Long term care insurance fading away

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Long term care insurance fading away

Postby Browser » Mon Dec 03, 2012 6:32 pm

Looks like this dog won't hunt. I debated whether to get LTCI at one time. Now I'm really glad I didn't. Hope you didn't either:

No hyperbole here. Genworth, the largest vendor of LTCI announced major premium increases and a variety of other changes to tighten access to policies. Some companies have stopped selling group policies. Others have stopped selling individual policies. So it is possible that even if you wanted a policy, you might not be able to get it.

This is not a tragedy.

The idea of long-term care insurance is a good one, but it’s really a shame it has been in the hands of, well, the insurance industry.

So let’s ask a rude question: Is the fast fade of LTCI something we should worry about? Here are my tough-hearted reasons that it isn’t.

http://assetbuilder.com/scott_burns/playing_roulette_with_long_term_care
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Re: Long term care insurance fading away

Postby HouseStark » Tue Dec 04, 2012 5:29 pm

Long term care insurance would seem to be an under-developed insurance product. It is much less prevalent than life or health insurance and doesn't have the claims history. It appears the insurance companies under-priced the products in the past and are making adjustments. Unlike the government, insurance companies have a need to remain profitable in the long run. It's unfortunate for those who were placing some reliance on the policies as they have been priced in the past.
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Re: Long term care insurance fading away

Postby grok87 » Tue Dec 04, 2012 6:53 pm

Browser wrote:Looks like this dog won't hunt. I debated whether to get LTCI at one time. Now I'm really glad I didn't. Hope you didn't either:

No hyperbole here. Genworth, the largest vendor of LTCI announced major premium increases and a variety of other changes to tighten access to policies. Some companies have stopped selling group policies. Others have stopped selling individual policies. So it is possible that even if you wanted a policy, you might not be able to get it.

This is not a tragedy.

The idea of long-term care insurance is a good one, but it’s really a shame it has been in the hands of, well, the insurance industry.

So let’s ask a rude question: Is the fast fade of LTCI something we should worry about? Here are my tough-hearted reasons that it isn’t.

http://assetbuilder.com/scott_burns/playing_roulette_with_long_term_care

Agree. It's all been a scam from day one. Any long term product without guaranteed long term rates is a scam.
cheers,
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Re: Long term care insurance fading away

Postby mickeyd » Tue Dec 04, 2012 7:20 pm

The idea of long-term care insurance is a good one, but it’s really a shame it has been in the hands of, well, the insurance industry.


It's been a cash cow for the LI industry for 20+ years but it came back to bite them in the *ss, as many fads do.

For those of us who have decided to self insure/not insure this risk it looks more and more like we made a good decision and saved a truckload of cash.
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Re: Long term care insurance fading away

Postby dhodson » Tue Dec 04, 2012 7:38 pm

i am no fan of the insurance industry tactics but its too soon to say that those of us who have self insured did the right thing....

if prices skyrocket to the point that you know you couldnt have afforded to keep it in place then likely you made the right choice.

if insurance companies go under or fail to pay a bunch of claims during your lifetime then you also probably made the right choice.

if you require LTC and the costs are much more than you would have paid in premiums then barring the above, the wrong choice was made.

None of us will really know ahead of time. You just have to make the best decision you can with the info at hand. For me thats avoiding this product.

i personally think the number or percent of people who should purchase the product has greatly decreased. I personally feel the industry is going to get an even bigger black eye bc of ltci but thats really a guess on my part.
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Re: Long term care insurance fading away

Postby nisiprius » Tue Dec 04, 2012 8:01 pm

If the insurers can't figure out how make money by fulfilling a need, I guess it's back to plan B, the providential aunt:
The existence of Aunt Maria, after being rather a "trial" to the Baineses, had for twelve years past developed into something absolutely "providential" for them. (It is to be remembered that in those days Providence was still busying himself with everybody's affairs, and foreseeing the future in the most extraordinary manner. Thus, having foreseen that John Baines would have a "stroke" and need a faithful, tireless nurse, he had begun fifty years in advance by creating Aunt Maria, and had kept her carefully in misfortune's way, so that at the proper moment she would be ready to cope with the stroke. Such at least is the only theory which will explain the use by the Baineses, and indeed by all thinking Bursley, of the word "providential" in connection with Aunt Maria.)
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Re: Long term care insurance fading away

Postby Levett » Tue Dec 04, 2012 8:08 pm

If you have watched someone slowly fade away with Alzheimer's--I have watched more than one--and these are people who seemingly could afford to "self-insure" (though a pool of one), only the slow dying lasted much, much longer than predicted, and the estate wasted away at an unanticipated rate, you might not feel so smug.

