LTC insurance with a long waiting period - 12 months

[Chuckanut]

Has anybody had experience with buying LTC insurance with a long waiting period - say 12-18 months?

Many of us can afford to fund 6 months or even a year of LTC, but if care is needed for many years or the rest of our lives, that can be an asset destroyer. I am thinking that a LTC policy that would kick int after about 12 months of care over a certain period of time (say 12 months in about 5 years, not necessarily sequential).

Ideally, there would also be a cap on the premiums such as I had with life insurance years ago - it came with a table showing the lowest, expected, and highest premiums.

My fear is that often people are priced out of the market just as they get to the point in their lives when the odds of collecting on the policy are the highest.

Note: Hopefully, I will never have to collect on an LTC policy.

 

[audreyh1]

Here are many of us who would be far more interested if we could use a good chunk of our own money first (high deductible, long waiting period), and then have a policy kick in that is much cheaper for those very rare extremely long stay cases. Long waiting period might be preferable as perhaps les documentation required than a high deductible.

As it stands, there isn’t much incentive to buy a policy if you have, say, an extra $400K sitting around that could cover either spouse - whichever needed LTC first. This matches the payout cap on many policies sold today. This is assuming also that the rest of the assets are available to cover any LTC needs for the second spouse. Some folks use LTC insurance to shelter inheritances for their heirs.

These policies are not rationally priced today, and there is already a lot of fallout.

 

[mickeyd]

I am not a LTCI fancier, so this kind of coverage is not something that I would ever be interested in. That said, if someone were interested is such a plan, like a high deductible healthcare plan, it would certainly be more affordable than a 6-month plan.

 

[audreyh1]

I am not a LTCI fancier, so this kind of coverage is not something that I would ever be interested in. That said, if someone were interested is such a plan, like a high deductible healthcare plan, it would certainly be more affordable than a 6-month plan.

Yeah - I’d be more interested in a 36 month plan or 30 month at a minimum.

I think required waiting period nowadays might already be 3 months (Medicare will probably cover that in a nursing home) or maybe some are a bit longer. OK ReWahoo said 6 months below, so that is probably the longest you will see.

 

[bUU]

These policies are not rationally priced today, and there is already a lot of fallout.

I think the big problem with these policies is that they are rationally priced. I believe it is the services for which they provide insurance that are not rationally priced.

 

[REWahoo]

Has anybody had experience with buying LTC insurance with a long waiting period - say 12-18 months?

Not that long - our waiting period is 6 months.

Ideally, there would also be a cap on the premiums such as I had with life insurance years ago - it came with a table showing the lowest, expected, and highest premiums.

Ideally FAs would offer to refund their fees if they didn't make you money. I figure that will happen about the same time LTC insurers offer premium caps.

My fear is that often people are priced out of the market just as they get to the point in their lives when the odds of collecting on the policy are the highest.

There is another way to look at this - viewing LTCI the same way as term life insurance. You may need the financial help it provides far more if you are a 'young' old person than if you are an 'old' old person. The older you are the greater the odds are you won't live long in a care facility, needing less financial resources.

We have LTCI policies that we took out in our early 50's. The initial premiums were a real bargain and had a 10 year guarantee of premium. My plan was to monitor the premium increases and cancel the coverage once we got to the point we could cover our own LTC costs.

20 years have passed and there was no change to premiums during the first 14 years. Over the past 6 years the premiums have increased by almost 100%. Even after those increases the coverage is still relatively inexpensive but if the recent rate of increase continues I will likely cancel the coverage on my spouse. Since I can live far more cheaply than she can, keeping coverage on me for a while longer is the best option for now.

LTCI is a complex topic...

 

[Dtail]

Will self insure. Not worth the premiums to me. Parents have older plans with 100 day waiting period, but assuming one can't get those anymore.

 

[Big_Hitter]

elimination periods are just like deductibles so the longer they are the cheaper the premium

never heard of a 12 or 18 month elimination period though, longest I've seen is 6 months

 

[joeea]

Has anybody had experience with buying LTC insurance with a long waiting period - say 12-18 months?

No. When my wife and I purchased LTC insurance, I don't recall that kind of elimination period being offered. We opted for a 90 day elimination.

Ideally, there would also be a cap on the premiums such as I had with life insurance years ago - it came with a table showing the lowest, expected, and highest premiums.

I don't recall such a cap being an option.

Ask your insurance agent/broker to seek out such a policy for you.

 

[joeea]

Will self insure. Not worth the premiums to me.

How much do you have set aside for long term care now?

 

[Dtail]

How much do you have set aside for long term care now?

The plan is for 350-400k. The monies will come from an approximate 500-600k inheritance in around 10 years.
I know one shouldn't count on that, but I control their monies and the current monies are mostly in safe investments, with full LTC coverage and yearly positive net cash flows.

 

[joeea]

The plan is for 350-400k. The monies will come from an approximate 500-600k inheritance in around 10 years.
I know one shouldn't count on that, but I control their monies and the current monies are mostly in safe investments, with full LTC coverage and yearly positive net cash flows.

Seems reasonable.
Perhaps not polite, but how old are you? Is it safe for you/spouse to wait 10 years to be covered?

