Long term care insurance

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills

Long term care insurance

Postby Dutchflier » Sat May 18, 2013 8:57 am

I have person in the financial services industry constantly bringing up the subject of long term care insurance. I always have been financially frugal and have done well ( been with Vanguard for 36 years). Does anyone have an opinion on long term care insurance and what are the best companies to deal with. This person is now recommending Pacific Life. I am a little gunshy since this person is with EJ and that spells "commision" to me. I am 60 and my wife will be 65 later this year both in good health. Any help would be appreciated. Thanks, Dutchflier.
Dutchflier
 
Posts: 2
Joined: Sat May 18, 2013 8:38 am

Re: Long term care insurance

Postby dhodson » Sat May 18, 2013 10:50 am

you should use the search feature. this has been talked about time and time again. If you have more specific questions after looking this over then id repost them.
dhodson
 
Posts: 3497
Joined: Mon May 24, 2010 3:03 pm

Re: Long term care insurance

Postby gerrym51 » Sat May 18, 2013 11:16 am

Dutchflier wrote:I have person in the financial services industry constantly bringing up the subject of long term care insurance. I always have been financially frugal and have done well ( been with Vanguard for 36 years). Does anyone have an opinion on long term care insurance and what are the best companies to deal with. This person is now recommending Pacific Life. I am a little gunshy since this person is with EJ and that spells "commision" to me. I am 60 and my wife will be 65 later this year both in good health. Any help would be appreciated. Thanks, Dutchflier.



as has been said many other posts on this have been done. my wife and i own LTCI bought 10 years ago when she/i 57/52. with insurance of course you pick your poison. it is INSURANCE. as with insurance in general( although not medical which most of us use)-you may not ever need it.

i would say if your plus 1.5 million in assets and you think your unlikely to need it you probably can pay for ltc yourself. although sometimes someone can be in a facility forever most stays are 3 years or less.

the tricky part is if your in that middle ground-500,000 to 1.5 million range. then the cost of self insuring can really dig into your assets. i'm in this middle range that why i have it

as i read on the next post and forgot to mention. LTCI gets underwrited. my wife today would not got it-she barely qualified 10 years ago. it is possbile one or both of you won't qualify anyways
Last edited by gerrym51 on Sat May 18, 2013 11:30 am, edited 1 time in total.
gerrym51
 
Posts: 1650
Joined: Sat Apr 27, 2013 1:44 pm

Re: Long term care insurance

Postby baw703916 » Sat May 18, 2013 11:27 am

I agree with the recommendation above that a search of previous threads on this topic is likely to be informative. One recommendation that is often made on threads on this topic is that if you do decide to buy LTCi, that you go through an independent agent, who isn't committed to just one company's products, and is likely to be familiar with different companies' underwriting practices.
Most of my posts assume no behavioral errors.
User avatar
baw703916
 
Posts: 5815
Joined: Sun Apr 01, 2007 1:10 pm
Location: Northern Virginia

Re: Long term care insurance

Postby mickeyd » Sat May 18, 2013 2:02 pm

I have person in the financial services industry constantly bringing up the subject of long term care insurance.


That's the job (requirement) of a salesman. If you do not buy, his family can not eat. As indicated previously, we have had many discussions and polls on LTCi in the past and will probably have many in the future.

Many of the folks who have had LTC (have a financial stake in keeping the policy) often will recommend that we should all consider obtaining such coverage. There are others of us who believe it to be a big waste of money that can be covered other ways.

I recommend that you dig up those old threads and read as much as you can. You will gain much insight if you do.
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle
User avatar
mickeyd
 
Posts: 3658
Joined: Fri Feb 23, 2007 3:19 pm
Location: Deep in the Heart of South Texas

Re: Long term care insurance

Postby Blues » Sat May 18, 2013 2:14 pm

mickeyd wrote:Many of the folks who have had LTC (have a financial stake in keeping the policy) often will recommend that we should all consider obtaining such coverage. There are others of us who believe it to be a big waste of money that can be covered other ways.


We got our policies about a dozen years ago via WAEPA (http://www.waepa.org) just before the federal government contracted with John Hancock and MetLife to offer LTC (not subsidized by the gov't) to its employees who wished to purchase a policy.

Our policy was originally written by Fortis which was in the John Hancock stable of companies and then was completely taken over by Hancock.

While our policies have inflation cost protection as well as other bells and whistles, we only pay about $1500 yearly for both of us combined.

That said, if the price eventually skyrockets down the road, I'd be inclined to drop the policies regardless of the fact that we'd never have received any actual care or benefits over the years. (And give thanks for not ever needing them to that point.)
“Tactics without strategy is the noise before defeat.” - Sun Tzu | "Everybody has a plan until they get punched in the mouth." - Mike Tyson
User avatar
Blues
 
Posts: 1237
Joined: Wed Dec 10, 2008 11:58 am

Re: Long term care insurance

Postby Honobob » Sat May 25, 2013 3:40 pm

mickeyd wrote:
Many of the folks who have had LTC (have a financial stake in keeping the policy) often will recommend that we should all consider obtaining such coverage. There are others of us who believe it to be a big waste of money that can be covered other ways.


