How many own LTC insurance?

[Brat]

We have a paid-up-in 10 years policy that is no longer offered. Husband had both of his knees replaced in the same surgery several years ago, our insurance sent a PT to our home for a couple of weeks. I notified our long-term care insurer, they counted all those days against his elimination period.

Bottom line: any time you need home care (not from a family member) submit the paperwork to nibble away at your elimination period. Be sure to work with the discharge planner if you are in the hospital to arrange for a caregiver and have your insurer's paperwork in hand to check off those ADLs (activities of daily living) so that filing goes smoothly.

 

[Jeb-NY]

Self insured, primarily after seeing my Mother fight the system for years. Both parents paid into a plan for over 30 years. I don't know what it started at but toward the end it was around $4k for the two of them. Only my Dad's policy paid out anything. He had a couple of short stays in nursing homes for rehab after strokes. My Mother took care of him at home for over 20 years no matter how much we tried to get her to use the insurance towards the end when he was really bad. When she tried to get them to pay for some part time home care they said it had to be a licensed care giver even though for help she needed was being taken care of by a friend for a fraction of what she would pay over what they would cover. She finally dug out the original contracts and read them parts that said nothing about licensed. It took awhile but they started paying and gave her a large check for some of what they cheated her out of. She was then able to give a raise to the woman that had been helping her.

We just put more into our retirement savings and hoped we would not have any early problems. We made it and will have no problem paying our way if we need it and if we don't more for our son to inherit and worry about spending.

 

[Scuba]

The reimbursement rate is the daily or monthly amount payable per the bought policy. It goes back to my point that even policy holders have no clue how expensive LTC can be. The facilities can balance bill the patients for the shortfall. However, many people cannot afford to pay the balance.

This is exactly why our facilities often didn’t take LTCI patients unless the insurance reimbursement rate was decent.

 

[meleana]

Not us.

 

[NoEZmoney]

One of my aunts had a LTC policy she paid in over 30 years and premiums kept adjusting each year as she got older. When she needed it, she only lived for less than a year and there was no inheritance balance to pass on to heirs. My brother and I calculated she paid lower $120K range for less than $30K in payout. She had a nice nestegg so she could have paid OOP and had invested the premium. Thing a social worker told me was most folks who need acute nursing home care are at end of life stage and rarely need more than 2 years care. Most "check out" in less than 6 months but YMMV.

 

[JJpop]

My wife and I have had Genworth for almost 10 years.
We have a good policy with a COLA that they were selling then. We will be 70 and 72 in a few months and are paying about $4800 for the 2 of us.

The rates have gone up the last couple years. From what I have seen I guess our premium is still reasonable.

 

[JohnRM]

Forced LTC insurance

Here in Washington state, they are forcing people to get LTC insurance, it is taken out of people's paychecks, unless you buy it elsewhere and there is a time limit for that. I don't know all the details, but I am retired and I don't get any paychecks. I hope it won't be taken from my pension, it's not a lot but I don't want it. Nobody has notified me from the company pension office, that's a good sign.



I read somewhere that the people working on the dementia problem figure if they can push the average onset out by five years, they can prevent a third of the cases. I guess that would give you time to die of something else instead?



Anyway, I am gambling that any time I spend in a nursing home will be offset by the money I saved by not buying the insurance, and investing that money instead. You know the insurance companies have the odds in their favor for not having to pay out. And the state-run insurance, since when have they been able to do anything efficiently.

 

[2177V]

I always believed that LTC insurance is not cost effective because (1) If you died suddenly, the money you paid into the system may be wasted. (2) the benefits have a cap in paying out. For example a $1400 premiums a year May have a payout cap of $160K. Nursing care cost $10K a month so the coverage is only good for about 16 months or so. (3) the premiums may increase as you get older. (4) there are numerous restrictions in the policy and I heard from many other people that they regretted getting the policy.

There are other alternatives: (1) Married someone 20 years younger (I actually did this…but my original motivation was not LTC). (2) Move to a low COL area such as Mexico or Thailand where health cost is 1/3 of US. I personally cannot afford $10K a month but I can afford $3.3K a month. This can avoid buying LTC insurance. (3) some churches have a community home to care for disabled church members and the cost is much lower than private nursing homes because they are non-profit. (4) Get an unemployed or retired relative to agree to become a care taker but you should provide a financial incentive. (5) hire a live-in nurse. The cost can vary depending on the level of care needed. You allow them to live in an extra bedroom or an in-law unit which can reduce the cost. I am in the process of constructing an separate in-law unit on my property with its own separate bathroom and kitchen. This gives me the option of hiring a live-in maid, a live-in care taker for LTC or rent the unit for income.

