So if you start buying in your 50s, you can pay premiums for what 15-20 years before you might actually collect?
How do they determine what's a valid claim?
You decide to go to a facility and they have to start paying? Or is there some medical threshold that you have to reach and it's determined you need care?
A licensed physician must certify that you have lost two of the six activities of daily living (ADL): eating, bathing, dressing, toileting, transferring (walking) and continence. After that's done, benefits kick in immediately subject to any waiting periods specified in the policy.
My Dad probably first started showing symptoms of cognitive impairment in 2008 (age 74), and in March 2011 he could no longer live independently. He's been receiving benefits from his John Hancock LTC policy since the 100-day exclusion period ended that July. By then he'd been paying the policy premiums for just over 18 years. Many policy premiums ramp sharply upward if you purchase them after age 60. Of course today many of them also ramp sharply upward after you turn age 60, even if you bought them before age 60.
Most policies specify partial or total loss of at least two of the activities of daily living, and the policy fine print is extremely detailed in exactly what that means. (Which is a good thing.) Unfortunately it's quite possible for someone with Alzheimer's to be totally unsafe for independent living, yet still be able to pass a mini-mental state exam and appear to be handling the ADLs. When John Hancock rejected the documentation provided by Dad's care facility, we hired a neuropsychologist ($3670) to interview Dad for several hours on well-known tests like drawing a clock, spelling words backwards, dialing 911, and handling home emergencies. JH then quickly approved the claim.
It's not always necessary to be living in a facility before the policy starts paying. Early LTC policies used to specify "nursing home" care, but now most of them will include benefits payments for home care or assisted living facilities.
You could start at this post in this thread:
http://www.early-retirement.org/for...-and-asset-allocations-55688.html#post1064097
I'm a tad jaundiced on the subject. I think a lot of the insurance industry's issues would be resolved if the execs and sales staffs had an immediate family member in a care facility (and had to file the claim) or if they interned alongside a CNA in a care facility for a month.
John Hancock, come walk a mile in my [-]fax machine[/-] slippers the next time I have to send you the monthly bill from my Dad's care facility...
Here's another thread that I just posted about seeking interview questions for a long-term care exec who I'll be talking to in a few days:
http://www.early-retirement.org/for...erview-on-long-term-care-insurance-63738.html