But go ahead and indulge in your illusion of continuing health and hope you have a quick death--in or out of an institutional setting.

And, yes, I have LTCI (with the compound inflation rider) and relative to income the premium is a pittance and I have watched the company pay promptly to my unfortunate friends and it's reassuring to know that should I become one of those unfortunates my estate will be preserved for my beneficiaries while my montly income (including LTCI) amply provides for my deterioration and demise.

But let me not disturb your sense of confidence, however fragile you may, in fact, be.

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Re: Long term care insurance fading away

Postby BruDude » Tue Dec 04, 2012 9:04 pm

Those changes happened a few months ago. Even with the price increases, GW is still the lowest priced company the majority of the time.
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Re: Long term care insurance fading away

Postby Honobob » Tue Dec 04, 2012 9:10 pm

Browser wrote:Looks like this dog won't hunt. I debated whether to get LTCI at one time. Now I'm really glad I didn't. Hope you didn't either:


But most all the people like me who purchased LTCi are NOT letting their policys lapse. Insurance companies are raising rates and so few people ever need LTC so why does anyone think there is a problem? It seems like non purchasers are trying to lull themselves into acceptance of their future on Medicaid. Today my LTCi can provide me with $85,000 annualy. No Medicaid for me. My pension and SS will be icing on the cake. Twenty years from now my policy will pay over $225,000 a year. No way will my pension and SS grow to provide that kind of benefit. How will non policy holders pay $225,000?
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Re: Long term care insurance fading away

Postby letsgobobby » Tue Dec 04, 2012 9:16 pm

Honobob wrote:How will non policy holders pay $225,000?


more to the point, how will your insurer?
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Re: Long term care insurance fading away

Postby dhodson » Tue Dec 04, 2012 9:21 pm

Levett wrote:If you have watched someone slowly fade away with Alzheimer's--I have watched more than one--and these are people who seemingly could afford to "self-insure" (though a pool of one), only the slow dying lasted much, much longer than predicted, and the estate wasted away at an unanticipated rate, you might not feel so smug.

But go ahead and indulge in your illusion of continuing health and hope you have a quick death--in or out of an institutional setting.

And, yes, I have LTCI (with the compound inflation rider) and relative to income the premium is a pittance and I have watched the company pay promptly to my unfortunate friends and it's reassuring to know that should I become one of those unfortunates my estate will be preserved for my beneficiaries while my montly income (including LTCI) amply provides for my deterioration and demise.

But let me not disturb your sense of confidence, however fragile you may, in fact, be.

Lev



You do realize that most policies sold these days have limits and wouldn't prevent the problem you are talking about. If your need for ltc greatly exceeds the policy limits, you haven't prevented financial ruin.
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Re: Long term care insurance fading away

Postby Jerilynn » Wed Dec 05, 2012 2:49 am

Honobob wrote:But most all the people like me who purchased LTCi are NOT letting their policys lapse.


Not yet, perhaps. I'll bet you a pizza it will be much different in 10 yrs.
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Re: Long term care insurance fading away

Postby nisiprius » Wed Dec 05, 2012 6:48 am

It does seem outrageous that there's no kind of cap on premium increases, and that insurance companies have the power to make the lapse rate a self-fulfilling prophecy by raising rates.

