How many own LTC insurance?

[youbet]

We do not have LTCi. Our plan is to move to a CCRC in 4-5 years when my spouse will be 80 - 81 and I will be 70 - 71. It may feel early for me but I'm hopeful we will be able to afford an independent cottage on the campus that will still feel like our own home and not an institution.

Be aware that if you or your DW have a "health event" during the 4 - 5 years while you're waiting, you and/or DW may not pass their mental/physical requirements for a Type A plan. You must be totally capable of independent living when you enter.

DW and I are also looking a Type A CCRC's and find picking an entry age to be frustrating. Go in too soon and you might be wishing you were still in your own home and living that lifestyle. Wait too long and have a "health event," and you can't get in except under a Type C plan.

 

[Yipper]

I looked into LTCI ~ age 52. Chose not to buy it because it had already priced itself out of reasonableness. When I added up ~ 20 years of premiums before I was likely to need it, the total in premiums was very close to the maximum amount the policies would have paid out.

Given this reality, we chose to self-insure.

Same here... the numbers just didn't add up. I've made sure the primary house and some other "off book" assets are not part of my retirement calculations in order to self-insure.

 

[madsquopper]

We have Genworth mostly because my spouse is fairly conservative financially and just felt a lot better if we had something like this, particularly after seeing how both sets of parents could have made use of it. Got it in our low 50's so cost at that time seemed reasonable. At this point I'm pretty ambivalent and have been concerned about premium inflation as we've already been through several increase requests.

The last few times I did an analysis of coverage inflation (our policy does have the COLA increase built in) vs how fast the covered healthcare services were actually appreciating in our area. I was a bit surprised that the health costs over time were increasing at a somewhat lower rate than the inflation rider, so I had them reduce the coverage (and premium) to the appropriate level. So although our premium has increased over the original amount, it's not as bad as just taking their standard suggested increase.

 

[RetiredHappy]

I had posted in one of the other threads. I have Genworth LTCI, dirt cheap with high amount of coverage and with inflation rider. I have it for 12 years already without a premium increase todate. I know the increase will come one day, but I really like the policy.

My husband bought a Lincoln hybrid policy in 2016 with 1 lump sum payment.

We are both glad that we have our policies.

 

[RetireeRobert]

I am considering a policy like this through One America . We would probably pay the full amt up front and receive a discount on the price. I can’t see too many downsides.

We are not concerned with a large payout from the death benefit to our heirs since we don’t have kids. We would be willing to take a lesser amt or forgo the payout altogether if we could get a lower upfront price. The policy has the chassis of a life insurance policy so I recognize that this is probably wishful thinking.

As far as I can tell the company is stable . I am having trouble pulling the trigger for some reason. We would move $150,000 from the IRA to fund it ( no tax implications)and be eligible for a $5729/mth benefit lifetime benefit each for me and my spouse. Any thoughts on this would be appreciated.

State Life/One America is also the carrier for my policy. It is AA- rated by S & P for financial strength.

You mention no kids to benefit from the life insurance, and that (to me) is "one" of the big benefits of this particular hybrid type.

However, the ability to insure both spouses under one joint policy, like One America's hybrid policy, was a larger deciding factor for me.

Also, from scanning ltcpartners webpage (which has much helpful info on One America hybrids), I did see One America is offering up to 20% credit for paying "from IRA" accounts as you mentioned you plan to do. That credit was not available when I bought my policy (dang it). That credit alone may offset the lack of your ability to benefit heirs with the life insurance death benefit.

Brainstorming: Could you perhaps assign the death benefits from this policy to some charity which sometimes offer annuity payments to donor's who assign life insurance proceeds (or other assets) to the charity upon donor's death? Maybe there is someway you can get some benefit out of One America hybrid death benefits--even though you have no heirs?

 

[mystang52]

OP: Do some research, and do your best to find a good insurance broker. DW and I have LTC policies with John Hancock; it's been about 10 years now. Cost is not cheap. To this day, I honestly don't know if we made the right decision in getting the coverage. In my case, though, DW was insistent on getting it so the decision was already made. I can see arguments pro and con; you need to make your own decision that you're comfortable with.

