Long-term care insurance

[rmbuehler68]

We are a couple in our mid 50's and thinking that long term care insurance is something at least worth looking at more closely. Both of our parents had memory/dementia issues. For those of you with long-term care insurance, how did you come up with a short-list of providers for quotes? How did you evaluate various options? What provider did you ultimately select? And any key points that you feel are important for this decision?

Thanks in advance for your insights on this topic.

 

[Mr_Pink]

I don't have LTC insurance, DW and I are self-insuring. My father used LTCI from State Farm. He was in Assisted Living and relegated to using a wheelchair for 2 years before we could get doctors to sign-off on the LTC requirements. When he passed 2 years later, about half of the $165K that the LTCI would have paid went unused. Later, during probate, an insurance agent told me that one could obtain a rider to re-coup the leftover money, or something like that. Worth checking, maybe.

 

[Dash man]

We got our LTC through my former employer. It includes assisted living, LTC and in home care. We’ve had it since 2000. It pays for five years up to $1M. I doubt you could find anything like it today.

 

[Lewis Clark]

Every LTCI policy I have seen would pay a maximum daily dollar amount for a limited number of days, and would therefore pay out a maximum dollar amount to me ... IF I needed it and IF the insurance company would actually cough up the cash. For the policies I looked at, the maximum payout amount was on the order of $250,000 - $400,000.

I've heard many stories from friends and family about insurance companies that balk at paying legitimate LTCI claims. My father had a policy, and used it, and his insurance company paid as promised. That was a good LTCI experience.

I looked at the premiums against the maximum payout amount to see if I thought the insurance was worth it. For us, the answer was no and we are self insuring for long term care.

 

[Koolau]

Every LTCI policy I have seen would pay a maximum daily dollar amount for a limited number of days, and would therefore pay out a maximum dollar amount to me ... IF I needed it and IF the insurance company would actually cough up the cash. For the policies I looked at, the maximum payout amount was on the order of $250,000 - $400,000.

I've heard many stories from friends and family about insurance companies that balk at paying legitimate LTCI claims. My father had a policy, and used it, and his insurance company paid as promised. That was a good LTCI experience.

I looked at the premiums against the maximum payout amount to see if I thought the insurance was worth it. For us, the answer was no and we are self insuring for long term care.

Yeah, my mom had good service from her LTCi company - and no, I don't recall the name. But at least one of our members has shared how difficult it was to get her mother's LTCi to pay up for obviously legitimate Long Term Care expenses.

I'd suggest lots of research - especially on satisfaction with the product(s).

DW and I have had LTCi for 25 years. Haven't needed it yet (thank God)! They have raised the costs twice since we took out the policies.

 

[ziggy29]

LTCI is a product that I wish I felt was reliable, but the goalposts have been moved too many times on existing policyholders who were originally told they could "lock in a low rate while they are young and healthy" only to be told later they need to pay massive premium increases or accept a much lower benefit.

We are mostly self insuring at this time (and praying a little bit). It worked well for my parents when my dad had cancer, but that was 20+ years ago and they were never socked with rate increases.

 

[RetiredHappy]

I bought my LTCI policy after we started our elder care business. At that time, the largest LTCI company that processed and paid out the most was Genworth. Group plans are generally cheaper and I bought mine through AARP back then and Genworth happened to be their partner carrier. My coverage is very inexpensive even though they have raised rates on me 3 times since I bought 17 years ago. My coverage is about $10K a month currently with a 3% inflation rider each year, and covers up to the maximum amount for 5 years, and it goes up accordingly with the 3% inflation rider. If I use half the amount each year, the coverage goes to 10 years, etc. I have a 90-day waiting period and my premiums are now $1.5K a year, after 3 increases.

With our elder care business, LTCI reimbursements made up half our revenue which were in 7 figures ever year. We had no issues dealing with LTC insurers and their requirements and helping our clients cross the "t"s and dot the "i"s to ensure that their policies would pay up.