It may not be uniform since insurance is governed by state law, but it is very common when buying LTCi to be required to sign a form that says you've considered whether or not you could afford the policy if the premiums were increased by 20%. (In an older thread, by the way, I challenged an insurance agent's assertion; I would have sworn in a court of law that I hadn't ever signed such a thing. I didn't have a copy in my file folder. But I contacted my own agent, and she sent me a copy of her file copy. Yes, I had.) The exact language of the form I signed was:
Have you considered whether you could afford the policy if the premiums went up, for example, by 20%?
Now you can argue until the cows come home about what the agent and the insurance company's moral and/or legal obligations are, having set that expectation. It's not precise language, but 20% sure isn't doubling, either. It seems to me that in cases where the premium increase is obviously far, far beyond what could have been reasonably expected--with the signed disclaimer being the measure of "reasonable"--that the insurance company ought to be obligated to offer you the option of refunding all of the premiums you've paid (minus any benefits actually received). Would that my wishing could make it so.
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Re: Long term care insurance fading away

Postby donall » Wed Dec 05, 2012 8:11 am

Long term care insurance is still evolving. I am working with a senior who has had LTC insurance for 20+ years. She has two policies (no, I do not know the reason for this) that together cover $150/day. One policy has changed carriers 2X and had rate increases. The other company went bankrupt and has raised premiums more than once. States guarantee these policies up to a limit, but the state is broke and woefully behind in payment of bills. I hope that these policies will pay up if the time comes. A lot can happen in 20 or 30 years.

Knowing this history has made me think a lot more about buying LTC insurance.
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Re: Long term care insurance fading away

Postby likegarden » Wed Dec 05, 2012 8:23 am

I have LTCI with Genworth through my former employer and have the rate increased every 3 years to cover inflation, as planned, so I am feeling nothing bad yet. People who have self insured are paying for long term care of other people anyway via taxes which then cover the Medicaid expenses of long term care. My state wants that more people sign up for LTCI to lower its Medicaid costs. In case more people get out of LTCI the lawyers will have more business establishing and maintaining trusts to protect savings, so there is a cost for long term care anyway, you will have to pay for trusts or LTCI to protect against long term care costs. Only the poor have free long term care via Medicaid. At some year states will no longer be able to pay for Medicaid I believe, and what is then?
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Re: Long term care insurance fading away

Postby dhodson » Wed Dec 05, 2012 8:47 am

donall wrote:Long term care insurance is still evolving. I am working with a senior who has had LTC insurance for 20+ years. She has two policies (no, I do not know the reason for this) that together cover $150/day. One policy has changed carriers 2X and had rate increases. The other company went bankrupt and has raised premiums more than once. States guarantee these policies up to a limit, but the state is broke and woefully behind in payment of bills. I hope that these policies will pay up if the time comes. A lot can happen in 20 or 30 years.

Knowing this history has made me think a lot more about buying LTC insurance.



The state does NOT guarantee the policy at all. The state guaranty associ is an organization the state runs. Insurance companies selling in the state must belong and in essence there is an agreement that these companies must do their best to make good on the guarantees of a failing company up to the state limits. There is however no state money behind this.
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Re: Long term care insurance fading away

Postby Levett » Wed Dec 05, 2012 9:20 am

Strictly FYI for anyone interested:

http://www.acli.com/Tools/Industry%20Facts/Guaranty%20Associations/Pages/FS08-007.aspx

This subject has come up many times before.

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Re: Long term care insurance fading away

Postby Needtoknow » Wed Dec 05, 2012 9:12 pm

Bernd wrote:I have LTCI with Genworth through my former employer and have the rate increased every 3 years to cover inflation, as planned, so I am feeling nothing bad yet. People who have self insured are paying for long term care of other people anyway via taxes which then cover the Medicaid expenses of long term care. My state wants that more people sign up for LTCI to lower its Medicaid costs. In case more people get out of LTCI the lawyers will have more business establishing and maintaining trusts to protect savings, so there is a cost for long term care anyway, you will have to pay for trusts or LTCI to protect against long term care costs. Only the poor have free long term care via Medicaid. At some year states will no longer be able to pay for Medicaid I believe, and what is then?


It really does depend upon the state in which one has the longterm care policy.I live in California and they are not quick to give increases. In fact, I have seen some insurance companies request 30, 40, 50 and 60 per cent increases on the policies in many states and receive them easily. However, in California those requests are often denied or lowered considerably. The policy that I own with Genworth has never had the rate increased. That's not to say it will never increase, but up to this point it hasn't.
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Re: Long term care insurance fading away

Postby donall » Wed Dec 05, 2012 9:53 pm

dhodson wrote:
donall wrote:Long term care insurance is still evolving. I am working with a senior who has had LTC insurance for 20+ years. She has two policies (no, I do not know the reason for this) that together cover $150/day. One policy has changed carriers 2X and had rate increases. The other company went bankrupt and has raised premiums more than once. States guarantee these policies up to a limit, but the state is broke and woefully behind in payment of bills. I hope that these policies will pay up if the time comes. A lot can happen in 20 or 30 years.