 

[Golden sunsets]

We bought Prudential LTC policies in 2008. With the 5% inflation escalator, the daily rate is now $313 and a current bucket amount of $450,000 for each of us. The 3rd round of increases were instituted earlier this year and because our daily rate seemed to be rising faster than local prices, we elected to reduce the cola going forward to 2.6%. Doing that keeps the premium the same with no increase for a minimum of 3 years. It's expensive and looking at our NW now we could have elected to self insure. Having the policies though provides a good deal of peace of mind. Each of us had one parent who needed care, so we had that history as well.

 

[youbet]

I am curious about how many folks have bought LTC insurance in retirement?
And at what age?

Since you asked about what age folks bought LTC policies, I'll mention that while it's interesting to know what folks did historically and to hear the fortunate stories about folks who got good deals years ago, you should really focus on what is available today.

Almost any financial product will have anecdotal examples of success. Even the dreaded variable annuities have examples where they worked out well for some folks. Whether you choose to self-insure, go into a CCRC with a Type A plan, buy a single premium hybrid policy or traditional LTCI, keep in mind that all these products have been changing over time and focus on what they look like today.

 

[dingo]

LTC options

State Life/One America is also the carrier for my policy. It is AA- rated by S & P for financial strength.

You mention no kids to benefit from the life insurance, and that (to me) is "one" of the big benefits of this particular hybrid type.

However, the ability to insure both spouses under one joint policy, like One America's hybrid policy, was a larger deciding factor for me.

Also, from scanning ltcpartners webpage (which has much helpful info on One America hybrids), I did see One America is offering up to 20% credit for paying "from IRA" accounts as you mentioned you plan to do. That credit was not available when I bought my policy (dang it). That credit alone may offset the lack of your ability to benefit heirs with the life insurance death benefit.

Brainstorming: Could you perhaps assign the death benefits from this policy to some charity which sometimes offer annuity payments to donor's who assign life insurance proceeds (or other assets) to the charity upon donor's death? Maybe there is someway you can get some benefit out of One America hybrid death benefits--even though you have no heirs?

Thanks tor the input. I had not considered the charity angle and will look into it . Having the ability to lock into a fixed price and cover both of us will probably be the overwhelming factor to go with them. It will certainly give us a good base coverage that we could supplement with other sources.

The discount is $30,000 to pay in a lump sum which is the way I would proceed. I am so naive concerning these matters and just needed to hear from someone that has been down this road.

 

[RetiredHappy]

To add to my earlier post, I got mine at 46 and my husband got his at 68. We have 2 excellent policies and having been on the provider end, having LTCI is the best thing we could do for ourselves.

 

[syd03]

We purchased a single premium LTC policy through NGL four years ago (when I was 50 and DW was 47)-so paid up. Inflation rider built in, will pay 70% of cost for 3 years stay for each w/90 day elimination period. Home health option also included. We both retired last Dec.

While LTC insurance is certainly a personal choice, with many pros and cons, we wouldn't have entered retirement without it. Too many situations with family members and friends over the last 15 years to reflect upon. Our experience is that those that carried LTC insurance had a much easier time securing quality care in a good facility, even in cases where their policy was mediocre at best. It also seems that many of those we know who opted to self fund LTC didn't allocate enough $. Particularly if Alzheimer's enters the equation. Yes, the average nursing home stay may be relatively brief, but certainly not always.

Again, there are negatives to purchasing LTC policies. For us the positives, including piece of mind, outweighed the negatives. ymmv

 

[Romer]

My Dad had LTC and he was in a facility for a while. It paid $150 a day. I looked at prices for policies and what they cover. It just didnt seem worth it to me personally. Obviously the more coverage the more the cost

I feel I can cover those costs so decided against it

 

[38Chevy454]

No LTC insurance, self insuring for that.

 

[youbet]

Our experience is that those that carried LTC insurance had a much easier time securing quality care in a good facility, even in cases where their policy was mediocre at best.

Interesting tidbit syd03. At first glance, the idea that a mediocre LTC policy would be looked at more favorably by a care provider that cash coming from a well funded "self-insured" stash seems to not pass the common sense test. I wonder why that is? I'd think that someone who is conservatively self-insured and would be paying cash would be welcomed by good facilities.

It also seems that many of those we know who opted to self fund LTC didn't allocate enough $.

That really doesn't matter. Only what you personally would have done has any bearing on the matter. Or are you saying that you didn't trust yourself to plan and execute a self-funding scheme?

 

[Koolau]

For us at least, the "LTCi or self insure" decision was not binary. As I alluded above, we approached LTC insurance similar to how we view term life.