My husband could not pass underwriting when I bought mine but managed to buy a hybrid policy after we retired. That gave us peace of mind, even though we can self-insure. We have seen the difference in mindset in getting help/care for someone with and without a LTCI policy and we do not want to be trapped into the mindset of being unwilling to spend money on our care when we need because we do not have "someone else" paying for our care.

 

[Ready]

We had a terrible experience with LTC insurance for MIL. They denied her claims even though it was evident she could not take care of herself. So we ended up paying for assisted living out of pocket. The problem with these policies is they have a lot of leeway to deny claims, and they can keep raising rates each year. I think they are mostly a complete rip off, especially for those who can self insure.

 

[RetiredHappy]

We had a terrible experience with LTC insurance for MIL. They denied her claims even though it was evident she could not take care of herself. So we ended up paying for assisted living out of pocket. The problem with these policies is they have a lot of leeway to deny claims, and they can keep raising rates each year. I think they are mostly a complete rip off, especially for those who can self insure.

Who is the carrier?

 

[Delawaredave5]

I think only about 25% of Americans spend any time in a nursing home and only 10% of those spend more than 2 years. Median home around $100k/year (yes higher a lot of places).

So there's a 75% chance your nursing home costs will be zero and a 98% chance your costs will be $200k or less.

Given the costs of the policies, how much they change, and the stipulations, self insure seems OK right now.

 

[kilgore]

Yes. Wife and I have LTC since turn of the century. For us it was a simple exercise in adverse selection after one look at respective family histories. Our premiums are locked in.

More accurate if those who say "self-insure" say self pay. A "risk" pool one is NOT insurance.

 

[Pellice]

I bought a standard LTC (not hybrid) at age 57. It was somewhat unusual in that it had a built in premium (step) increase every year, with a corresponding increase in payouts that should easily cover inflation. Perhaps due to this increase's being built in, I have never had any additional premium increase. The more usual flat rate was available, but I opted for the step-increase, even though knowing that eventually that premium and its cumulative payments would surpass that of the flat rate - IF that flat rate never increased, which I do not know. I am not sure it was the wiser choice, though. I can "freeze" both payments and benefits at a given year's rates at any point, which I may do at some future time.

What I like about the policy is that it would be paid out to me, not to a facility, and that it is available as a "pool" of money that can be extended for as many years as it lasts. It can be used for a variety of purposes, including household services and even paying a relative for care, so long as I gain approval for disbursement of the funds.

Given that I am single with no children, and not wealthy enough to self-insure, I felt that LTC insurance when combined with social security, my retirement income, and potentially my real estate (house), would give me pretty much my choice of facilities and rooming arrangements. It would also combine with other income to pay for assisted living if I met the qualifications. A potential issue would be needing assisted living without qualifying for the LTC to kick in, which could consume vast amounts of cash.

Having the LTC insurance has been a great reassurance to me, and helps me feel that I have done my part to make it easy for my relatives with whom I am close to assist me in the future.

 

[athena53]

More accurate if those who say "self-insure" say self pay. A "risk" pool one is NOT insurance.

Well, I suppose you're right and I was in the business. I still think of myself as "self-insured" for LTC because I am not buying insurance for it and I have the resources to pay for it if needed. A lot of people who describe themselves as "self-insuring" against a particular risk are really just saving the premiums and hoping nothing happens.

My scenario is simpler since I'm not married. The scary scenario of one person living in the house and one in LTC makes LTC insurance a good choice for married couples.

 

[akck]

You might look at this thread for information about the need for LTCi:

Do 70% of Retirees Need Long-Term Care?

I came across this video addressing this issue a few weeks ago while traveling, hence the late posting: The short answer is no. She first explains the makeup of the 70% includes all forms of assistance, including temporary support. She then shows that only about 5% of retirees end up in...

www.early-retirement.org

We have insurance through our former employer’s pension plan, so it’s not an option. Being a group plan made it an easy choice as it wasn’t cost prohibitive and so far, premiums haven’t increased.