Knowing this history has made me think a lot more about buying LTC insurance.



The state does NOT guarantee the policy at all. The state guaranty associ is an organization the state runs. Insurance companies selling in the state must belong and in essence there is an agreement that these companies must do their best to make good on the guarantees of a failing company up to the state limits. There is however no state money behind this.


Thanks for clarifying this, as states only place insurance carriers under their control or liquidate the insurance co. This still makes me nervous about LTC.
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Re: Long term care insurance fading away

Postby Honobob » Sun Dec 09, 2012 6:11 pm

letsgobobby wrote:
Honobob wrote:How will non policy holders pay $225,000?


more to the point, how will your insurer?

I guess with the premiums they collect. I think they put them in a huge pool to pay for the maybe 6% of people that actually need LTC. A lot of money to me but a drop in the bucket for them. Anyway, I'm mostly looking at today and the near future. That looks good. I'm glad I have my LTCi.
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Re: Long term care insurance fading away

Postby mickeyd » Sat Dec 15, 2012 7:31 pm

Scott Burns recently had a good column on LTCI. The bottom line, he says, is that insurance companies have initially underpriced the product due to a bad investment climate and the fact that not enough of the policies lapsed without paying claims. Evidently they factor in a hope that the premium payer's will pay for a while and then terminate coverage w/o getting back anything.

but it’s really a shame it has been in the hands of, well, the insurance industry. In good times, insurance companies have piled into the market, overestimating the number of policies that would be dropped before claims were made. At the same time they, like everyone else, overestimated the return they would earn on those premiums. The result was artificially low premiums.


•The Continuing Care Retirement Community Alternative. You can receive guarantees of lifetime care by becoming a member of a Continuing Care Retirement Community. These residential communities bundle senior residences, assisted living and nursing care in a single property to provide a continuum of care. You become a member with a substantial initial payment and a monthly payment for a broad package of services. Some of the initial payment may be returned to your estate upon death.


This is the kind of community that my folks lived out their final years and it seemed to work quite well.

http://assetbuilder.com/scott_burns/pla ... _term_care
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Re: Long term care insurance fading away

Postby TheGreyingDuke » Sat Dec 15, 2012 8:26 pm

mickeyd wrote:The Continuing Care Retirement Community Alternative. You can receive guarantees of lifetime care by becoming a member of a Continuing Care Retirement Community. These residential communities bundle senior residences, assisted living and nursing care in a single property to provide a continuum of care. You become a member with a substantial initial payment and a monthly payment for a broad package of services. Some of the initial payment may be returned to your estate upon death.


My in-laws spent their final years in such a community, in their case one that was connected to a university. It worked well for them but there is one feature that might jeopardize future viability and that is whether or not the community is able to continue to attract new members as the old ones die off. If vacancies occur then fees would need to be raised to meet the considerable fixed costs.

There is a rather large entry fee to buy in and then the monthly fees are also not inconsiderable (I recall they paid about $300k entry and a monthly fee of around $3k, this covered apartment, all utilities, and one meal a day.) Fees had been fairly stable over the 7 years they were in residence and when my mother-in-law needed nursing care she stayed on the grounds in a nursing unit. And indeed, when they both died, the estate was returned about 90% of the initial entry fee.

One problem for me was that they were surrounded full time by other old people (I am getting there myself) and I would miss the mix of people I am able to get in my small town environment.
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Re: Long term care insurance fading away

Postby ResNullius » Sat Dec 15, 2012 8:36 pm

Consumer Report has covered this issue for at least a couple of decades, always indicating that you shouldn't buy it, except in certain very limited circumstances.
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Re: Long term care insurance fading away

Postby grok87 » Sat Dec 15, 2012 8:42 pm

mickeyd wrote:Scott Burns recently had a good column on LTCI. The bottom line, he says, is that insurance companies have initially underpriced the product due to a bad investment climate and the fact that not enough of the policies lapsed without paying claims. Evidently they factor in a hope that the premium payer's will pay for a while and then terminate coverage w/o getting back anything.

but it’s really a shame it has been in the hands of, well, the insurance industry. In good times, insurance companies have piled into the market, overestimating the number of policies that would be dropped before claims were made. At the same time they, like everyone else, overestimated the return they would earn on those premiums. The result was artificially low premiums.


