Long Term Care Insurance

[Dawg52]

I know this topic has been batted around before but I would like to know who all actually owns a policy and if so who with? I bought a fairly cheap plan through work as the company pays for some of the premium, but I think I may drop the plan as the premiums are about to go up. I'm single with no kids so not quite as important for me as it is for someone married with kids. I should be abe to fund my own nursing care assuming it's not a 15-20 year stay.   My sister in law is considering buying a plan as she has 3 kids(spouse deceased) and would like to leave them something. What are your thoughts on the subject?

 

[REWahoo]

Re: Lont Term Care Insurance

DOG,

I bought coverage for the two of us 6 years ago, age 52 and 51. The policy is with CNA, who has a history of jacking up rates dramatically.

http://www.aarp.org/bulletin/longterm/Articles/a2004-03-24-bigpremium.html

The information on big CNA rate hikes did not come out until after we bought our policies (of course). We are OK for now, as the initial rates are guaranteed for the first 10 years. But I'm prepared for the worst when the guarantee period ends. If it is as bad as I think it will be, I'm considering dropping my coverage and keeping the policy on my DW. Although neither of us has any serious health problems, her family history says the odds are she will be more likely to need the policy than me. (My side of the family tends to expire quickly when the end comes.)

IMHO, LTC insurance is a real crapshoot. Just don't know if you are better off with it or without it.

REW

 

[Brat]

Husband and I have a policy with Allianz - paid up in 10 years.  We purchased it in our late 50s.   My parents purchased policies from GE and have used them both.

A good way to evaluate policies in general is to look at OPM's LTC program on the net.  None of the premum is supported but OPM vetted the contracts and providers. 

Based on my experiance with those in my family who are further along life's track... a person without family members one generation (at least) younger to oversee their care are left to the whims of others.  IMHO a long term care policy will at least give you options when you need help. 

Another option is to move into a continuing care community, particularly one that is non-profit and well endowed.  These facilities cost a bundle at move-in but when your care needs increase the costs are lower, and your friends are nearby. 

 

[Mr._johngalt]

Re: Lont Term Care Insurance

DOG,

I bought coverage for the two of us 6 years ago, age 52 and 51.  The policy is with CNA, who has a history of jacking up rates dramatically. 

http://www.aarp.org/bulletin/longterm/Articles/a2004-03-24-bigpremium.html

The information on big CNA rate hikes did not come out until after we bought our policies (of course).  We are OK for now, as the initial rates are guaranteed for the first 10 years.  But I'm prepared for the worst when the guarantee period ends.  If it is as bad as I think it will be, I'm considering dropping my coverage and keeping the policy on my DW.  Although neither of us has any serious health problems, her family history says the odds are she will be more likely to need the policy than me.  (My side of the family tends to expire quickly when the end comes.)

IMHO, LTC insurance is a real crapshoot.  Just don't know if you are better off with it or without it.

REW

No-brainer for us. Can't afford it. Didn't buy it.

JG

 

[cute fuzzy bunny]

My parents purchased policies from GE and have used them both.

Uh oh...

 

[Nords]

I know this topic has been batted around before but I would like to know who all actually owns a policy and if so who with? I bought a fairly cheap plan through work as the company pays for some of the premium, but I think I may drop the plan as the premiums are about to go up. I'm single with no kids so not quite as important for me as it is for someone married with kids. I should be abe to fund my own nursing care assuming it's not a 15-20 year stay.   My sister in law is considering buying a plan as she has 3 kids(spouse deceased) and would like to leave them something. What are your thoughts on the subject?

My father (widower, age 71) seems happy with a John Hancock policy, which as of last year provides more benefits at lower premiums than the federal govt's long-term care policy. I've since seen other nice words about Hancock.

My grandfather fully self-funded his own LTC... from 1988 through 2002. He succumbed to viral pneumonia at age 97, only a year short of achieving Medicaid eligibility. So he was just a little shy of your goal, although he probably should have entered the facility in 1985!