 

[kingle]

We are a couple in our mid 50's and thinking that long term care insurance is something at least worth looking at more closely. Both of our parents had memory/dementia issues. For those of you with long-term care insurance, how did you come up with a short-list of providers for quotes? How did you evaluate various options? What provider did you ultimately select? And any key points that you feel are important for this decision?

Thanks in advance for your insights on this topic.

My wife and I are 70 now. No LTC insurance. I looked at it - too expensive - might as well self-fund. Very few players left in market. No guaranty whoever you choose stays in the market. No control on premium cost in most cases.

I do a have a joint annuity that pays 150% benefit if LTC event and 2x on individual policy. American Equity.
So... you get guaranteed annuity benefit once you start collecting and 1.5-2x benefit if LTC event and no caps on payment amount as long as you live. It will only pay the initial enhanced LTC benefit if there's cash value. Once it is paying - it continues to pay as long as you still have condition and are still with us. There are other annuities like this. I found all of the LTC policies I looked at capped benefits and if you're disciplined enough - just investing the premiums goes a long way into coverage. At the end of the day - you're paying a lot for a little.

A lot of people rather than buying straight up LTC insurance - buy hybrids - life insurance or annuities with LTC riders.

 

[Koolau]

A lot of people rather than buying straight up LTC insurance - buy hybrids - life insurance or annuities with LTC riders.

Megacorp got in bed with (excuse me - allowed an insurance company to handle employee's life insurance). One policy - which I bought - ca 1990 was a whole life policy that had a rider that the policy could also pay out for either of us (DW or I) if we needed to go into a nursing facility. Sounded pretty good. At that time, monthly expenses in a nursing home were on the order of $2K/month or less. So $50K would cover a couple of years (right?). Wrong. Now, that $50K which is still in force would cover (wait for it) Almost 4 months IF there were no additional incidentals (like adult diapers and meds in blister packs, etc.).

 

[sdawson]

Should I continue paying for LTC?

My situation: DW is older than me and has some chronic health issues which limit her activities and mobility and not expected to go away, but not a life shortening prognosis, while I am doing fine. It would be difficult for her to live on her own, and certainly not in our current house. What...

www.early-retirement.org

Every scenario is different. But the above has the math on why I decided to self fund. Other's mileage may vary of course.

An update to that logic, is that I purchased the max QLAC (out of my 401K dollars) last fall (at age 62). The QLAC is part of the LTC planning. I went that route rather than LTC insurance for many reasons -- including that I control the funds (i don't need insurance compaby permission), the dollars are usable for either my wife or I, there is flexibility in the actual payout date (nominally age 78, but can be moved up to as early as 75, or delayed up to age 85), if my wife and I pass before using the paid premium, the balance is refunded to the kids. While the QLAC payout would not cover the entire cost of LTC, it is part of the planning.

 

[Jheroine]

I let my LTC policy with Genworth lapse in July 2025 due to them once again increasing the premiums by a massive amount. I have decided to self insure. A surprise I found out was that I do get to use the premiums I've paid for when and if I do need it in the future, about $42K. In the meantime, they get to keep that money and make money from it. Better than nothing I guess.

 

[Montecfo]

LTC insurance is very expensive and can be repriced as you go. Most people don't collect on them for a variety of reasons.

I would use a life insurance product. Then at least you know you are not throwing money away.

Full disclosure: we self insure.

 

[Spock]

I think only about 25% of Americans spend any time in a nursing home and only 10% of those spend more than 2 years. Median home around $100k/year (yes higher a lot of places).

So there's a 75% chance your nursing home costs will be zero and a 98% chance your costs will be $200k or less.

Given the costs of the policies, how much they change, and the stipulations, self insure seems OK right now.

there is a lot more to LTC than a nursing home/skilled nursing facility. All of my "previous generation" family spent significant time in assisted living and/or memory care which are not SNFs.