We took out our LTCi policies at age 50 when the possibility needing the insurance in the short run was slight, but the risk to our long-term financial health could have been severe. As the premiums increased over time we reached a point where, due to decreasing life spans and an increasing nest egg, we could self insure. But rather than cancel, we opted to eliminate the 5% inflation rider and keep the insurance, locking in our benefits at $267/day. This reduced our premiums substantially, back to near the level they were when we took out the policies more than 20 years ago.

YMMV

This sounds like a good approach. We'll keep it in mind should our premiums go up a second time.

Here is our current thinking on LTCi. Since we have it, we plan to keep it. We CAN afford the premiums (and probably could even if they went up substantially.) LTC is one of the few black swans (in addition to run away inflation) that we believe could derail our FIRE plan. With the concept that "you only need to insure for what you can't afford" we decided to stay with our insurance. After all, two folks in LTC at (currently) $10k/month EACH is one of the few things which could derail us even with our substantial savings. Add to this that we both have significant health issues, it's just possible we will "win" the bet with the insurance company. I hope not! YMMV

 

[Dalmore]

My experience with LTC has not been great.

DW and I signed up for CalPers policy while we were in our 40s. They wanted $2,200 per year for the two of us - as I recall, it gave $100/day and capped at $150K each. They said the prices would never change. After two years, the price went up or the payout went down, my choice. The next year, we got the same notice. Year 5 I cancelled it, because they were dropping the payout again. Since then, we decided to self-insure, and have $300K+ set aside for this.

In-Laws, have kept their plan. $200/day up to $300K each. It cost them about $3,100 per year. The original insurer went bankrupt, and now it is handled by a new provider. The biggest problem we have run into is they get to decide "how much care" you actually need. So they only pay out $x dollars per hour, up to $200/day. They also get to decide what qualifies for reimbursement. Long story short, they are currently paying out $150K per year, but only getting reimbursed for $20K. Some of that is their own doing, but my point is that there are a lot of care costs that aren't covered by insurance, whereas if you can do the self insurance, you can spend the money how you see fit.

 

[Koolau]

My experience with LTC has not been great.

DW and I signed up for CalPers policy while we were in our 40s. They wanted $2,200 per year for the two of us - as I recall, it gave $100/day and capped at $150K each. They said the prices would never change. After two years, the price went up or the payout went down, my choice. The next year, we got the same notice. Year 5 I cancelled it, because they were dropping the payout again. Since then, we decided to self-insure, and have $300K+ set aside for this.

In-Laws, have kept their plan. $200/day up to $300K each. It cost them about $3,100 per year. The original insurer went bankrupt, and now it is handled by a new provider. The biggest problem we have run into is they get to decide "how much care" you actually need. So they only pay out $x dollars per hour, up to $200/day. They also get to decide what qualifies for reimbursement. Long story short, they are currently paying out $150K per year, but only getting reimbursed for $20K. Some of that is their own doing, but my point is that there are a lot of care costs that aren't covered by insurance, whereas if you can do the self insurance, you can spend the money how you see fit.

I'm sure you are accurate in your experiences. Our policy (and I think most LTCi) is set up to either cover or not - two functions of daily life must be compromised. If it covers, it's so much per day. Ours has an inflation rider and IIRC coverage lasts for 4 years. Obviously, yours is structured differently. I'm sorry you have had a bad experience. Once again, I am attempting to cover what would possibly destroy our FIRE plan. I certainly hope we don't need it.

 

[RetireeRobert]

Thanks tor the input. I had not considered the charity angle and will look into it . Having the ability to lock into a fixed price and cover both of us will probably be the overwhelming factor to go with them. It will certainly give us a good base coverage that we could supplement with other sources.

The discount is $30,000 to pay in a lump sum which is the way I would proceed. I am so naive concerning these matters and just needed to hear from someone that has been down this road.

Dingo, I would suggest you talk to a broker who handles not only One America hybrids, but also other LTC products and companies. Explain you have no heir to benefit from the life insurance death benefit, and your concerns whether you might get better coverage on the LTC side without worrying about death benefit. Perhaps OneAmerica has ways to handle that particular issue. Or perhaps your broker can suggest other products that would benefit you better on the LTC side. (One broker who is knowledgeable is at ltcpartners).