 

[JohnP]

The last three weeks were pretty hectic; then yesterday we put dad, 88 yo, in a nursing home close to my sister (we are a modern family with the four siblings living 350, 800, 1400, and 3000+ miles away from dad's apartment).  He has lived well independently in an apartment (including cooking, cleaning and driving) until about a month ago when dementia made  him, on and off, a different person.  It is not to be recommended.  We had to quickly find a place close to one of us which would accept him while drawing down his last bit of cash - the options are slim if he had had no available cash to supplement his SS.

DW and I signed up for the OPM LTC insurance (administered by Long Term Care Partners, LLC and offered by John Hancock and Metlife) just before we retired two years ago at age 60 and 62.  The word was out that LTC Ins is unnecessary if you retired either with very few assets or as a multi-millionaire; if you are in the middle somewhere you may reasonably be a candidate for LTC Ins.  With pensions, properties, IRAs and savings, we figured it would be appropriate for us, since - in brat's excellent words - "...long term care policy will at least give you options when you need help..."

Mainly, we chose LTC because we've heard all the stories of a someone running ragged caring for their ill spouse at home because they didn't have other care options short of bankrupting the family to qualify for medicaid.  We just want to be able to keep those acceptable options open in case it's needed - like any other insurance - so that we can continue to enjoy this RE lifestyle.  

For us, inheritance for our kids is not intended as a benefit here.  

JohnP

 

[windsurf]

Husband and I have a policy with Allianz - paid up in 10 years.  We purchased it in our late 50s.   My parents purchased policies from GE and have used them both.

A good way to evaluate policies in general is to look at OPM's LTC program on the net.  None of the premum is supported but OPM vetted the contracts and providers. 

What is OPM; the website?? thanks

 

[charlie]

Lyn and I have LTC policies with GE and are on a fixed pay as you
go plan.

Cheers,

Charlie

 

[cute fuzzy bunny]

Just hope you dont ever have to make a warranty claim on those policies Charlie. Actually I hope you never have to lay a claim at all!

 

[Brat]

OPM = Office of Personnel Management

This is the HR org that serves Federal employees and retirees.  They contract for health insurance, for example.  Several years ago they were authorized to research long term care insurance. The policy they approved (not taxpayer supported) is not the cheapest as they set high standards for the policy and the vendor.  However, the site is a good baseline to evaluate policies available to us all.

http://www.opm.gov/insure/ltc/

We purchased a 'paid up' policy.  The same result could be achieved by purchasing a regular policy and an annuity to pay the premium.

 

[MJ]

I purchased my LTC insurance last year age 56 from Unum Provident. 2 weeks after I signed the contract, they eliminated the indemnity coverage that I got. Their new product for me would have cost $500 more. I am sure they will continue to increase their prices for new LTC customers. My LTC budget has a built in 20% increase every 4 years. Unum has not increased their rates to existing customers for over 7 years. I expect to see an increase in the next 2 to 3 years.
With my lower income starting next year, the Fed and NYS will be paying 35% of my annual cost through the LTC tax deduction, so it will be cheaper than either my home or auto insurance.

 

[brewer12345]

I would expect to see a large increase from Unum (like 50%), especially if long term interest rates stay low.

 

[TromboneAl]

No one has mentioned how much his/her plan costs.

 

[KB]

I think it was 'Bob Smith' and his wife that bought LTC plans for about 15,000 each, cash up front. Might be cheaper to check into paying in advance.. They might have been in their late 50s when they purchased the plans. Since he doesn't post her any longer, it would be hard to confirm.

 

[grumpy]

No one has mentioned how much his/her plan costs.

My wife and I got LTC policies from CNA 6 years ago at ages 51 and 52. The policies provide for $100 per day for nursing home care (with automatic 5% escalation) and $50 per day for in-home care. There is a 30 day exclusion and no lifetime limit on coverage. The premiums are $678 (wife) and $862 (me) per year. There have been no premium increases so far. Alzheimer's runs in my family. My mother spent two years in a nursing home before her death. It is possible that our assets will reach a point where we can self-insure and drop the policies but we are not there yet. In the mean time I consider this prudent protection of a portion of our assets.