 

[Koolau]

This is exactly why our facilities often didn’t take LTCI patients unless the insurance reimbursement rate was decent.

I'm not certain I understand. My mom's LTCi payments went to her (to me, in reality as I was her POA). I paid her NH bills. Her LTCi payments were insufficient to cover her monthly NH bills so I had to add from her assets. The NH wasn't aware of where the payments were coming from. YMMV

 

[JJpop]

My brother passed almost 2 years ago. He was single and collected about 350,000 in payments for his at home live in care from Genworth.
I would guess he paid less than 30,000 in premiums before his benefits kicked in.

 

[RetiredHappy]

I'm not certain I understand. My mom's LTCi payments went to her (to me, in reality as I was her POA). I paid her NH bills. Her LTCi payments were insufficient to cover her monthly NH bills so I had to add from her assets. The NH wasn't aware of where the payments were coming from. YMMV

+1

 

[RetiredHappy]

My annual premium is $1.1K and currently pays $513K lifetime, increasing at 3% per year. I have paid $14K todate over 12 years. The math is that if I need to use LTCI, the benefits are far more than what have been paid in.

 

[JJpop]

My annual premium is $1.1K and currently pays $513K lifetime, increasing at 3% per year. I have paid $14K todate over 12 years. The math is that if I need to use LTCI, the benefits are far more than what have been paid in.

That sounds too good to be true.
Be ready for a huge increase.

 

[RetiredHappy]

That sounds too good to be true.
Be ready for a huge increase.

We shall see. It is Genworth AARP group policy.

 

[RetireeRobert]

I always believed that LTC insurance is not cost effective because
(1) If you died suddenly, the money you paid into the system may be wasted.
(3) the premiums may increase as you get older.

Hybrid LTC/whole Life solves those two problems.

With the whole Life Insurance feature of hybrids, if you never use (or don't use all) the LTC benefits, your heirs get a multiple of your single premium as death benefit life insurance. Hence the premium you paid is "not" wasted" (if one looks at insurance premiums that way---like I do for LTC)

With single premium pay (or 10 or 20 year pay), cost is locked, premium can never increase, nor contracted coverage decrease.

 

[RetiredHappy]

Hybrid LTC/whole Life solves those two problems.

With the whole Life Insurance feature of hybrids, if you never use (or don't use all)the LTC benefits, your heirs get a multiple of your single premium as death benefit life insurance. Hence the premium you paid is "not" wasted" (if one looks at insurance premiums that way---like I do for LTC)

With single premium pay (or 10 or 20 year pay), cost is locked, premium can never increase, nor contracted coverage decrease.

+1

 

[Koolau]

That sounds too good to be true.
Be ready for a huge increase.

Once again, I'll point out that any increases must be approved by the appropriate regulating agency. Not to say it doesn't happen - our premiums were raised. But the point is that companies can't simply decide they aren't making enough money and then raise rates. Someone is looking over their shoulder - if that gives any additional confidence in the fairness of increases.

My understanding from my research when our rates were raised: Insurance companies are good at predicting how much of their products will be used. This is true for death benefits and for users of LTC. Where the LTCi companies missed the mark was in "guessing" how many folks would pay in for several years and then drop out. Turns out folks held onto their policies in excess of predictions. I would like to think that those purchasing recently would not face huge increases as the LTCi companies now know what to expect. Of course, YMMV.

 

[Scuba]

I'm not certain I understand. My mom's LTCi payments went to her (to me, in reality as I was her POA). I paid her NH bills. Her LTCi payments were insufficient to cover her monthly NH bills so I had to add from her assets. The NH wasn't aware of where the payments were coming from. YMMV

Many don’t have enough assets to add enough such that the nursing home can make enough money to care for the patient. If the insurance company has a low reimbursement rate and the patient can’t supplement it sufficiently, the NH may not take them. So LTCI can be helpful as a partial solution for those who can’t or prefer not to self-insure, but likely most people will have to at least partly self-insure to get good quality care.

 

[street]

All insurances are a gamble in my opinion. I think of health insurance and I haven't hardly used it at all in my life time, but yes I have it. I could be money ahead if I never had the insurance and paid out of pocket. I also wouldn't have gambled on that.