•The Continuing Care Retirement Community Alternative. You can receive guarantees of lifetime care by becoming a member of a Continuing Care Retirement Community. These residential communities bundle senior residences, assisted living and nursing care in a single property to provide a continuum of care. You become a member with a substantial initial payment and a monthly payment for a broad package of services. Some of the initial payment may be returned to your estate upon death.


This is the kind of community that my folks lived out their final years and it seemed to work quite well.

http://assetbuilder.com/scott_burns/pla ... _term_care

I think one has to be very careful. There have been a bunch of bankruptcies
http://nreionline.com/seniorshousing/ba ... _01302012/
the only way i would do this, is to join one where there is not a big entry fee to get in. I guess that means you pay more on an annual basis.
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Re: Long term care insurance fading away

Postby Honobob » Sat Dec 15, 2012 9:11 pm

[quote="mickeyd"]Scott Burns recently had a good column on LTCI. The bottom line, he says, is that insurance companies have initially underpriced the product due to a bad investment climate and the fact that not enough of the policies lapsed without paying claims. Evidently they factor in a hope that the premium payer's will pay for a while and then terminate coverage w/o getting back anything.
[quote]

The premium payer's that lapse got exactly what they paid for, a certain term of coverage. That's what they got back! Why aren't people lapsing? Do they realize the great deal they have even with escalating premiums?
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Never again.

Postby Taylor Larimore » Sat Dec 15, 2012 10:08 pm

Browser:

About 20 years ago my best friend bought a Genworth Long Term Care Policy. I told John that I thought he was making a mistake, primarily because the company could raise rates (as a group).

Now, every Wednesday, a few friends and I have lunch with John at his home. John has Parkinson's disease and must lie in bed or sit in a wheelchair with 24 hour attendents paid from his Genworth policy.

I chose not to buy long-term care insurance, but I will never again tell someone else not to buy it.

Best wishes.
Taylor
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Re: Long term care insurance fading away

Postby bluemarlin08 » Sat Dec 15, 2012 11:00 pm

[qu
ote] :x
I chose not to buy long-term care insurance, but I will never again tell someone else not to buy it.[/quote]

Exactly how I feel.
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Re: Never again.

Postby Diogenes » Sun Dec 16, 2012 1:55 am

Taylor Larimore wrote:Browser:

About 20 years ago my best friend bought a Genworth Long Term Care Policy. I told John that I thought he was making a mistake, primarily because the company could raise rates (as a group).

Now, every Wednesday, a few friends and I have lunch with John at his home. John has Parkinson's disease and must lie in bed or sit in a wheelchair with 24 hour attendents paid from his Genworth policy.

I chose not to buy long-term care insurance, but I will never again tell someone else not to buy it.

Best wishes.
Taylor


Taylor, I sympathize with your friends situation, we have all seen those. I wonder though of the bottom line cost benefit for the mainstream purchaser, as well as your friend. Assuming the Glenworth policy had a number of premium adjustments over 20 years, and has a daily maximum which typically would not pay the entire cost for 24/7 home care (which is also of lesser cost than assisted living or nursing home) without being supplemented, and also likely has a maximum number of months of benefits after the waiting period, the max payout for home health care for the average of two years is about $150,000 ($200/day). That policy in my State would cost about $34,000 based on best price this year if purchased from Glenworth now when I am 55 (assuming no family history). If I purchased it now and paid for 20 years with an average increase of 10 percent per year the total paid out would be close to 100K. So it is easy to see why many think it is of questionable utility currently. In fairness, there are so many variables that the insurers must have a lot of wiggle room (which they do with group increases). It is a business designed to make money after all. It can only do that if the rest of us pay the big bucks and take all the risk of increases.