Grumpy

 

[REWahoo]

No one has mentioned how much his/her plan costs.

Like Grumpy, our CNA policies were purchased 6 years ago at ages 51 and 52. $100 per day, 5% escalation, $700 per week home care. Maximum lifetime benefit of $110K. Premiums are $584 each, guaranteed for 10 years.

REW

 

[MJ]

No one has mentioned how much his/her plan costs.

My policy has a 5% compounded increase. Depending on the daily cost of either a nursing home, assisted living or home care, it sould cover me from 3 to 10 years.
My annual cost is "currently" $1366. Next year, if the cost remains the same, it will be $945 after LTC tax deduction.

 

[grumpy]

Like Grumpy, our CNA policies were purchased 6 years ago at ages 51 and 52. $100 per day, 5% escalation, $700 per week home care. Maximum lifetime benefit of $110K. Premiums are $584 each, guaranteed for 10 years.

REW

Does the lifetime benefit of $110K also escalate at 5% per year? If not, your original three years of coverage is down to about 2.25 years. My policy has no lifetime limit which is why my premiums are significantly higher than yours. Just curious.

Grumpy

 

[REWahoo]

Does the lifetime benefit of $110K also escalate at 5% per year? If not, your original three years of coverage is down to about 2.25 years. My policy has no lifetime limit which is why my premiums are significantly higher than yours. Just curious.

The maximum daily, weekly and lifetime benefits all increase by 5% each anniversary date. We chose the three year coverage based on personal experience with my parents (2 years for my mom, 6 months for my dad) and DW's mom (2.5 years). It's all a crapshoot.....

Does you policy include any type of premium increase guarantee?

REW

 

[MJ]

My policy has a 5% compounded increase. Depending on the daily cost of either a nursing home, assisted living or home care, it sould cover me from 3 to 10 years.
My annual cost is "currently" $1366. Next year, if the cost remains the same, it will be $945 after LTC tax deduction.

I forgot to mention that my total coverage in today's dollars is $241k.

My policy does not have a premium increase guarantee. They haven't raised the rate for their existing customers for over 7 years so I assume they will have an increase in the next few years.

 

[grumpy]

Does you policy include any type of premium increase guarantee?

REW

No, the policy is guarenteed renewable for life but it states that "We may change the premium rates. Any change will apply to all policies in the same class as yours in the state where the policy was issued". So far there have been no premium increases.

Grumpy

 

[Dreamer]

My spouse and I signed up for LTC when the gov started offering it to fed employees. I think that we are signed up for 5 years and 5% increase each year (started at $100.00 per day). There was talk about being able to possibly get it cheaper from another company, but I felt more secure getting it through the gov plan. Hopefully, if the company ever defaults, then the gov would come up with another company. Who knows, but it makes me sleep better at night. BTW, I think I am the first person in my family that has ever purchased LTC and as far as I know, still the only one.

Dreamer

 

[grumpy]

Way back when this thread was active I said I would post any premium increase when my and DW's LTC policies from CNA came up for the 10th year renewal. I just got the invoices in the mail and the increases are 15%:

My policy: from $862 to $ 991 per year
DW's policy from $677 to $779

With the escalation provision the policies now provide $163 per day benefit (50% for home health care) with no lifetime limit and 30 day exclusion.

I guess I should check out the current rates for the Gov't LTC program - they were not competitive when the program first came out. Even with the increase in premiums ($1770 combined cost for both of us) it still seems like a good value to me. If investments continue to do well we may be able to self insure in a few more years. Until then I will keep the policies in effect.

Grumpy

 

[grumpy]

Wow - I just used the calculator on the Fed LTC website to get a quote for comparable polices for both of us. For me it would be $3180 per year and DW $3048! Starting our policies at age 50 was a good move. The 10 years of premiums we have paid so far would be equaled in only 2.5 years under the gov't program if we switched now.

To get comparable premiums to our current policies we would have to reduce benefits to $100 per day, 3 year max benefit and 90 day exclusion.

Grumpy