 

[Dtail]

My experience with LTC has not been great.

DW and I signed up for CalPers policy while we were in our 40s. They wanted $2,200 per year for the two of us - as I recall, it gave $100/day and capped at $150K each. They said the prices would never change. After two years, the price went up or the payout went down, my choice. The next year, we got the same notice. Year 5 I cancelled it, because they were dropping the payout again. Since then, we decided to self-insure, and have $300K+ set aside for this.

In-Laws, have kept their plan. $200/day up to $300K each. It cost them about $3,100 per year. The original insurer went bankrupt, and now it is handled by a new provider. The biggest problem we have run into is they get to decide "how much care" you actually need. So they only pay out $x dollars per hour, up to $200/day. They also get to decide what qualifies for reimbursement. Long story short, they are currently paying out $150K per year, but only getting reimbursed for $20K. Some of that is their own doing, but my point is that there are a lot of care costs that aren't covered by insurance, whereas if you can do the self insurance, you can spend the money how you see fit.

Yup, my father has 2 LTC policies and is still paying out over 100k net yearly.

 

[syd03]

Interesting tidbit syd03. At first glance, the idea that a mediocre LTC policy would be looked at more favorably by a care provider that cash coming from a well funded "self-insured" stash seems to not pass the common sense test. I wonder why that is? I'd think that someone who is conservatively self-insured and would be paying cash would be welcomed by good facilities.

You're correct, it doesn't pass the common sense test. Unfortunately we've seen it first hand on three occasions now.


That really doesn't matter. Only what you personally would have done has any bearing on the matter. Or are you saying that you didn't trust yourself to plan and execute a self-funding scheme?

No, what I'm saying is that the cost of a private room in my state is currently $135K per year. If you are 50 now and in need of care at age 90 the annual cost will be significantly more. If you happen to spend a couple years in a home, more yet. Had an uncle who planned to self insure three years ago with $130K earmarked. His thought process was that he'd never be in a home more than 6 months if at all. He ended up in a home for a little over 2.2 years. In year two he was forced to downgrade to a home I wouldn't want to spend a week in.

All I was trying to advocate is to plan accordingly, and I'm sure most forum members do. We could self insure, but I'd rather pass that money down. The way I look at it is that I paid a small fraction for a single premium policy of what even a year in nursing home would cost now, let alone 30 or 40 years from now. I feel comfortable knowing that coverage will be there. Again, every one has a different take. I'm sure you planned accordingly, but perhaps not every member here has.

 

[friar1610]

I bought into the Federal Government’s Long-Term Care Partners plan at age 58 or 59 when eligibility was extended to military retirees. There have been two rate increases since then. There was also an option to keep payments level but reduce or forego the built-in inflation increases going forward. You could also leave the plan and have all premiums thus far paid refunded. I opted to reduce/forego inflation increases. I am 76 now and neither my wife nor I have needed the insurance, for which I’m very thankful.

 

[skyking1]

We are not LTC nor life insurance customers.

 

[capjak]

I am considering a policy like this through One America . We would probably pay the full amt up front and receive a discount on the price. I can’t see too many downsides.

We are not concerned with a large payout from the death benefit to our heirs since we don’t have kids. We would be willing to take a lesser amt or forgo the payout altogether if we could get a lower upfront price. The policy has the chassis of a life insurance policy so I recognize that this is probably wishful thinking.

As far as I can tell the company is stable . I am having trouble pulling the trigger for some reason. We would move $150,000 from the IRA to fund it ( no tax implications)and be eligible for a $5729/mth benefit lifetime benefit each for me and my spouse. Any thoughts on this would be appreciated.

I purchased a One America Policy with accelerator and 3% inflation rider. I think the 20 year pay vs everything upfront may be good for flexibility as if things change (for example: government funded LTC, etc...) over those 20 years you can cancel the rider. There are some other interesting options similar to One America that have cash reimbursement model so do not need to show any receipts for home care and third party care.

 

[capjak]

My mom spent 6 years in assisted living and 6 months in nursing home that made me look into LTCi. The biggest risk is going in at a young age or needing nursing care for a long time.

 

[Golden sunsets]

I also wanted to mention that our policy covers in home care payouts. Our agent mentioned that for those who need LTC, but who haven't purchased it, it is common to see wives, whose husbands need the care providing the care themselves often with debilitating effects, in order to conserve funds.