 

[Dtail]

Seems reasonable.
Perhaps not polite, but how old are you? Is it safe for you/spouse to wait 10 years to be covered?

I don't mind the question. DGF and I are 57/58. I guess there is some small risk out to 68-70 years old, but don't really wish to go the policy route, so will need to live with this risk.

 

[joeea]

I don't mind the question. DGF and I are 57/58. I guess there is some small risk out to 68-70 years old, but don't really wish to go the policy route, so will need to live with this risk.

It is a risk - everyone takes risks. It's good that you affirm it.

According to https://longtermcare.acl.gov/the-basics/:

"In the year 2000, almost 10 million people needed some form of long-term care in the United States. Of this population, 3.6 million (37%) were under age 65"

 

[HI Bill]

Has anybody had experience with buying LTC insurance with a long waiting period - say 12-18 months?

My fear is that often people are priced out of the market just as they get to the point in their lives when the odds of collecting on the policy are the highest.

Note: Hopefully, I will never have to collect on an LTC policy.

My mom had a LTC policy with a 6-month waiting period, AND a cap on benefits, and a promise that premiums would not increase. Premiums DID increase, and she was priced out of the market. She never wanted to live in a care facility, but bought insurance anyway (go figure). After wasting about $36K in premiums, I finally talked her into dropping the policy. Fast forward 12 years.

After breaking her pelivis on January 1, 2018, she spent 1 week in the hospital and 3 weeks in rehab (which Medicare paid for), and another 6 at the LTC facility before she passed. The base price for the memory care unit was $4K, with $2K for personal services (dressing, feeding, showering). So, $6K per month. Most folks don't last more than 2.5 years in a care facility, but some do last 8-10 years. My mom had progressive dementia and managed to stay at home with some outside help until she broke her pelvis. I'd say about half the folks in the memory care unit were on anti-anxiety meds to calm them, and there was no response when one walked by or said hi.

 

[REWahoo]

Most folks don't last more than 2.5 years in a care facility, but some do last 8-10 years.

This is from a 2010 study on length of nursing home stays. Length of Stay in Nursing Homes at the End of Life | GeriPal - Geriatrics and Palliative Care Blog

 

[Big_Hitter]

This is from a 2010 study on length of nursing home stays.

my dad has been in assisted living almost a year now

I agree that most nursing home visits are short, but the 2010 data may be old?

 

[REWahoo]

I agree that most nursing home visits are short, but the 2010 data may be old?

You think average length of stay at end of life has changed than much in 8 years?

 

[Big_Hitter]

You think average length of stay at end of life has changed than much in 8 years?

Possibly; otherwise why are the ins cos getting their asses kicked by ltc?

New coverage is nearly impossible to get nowadays.

 

[REWahoo]

Possibly

Google is your friend.

 

[Big_Hitter]

Google is your friend.

great, then google me some recent data

 

[REWahoo]

Standby. I'll get right on that...

Edit: OK, found it.

 

[Sue J]

This doesn't answer the OPs question but is along the lines of the discussion.

DHs mother is 89. DHs dad died in 2000 and Mom has been living independently in her own home. For the past year or so she did get a little help from friends and folks from her church. She just stopped driving a few months ago. Also, DHs youngest sister (50) lives nearby and would check by phone twice a day or stop in for a visit. Another sister lives 45 minutes away. Mom got a LifeLine last year for emergencies.

Last month she had a fall. She had edema in her legs and was lightheaded. She wasn't hurt in the fall but because of the edema issue she was admitted to the hospital. She was there about a week or so and then sent to rehab for weakness and they also saw swallowing issues. After a swallow test they determined she should be on pureed food and thickened liquids to keep from choking. They also told the family she could not live alone anymore. The plan from the rehab recommends palliative care moving toward hospice care.

This episode seems to have really taken it's toll on her. At 89, that's going to happen.

She has told her kids for years that she has LTC insurance, Dad bought it in the late 1980s. She has also been very clear that she wants to die at home. Assisted living would have been a very appropriate option up until this episode (she refused to consider it) but now she would need a nursing home if she couldn't stay in her home.

DHs sister called the LTC policy company and found out that her policy does not cover home health care, just assisted living or nursing home. I don't know if Mom knew this or not. She came home a few days ago and SIL set up 24 hr home care that is costing $648/day. That's $20,000/mo. SIL is planning to cut that back to 12hrs/day and will stay overnight with Mom to cover the other 12hrs.

So DHs Mom has been paying for LTC insurance for 30 years to cover something she very clearly does not want. I have no idea what this insurance cost, DHs family does not discuss money or expenses. Mom has a financial advisor and local sister has a POA so I hope she learns the full picture soon.

DH has been there (Denver) for a week, he offered to come and help take the load off his sisters, they both need to be working and they have taken a lot of time in the past month. He's retired and we always said he was available if needed.

 

[RE2Boys]

I've been waiting years for a LTCI policy with a 2-3 year elimination period. Haven't seen one yet.

 

[audreyh1]

Will self insure. Not worth the premiums to me. Parents have older plans with 100 day waiting period, but assuming one can't get those anymore.

I think 90 or 100 days is pretty standard. Medicare will pay for some initial nursing home hospitalization - particularly after a hospitalization event, but not long term.