I would say, other then health insurance as out of pocket insured, that nursing home expenses with be the second highest expense a person can have if they have to ever go into a nursing home.
My parents each spent 5 years in a facility and the LTCI was huge for them.

 

[KarenF]

We have a policy through Mutual of Omaha. It is good coverage and not too expensive (about $1500/year for my husband and $2000/year for me. We got it when we were 59. I think the key is to get it when you are still healthy. My Mom had dementia so I had to go through a mental test. We really debated self insuring but decided that LTC was worth it, barely. If we need it, it will pay out very well for several years. I hope, like with any insurance, that we will never need it.

 

[Koolau]

Many don’t have enough assets to add enough such that the nursing home can make enough money to care for the patient. If the insurance company has a low reimbursement rate and the patient can’t supplement it sufficiently, the NH may not take them. So LTCI can be helpful as a partial solution for those who can’t or prefer not to self-insure, but likely most people will have to at least partly self-insure to get good quality care.

Thanks for the insight.

It's been too long but I don't recall the NH requiring a financial evaluation for my mom. Perhaps they did. In any case, mom DID run out of money - the month she passed. I still give thanks that we never had to deal with Medicade or other NH financing.

 

[frances]

My parents bought LTC insurance in the mid-90's if I remember correctly. Paid in every month and premiums increased. Sorry, don't have those numbers.
Their policies were/are policies that, once a claim was started and the elimination period satisfied the premiums stop and the payout is until either the claim is stopped or death of said claimant.
Dad's claim was active for about 6 years. Annual payout was about $55k on average. He passed from complications of dementia/diabetes in 2013.
Mom started her claim in 2014. She is legally blind, has a pacemaker, bad knees, and some other issues that require her to have some help. Had been in Assisted Living (3 years there after some surgeries) up until last April but is back at her condo now. The lockdown was HORRIBLE so with her improved health she and I made the decision to move her back to her condo with caregivers and cameras in her home. So far so good.
Mom's average payout from the policy when she was in AL was just over $52k. Her total payout on the claim to date is just over $200k. That would have wiped her out unfortunately, so having the policies for her and dad has been a godsend.
She, to my knowledge, was never given an option to eliminate any annual increase, so her policy's payout goes up each October by 5% (is compounded, so that's nice). Policy pays on a daily basis and she's currently at $220.45. Not quite enough should she need a nursing home or a live-in, but more than enough for her current needs.
We're currently averaging about $700/week (that's CHEAP) for caregiver help and - knock wood - that's plenty right now.
HOWEVER, I live less than 2 miles from her and do quite a bit of fill-in with whatever she needs. It can be stressful at times, but it's been much better all around (ALs for the most part aren't what's advertised, at least not around here....)
AL/nursing home costs are increasing each and every day. Help is hard to find everywhere for all industries, of course driving the costs of everything up. When we were searching for in-home care (mom's policy requires state licensed companies to provide caregivers) most companies wanted $26+/hour for their caregivers. We found one for $20/hour, but of course we've had several bumps in our road with them. Fingers crossed that we have a great caregiver at this point (it's been about 6 weeks and so far so good).
I wish I had purchased a policy like mom's years ago, but in the 90's I was in my 30's - it seemed a little dumb/paranoid to have done so then but now....
And as far as dropping the 5% increase - I personally would keep it and decide the extra expense is worth it. But that's just me.

 

[jayanu]

I believe the majority of people pass without being able to collect anything.

.

According to Genworth and US Govt - 70% will need some LTC - in-home, assisted living, nursing home, or dementia ward.

 

[jayanu]

If I paid for the policy for 25 years I would have around 40K in premiums that would be the cost for about 6 months in a nursing home.

80K/year per person is possibly in Louisana but higher everywhere else and rising at ~6%/year. Look at Genworth's calculator.

 

[jayanu]

I'm still young but do not plan to but I'll adjust course throughout my retirement. My reasoning is that my likelihood of a long stay is low and the probability of my portfolio growing over the next few decades is pretty high (well under 3% WDR) which should cover my needs. I'll also have home equity I could tap if needed. Additionally, I wouldn't be surprised if there are not legislative changes/single payer schemes put in place by the time I get to the age I'd likely need LTC.

If you can predict the likelihood of long-stay as low then you are a genius!
The average is about 3 years. You should look at the Genworth calculator and the projection of the cost to decide how much money you would need.