 

[kfsinc]

Both of my parents and, my MIL resided in long term care facilities for several years. In the case of my parents, they were on Medicaid in Wisconsin and we were able to find outstanding facilities that took Medicaid, and had room. We (they) were lucky and had a great experience.

My MIL on the other hand had a LTC policy with some very stringent requirements -- and was also bankrupt and thus managed by a trustee. She was not on Medicaid so had to pay her own way. The LTC company did everything they could to avoid paying -- the primary excuse was that the facility where she was didn't have 24/7 RN's. They only had RN's on site 6 days a week. The other local facility was substandard and she didn't want to move.

When she ultimately moved to a memory care facility they did fund a portion of the monthly bill.

Given the family history, we've had LTC insurance for several years -- it's almost $10K per year (combined) for both of us, but will pay off very quickly if we need it. I did a LOT of research and will do more when/if the time comes to move. We're with Northwestern as they had very high ratings. It's expensive, but helps me sleep at night. I'm 70 and she's 68.

 

[ncbill]

there is a lot more to LTC than a nursing home/skilled nursing facility. All of my "previous generation" family spent significant time in assisted living and/or memory care which are not SNFs.

Yep, after seeing plenty of nursing homes when mom was sick I plan to stay at home or in an ALF instead.

Home health care agencies have experience in working with LTC companies.

So it's recommended they handle the claiming process.

Neighbor couple in their late 80s now have aides with them daily.

 

[RetiredHappy]

Yep, after seeing plenty of nursing homes when mom was sick I plan to stay at home or in an ALF instead.

Home health care agencies have experience in working with LTC companies.

So it's recommended they handle the claiming process.

Neighbor couple in their late 80s now have aides with them daily.

Yep, when we ran our home care agency, we received "assignment of benefits" after we helped families get approved for home care from their LTCI policies. We dealt direclty with the insurance companies to receive payment for services.

 

[Koolau]

Yep, after seeing plenty of nursing homes when mom was sick I plan to stay at home or in an ALF instead.

Home health care agencies have experience in working with LTC companies.

So it's recommended they handle the claiming process.

Neighbor couple in their late 80s now have aides with them daily.

I hope we don't need a nursing home and that we can manage with some home care if need be. But IF we need a nursing home, there is a clear monetary advantage compared to full-time home health care.

We all have to play it by ear, of course.

 

[51togo]

We are a couple in our mid 50's and thinking that long term care insurance is something at least worth looking at more closely. Both of our parents had memory/dementia issues. For those of you with long-term care insurance, how did you come up with a short-list of providers for quotes? How did you evaluate various options? What provider did you ultimately select? And any key points that you feel are important for this decision?

Thanks in advance for your insights on this topic.

This got me curious so I looked up my LTC folder. I was about your age when I got LTC insurance. The year was 2011 and I was 54. Just missed the boat on the “no premium after 10 years” type policies, my wife doesn’t qualify but I was in good health still working but planning to retire in a year or so therefore playing it safe. Selected Genworth after many others with $2200 premium coverage $250k pool of money, 4k monthly max, 90 service day, 5% compound. My current premium is $3300 for the same coverage, they offered to reduce coverage for lower premiums. When I retired in 2013, the FIRE calculator said I’m ok but my own number was just borderline, I was considering dropping the coverage. At the time this site suggests 50/50 but keeping it if I can afford it, I continue to participate. Turning 70 this year if I have to do it again I may recalculate to an annuity like @kingle aforementioned suggestion. But really difficult to foresee the future as everyone’s situation is different, whether premium continues to rise ie likely and whether you have to fight for coverage etc. Yet I did have several health issues last couple year, you’re healthy until you’re not. Every year I receive the statement I feel like dropping it, lol!
However according to my insurance broker I really got a good deal. Im keeping it but I doubt I would consider it today if I’m 54 again. Best on your decisions !