_D_
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Re: Long term care insurance fading away

Postby dhodson » Sun Dec 16, 2012 8:14 am

The trouble is that one is comparing previous policies with current policies. Previous policies were much cheaper and hadnt seen astronomic rate increases. They also had better benefits and many policies were unlimited. Today its almost impossible for most people to buy an unlimited policy either because of cost or lack of availability. Those policies turned out to be a decent deal probably even for those who never made a claim.

People just need to understand that if they purchase these policies rate increases are likely especially if they purchase from one of the cheaper insurers. This is NOT like term life or auto insurance or any other insurance where you are buying coverage for the moment. For the most part people are buying coverage so they will still have it in place in the future. If they waited until they were much older, they wouldnt be able to budget it. You need to make sure you will still be able to afford the policy or accept the benefit decrease in the future if you need to keep the policy in force. Today way too many people are being forced out of their policies because of rate increases. Even the few that understood that rate increases were possible probably didnt understand that lack of lapses could cause such problems for them.
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Re: Long term care insurance fading away

Postby bluemarlin08 » Sun Dec 16, 2012 9:01 am

21,000 per year, where did you get these rates?
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Re: Long term care insurance fading away

Postby pshonore » Sun Dec 16, 2012 10:27 am

Yes, where did they come from? My wife and I purchased a Genworth policy a few years back in our mid 60's. Cost is just under 5K per year and included 6K per month inflation adjusted benefits and AFAIK the policy will pay up to the max for any type of care (home, assisted living, nursing home , etc) although I could be mistaken about that.
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Re: Long term care insurance fading away

Postby Diogenes » Sun Dec 16, 2012 10:40 am

bluemarlin08 wrote:21,000 per year, where did you get these rates?


Sorry Bluemarlin, corrected the numbers to remove any family history and include a small rate increase each year. Still see no utility based on benefit max and risk of much larger increases, but if you do please advise.

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Re: Long term care insurance fading away

Postby bluemarlin08 » Sun Dec 16, 2012 11:54 am

corrected the numbers to remove any family history and include a small rate increase each year.


I must have misunderstood, I thought you stated that the policy increases at 10% per year, don't understand the family history comment. Don't know of any policy that had that of increases. LTCi makes sense for some and doesn't for others. However, that being said, it takes very few months of claim to recoup all premiums paid and remember premiums stop once on claim.
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Re: Never again.

Postby abuss368 » Sun Dec 16, 2012 12:10 pm

Taylor Larimore wrote:Browser:

About 20 years ago my best friend bought a Genworth Long Term Care Policy. I told John that I thought he was making a mistake, primarily because the company could raise rates (as a group).

Now, every Wednesday, a few friends and I have lunch with John at his home. John has Parkinson's disease and must lie in bed or sit in a wheelchair with 24 hour attendents paid from his Genworth policy.

I chose not to buy long-term care insurance, but I will never again tell someone else not to buy it.

Best wishes.
Taylor


Hi Taylor,

I guess we never know where life takes us.

God bless you and your friend.
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Re: Long term care insurance fading away

Postby Jerilynn » Sun Dec 16, 2012 5:54 pm

mickeyd wrote:Scott Burns recently had a good column on LTCI. The bottom line, he says, is that insurance companies have initially underpriced the product due to a bad investment climate and the fact that not enough of the policies lapsed without paying claims. Evidently they factor in a hope that the premium payer's will pay for a while and then terminate coverage w/o getting back anything.



And if they can keep increasing the premium on current policy holders significantly, that's exactly what will happen.
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Re: Never again.

Postby Jerilynn » Sun Dec 16, 2012 5:59 pm

Taylor Larimore wrote:Browser:

About 20 years ago my best friend bought a Genworth Long Term Care Policy. I told John that I thought he was making a mistake, primarily because the company could raise rates (as a group).

Now, every Wednesday, a few friends and I have lunch with John at his home. John has Parkinson's disease and must lie in bed or sit in a wheelchair with 24 hour attendents paid from his Genworth policy.

I chose not to buy long-term care insurance, but I will never again tell someone else not to buy it.

Best wishes.
Taylor


Good point, Taylor. This is an individual decision. If I think a friend is buying/has bought a policy and I think it's not a good deal for them, I will express my opinion and in some cases tell them not to buy it. I have done this with a very good friend that has NWM LTC ins, I'm just trying to help (in my mind).

