/yr, mine was $1000/yr.. Now , hers is $1050, and mine $1150. Policy amount $100/day, which was satisfactory at the time. In anycase, $36,500 a year off nursing home (our current rate) $78,000/yr.

So far, it looks as if we've spent about $56,000 on our two policies. Only one price rise in 24 years.

Don't know if we'd do it again, but are quite happy with where we are today.

It’s not clear to me if you are collecting from LTC yet. Are you still paying premium? When you collect LTC, do you stop paying for premium.

 

[joeea]

We have decided to self-insure only because I could never get my head around to LTC insurance being an acceptable value proposition... especially considering the risk of increases in premiums and the uncertainty of the claims process.

How much have you set aside for LTC use?

 

[imoldernu]

Our experience.

bought in 1994 from Traveller's insurance which went broke in 1956. ploice went to MetLife, and then to SHIP in Pennsylvania, where it is today.

https://www.shipltc.com/

DW cost was $950/yr, mine was $1000/yr.. Now , hers is $1050, and mine $1150. Policy amount $100/day, which was satisfactory at the time. In anycase, $36,500 a year off nursing home (our current rate) $78,000/yr.

So far, it looks as if we've spent about $56,000 on our two policies. Only one price rise in 24 years.

Don't know if we'd do it again, but are quite happy with where we are today.

 

[Brat]

imoldernu, doesn't your policy have a % benefit increase yearly? Ours is 5%.

My Mother purchased one with $100/day payout with no increase. While $36,500 per year for 3 years is nothing to sneeze at it barely put a dent in her needs. She had Parkinson's and broke both of her hips over the years, she spent many more than 3 years in a nursing facility.