Unfortunately, I have a hard time expressing my opinion. ;)
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Re: Long term care insurance fading away

Postby Jerilynn » Sun Dec 16, 2012 6:02 pm

pshonore wrote:Yes, where did they come from? My wife and I purchased a Genworth policy a few years back in our mid 60's. Cost is just under 5K per year and included 6K per month inflation adjusted benefits and AFAIK the policy will pay up to the max for any type of care (home, assisted living, nursing home , etc) although I could be mistaken about that.


What if the premiums quadruple in the next 5 years, will you still keep it? I'm not saying it's going to happen or even likely to happen, but just curious. There has to be some point where the protection is not worth the premiums, yes?
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Re: Long term care insurance fading away

Postby grok87 » Sun Dec 16, 2012 6:17 pm

Jerilynn wrote:
pshonore wrote:Yes, where did they come from? My wife and I purchased a Genworth policy a few years back in our mid 60's. Cost is just under 5K per year and included 6K per month inflation adjusted benefits and AFAIK the policy will pay up to the max for any type of care (home, assisted living, nursing home , etc) although I could be mistaken about that.


What if the premiums quadruple in the next 5 years, will you still keep it? I'm not saying it's going to happen or even likely to happen, but just curious. There has to be some point where the protection is not worth the premiums, yes?

Let me make clear that I have not bought this product and will not for that very reason- as you and Taylor both point out they can raise the rates.
To play devil's advocate for a moment though, the product is regulated by state insurance departments and in theory they are supposed to ensure that rates are "fair, adequate, and not excessive"
https://docs.google.com/viewer?a=v&q=ca ... j3dgNmMDjA

for whatever that's worth...
cheers,
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Re: Long term care insurance fading away

Postby dhodson » Sun Dec 16, 2012 6:21 pm

In many if not most states the insur comm has to allow the increase if the insur co shows evidence that their performance isn't what was originally predicted. You need to keep in mind the alternative is they don't pay any claims bc they are out of business.
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Re: Long term care insurance fading away

Postby Jerilynn » Sun Dec 16, 2012 6:48 pm

I guess the question I would ask anyone who does have an existing LTC policy..... "How much would rates have to rise before you 'dumped it'?
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Re: Long term care insurance fading away

Postby dhodson » Sun Dec 16, 2012 7:08 pm

That's not the real question.

The question is how much would you pay before bailing.

Most people are fairly fixed on one side of the ltci coin. If you think you are in the middle and considering the product, realize rate increases of up to 90% are not unheard of.
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Re: Long term care insurance fading away

Postby ddunca1944 » Sun Dec 16, 2012 7:29 pm

Jerilynn wrote:I guess the question I would ask anyone who does have an existing LTC policy..... "How much would rates have to rise before you 'dumped it'?


Our premiums with John Handcock went up 16 % this year. This is our 5th year with them and the first increase. I was not pleased. However, since our policy benefit increases each year by 5%, we have, effectively increased our benefit amount by 25% since we first took out the policy. With that in mind, I sucked it up and paid the premium.

My family has a strong family history of Alzheimer's disease. I plan to keep the policy as long as I can pay the premium. Even if I have to give up something else to do so.
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Re: Long term care insurance fading away

Postby Jerilynn » Sun Dec 16, 2012 8:58 pm

dhodson wrote:That's not the real question.

The question is how much would you pay before bailing.

Most people are fairly fixed on one side of the ltci coin. If you think you are in the middle and considering the product, realize rate increases of up to 90% are not unheard of.


Ok, the way you termed the question suits me. Any owners of LTCI want to give an answer?
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Re: Long term care insurance fading away

Postby Jerilynn » Sun Dec 16, 2012 9:00 pm

ddunca1944 wrote:
Jerilynn wrote:I guess the question I would ask anyone who does have an existing LTC policy..... "How much would rates have to rise before you 'dumped it'?


Our premiums with John Handcock went up 16 % this year. This is our 5th year with them and the first increase. I was not pleased. However, since our policy benefit increases each year by 5%, we have, effectively increased our benefit amount by 25% since we first took out the policy. With that in mind, I sucked it up and paid the premium.

My family has a strong family history of Alzheimer's disease. I plan to keep the policy as long as I can pay the premium. Even if I have to give up something else to do so.


Understood. Say they raise the premium another X% every year for Y years. What is your X and Y value before you would let the policy lapse?
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Re: Long term care insurance fading away

Postby stan1 » Sun Dec 16, 2012 9:11 pm

Jerilynn wrote:
dhodson wrote:That's not the real question.

The question is how much would you pay before bailing.

Most people are fairly fixed on one side of the ltci coin. If you think you are in the middle and considering the product, realize rate increases of up to 90% are not unheard of.


Ok, the way you termed the question suits me. Any owners of LTCI want to give an answer?


How about this answer: I'll know it when I see it. :wink:
Unfortunately I have seen several family members need long term care.
It is a huge burden to ask your spouse, children, and grandchildren to take on, especially if they aren't comfortable spending down family assets for care and try to do it themselves. People are more comfortable filing an insurance claim than spending their own money, I think.

I would never wish a long nursing home stay on anyone, but sometimes it happens even though no one wants it to happen.
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Re: Long term care insurance fading away

Postby Allan » Sun Dec 16, 2012 9:18 pm

Jerilynn wrote:I guess the question I would ask anyone who does have an existing LTC policy..... "How much would rates have to rise before you 'dumped it'?


Jerilynn:

How much would your health insurance rates have to rise before you dumped it? Nothing seems to increase as much as health insurance.
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Re: Long term care insurance fading away

Postby Jerilynn » Sun Dec 16, 2012 10:34 pm

Allan wrote:
Jerilynn wrote:I guess the question I would ask anyone who does have an existing LTC policy..... "How much would rates have to rise before you 'dumped it'?


Jerilynn:

How much would your health insurance rates have to rise before you dumped it? Nothing seems to increase as much as health insurance.


I withhold answering any questions until you answer mine.*


*ok, I'll answer your's anyway. I've got Medicare, if the premiums got to about $3k a month, I would probably drop it.
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Re: Long term care insurance fading away

Postby Jerilynn » Sun Dec 16, 2012 10:39 pm

stan1 wrote:
How about this answer: I'll know it when I see it. :wink:
Unfortunately I have seen several family members need long term care.
It is a huge burden to ask your spouse, children, and grandchildren to take on, especially if they aren't comfortable spending down family assets for care and try to do it themselves. People are more comfortable filing an insurance claim than spending their own money, I think.

I would never wish a long nursing home stay on anyone, but sometimes it happens even though no one wants it to happen.


A reasonable answer. So, like if the premium per month was more than the cost of one month of current nursing home care, you would drop it, yes? What about if it was half the cost of a month of nursing home care? 1/4? 10% 5% (are you seeing it yet)?

I guess my point is that for people who currently have it or are considering it, it would be wise to take into account the fact that the premiums will rise and MAYBE rise 'too much'.

Course, once someone has made a decision about this, trying to get them to even consider changing their mind is like trying to teach a pig to sing. It won't work and only annoys the pig.

:beer
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Re: Long term care insurance fading away

Postby Allan » Sun Dec 16, 2012 10:45 pm

Jerilynn wrote:
Allan wrote:
Jerilynn wrote:I guess the question I would ask anyone who does have an existing LTC policy..... "How much would rates have to rise before you 'dumped it'?


Jerilynn:

How much would your health insurance rates have to rise before you dumped it? Nothing seems to increase as much as health insurance.


I withhold answering any questions until you answer mine.*


I bought a policy with John Hancock that is paid up for life in 10 years at age 50 (I am 61) to avoid price increase issues. Had a 15% increase in year 9.

I think to answer your question it would depend on costs, benefits, and age.
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Re: Long term care insurance fading away

Postby Jerilynn » Mon Dec 17, 2012 12:42 am

Allan wrote:
I bought a policy with John Hancock that is paid up for life in 10 years at age 50 (I am 61) to avoid price increase issues. Had a 15% increase in year 9.

I think to answer your question it would depend on costs, benefits, and age.


Well, you obviously got in when the gettin' was good. My point is that it ain't so good anymore.
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