I have life time coverage. The minimum term I would insure for would be 10 years. I don't want to gamble on averages. Would you tell me one or two of the ways it can be covered? Let's say one is 60 and anticipates needing coverage at 80. Annual costs would probably be about $225,000 at that time. I retire at 60 and need to cover my expenses until 80 and need to cover spouses expenses from 80 until 90 while one of use is burning through $225,000 a year on LTC.
It's slowly dawned on me that we won the real estate lottery!
Honobob
 
Posts: 992
Joined: Sat Sep 26, 2009 7:43 pm

Re: Long term care insurance

Postby dhodson » Sat May 25, 2013 3:47 pm

Honobob wrote:
mickeyd wrote:
Many of the folks who have had LTC (have a financial stake in keeping the policy) often will recommend that we should all consider obtaining such coverage. There are others of us who believe it to be a big waste of money that can be covered other ways.


I have life time coverage. The minimum term I would insure for would be 10 years. I don't want to gamble on averages. Would you tell me one or two of the ways it can be covered? Let's say one is 60 and anticipates needing coverage at 80. Annual costs would probably be about $225,000 at that time. I retire at 60 and need to cover my expenses until 80 and need to cover spouses expenses from 80 until 90 while one of use is burning through $225,000 a year on LTC.



He likely doesnt have a time machine and thus cant purchase lifetime coverage and additionally probably cant even find 10 year coverage from a company either.
dhodson
 
Posts: 3497
Joined: Mon May 24, 2010 3:03 pm

Re: Long term care insurance

Postby Honobob » Sat May 25, 2013 4:12 pm

dhodson wrote:
Honobob wrote:
mickeyd wrote:
Many of the folks who have had LTC (have a financial stake in keeping the policy) often will recommend that we should all consider obtaining such coverage. There are others of us who believe it to be a big waste of money that can be covered other ways.


I have life time coverage. The minimum term I would insure for would be 10 years. I don't want to gamble on averages. Would you tell me one or two of the ways it can be covered? Let's say one is 60 and anticipates needing coverage at 80. Annual costs would probably be about $225,000 at that time. I retire at 60 and need to cover my expenses until 80 and need to cover spouses expenses from 80 until 90 while one of use is burning through $225,000 a year on LTC.



He likely doesnt have a time machine and thus cant purchase lifetime coverage and additionally probably cant even find 10 year coverage from a company either.

He thinks LTCi is a waste. He IS NOT in the market for LTCi. My understanding is that life time LTCi is available TODAY through AARP. I AM ASKING HOW mickeyd or someone in the parameters I outlined WOULD cover LTC. Do YOU have a PLAN?
It's slowly dawned on me that we won the real estate lottery!
Honobob
 
Posts: 992
Joined: Sat Sep 26, 2009 7:43 pm

Re: Long term care insurance

Postby gerrym51 » Sat May 25, 2013 4:24 pm

Honobob wrote:
dhodson wrote:
Honobob wrote:
mickeyd wrote:
Many of the folks who have had LTC (have a financial stake in keeping the policy) often will recommend that we should all consider obtaining such coverage. There are others of us who believe it to be a big waste of money that can be covered other ways.


I have life time coverage. The minimum term I would insure for would be 10 years. I don't want to gamble on averages. Would you tell me one or two of the ways it can be covered? Let's say one is 60 and anticipates needing coverage at 80. Annual costs would probably be about $225,000 at that time. I retire at 60 and need to cover my expenses until 80 and need to cover spouses expenses from 80 until 90 while one of use is burning through $225,000 a year on LTC.



He likely doesnt have a time machine and thus cant purchase lifetime coverage and additionally probably cant even find 10 year coverage from a company either.

He thinks LTCi is a waste. He IS NOT in the market for LTCi. My understanding is that life time LTCi is available TODAY through AARP. I AM ASKING HOW mickeyd or someone in the parameters I outlined WOULD cover LTC. Do YOU have a PLAN?



Honobob,

my wife and myself bought 2 ltci policies 10 years age from GE. they are 4 year policies/5 percent inflation/etc. I did read that most companies are eliminating forever policies. I also think life time policies are too expensive. my plan is to use the the 4 year policies to give breathing space to the non institutionalized spouse. time to consult eldercare care lawyer and have coverage to avoid doing things under pressure. although i agree a forever situation could happen most stays are three years or less.
gerrym51
 
Posts: 1650
Joined: Sat Apr 27, 2013 1:44 pm

Re: Long term care insurance

Postby ourbrooks » Sat May 25, 2013 4:31 pm

AARP used to offer LTC through Genworh Financial; as of June 1, 2013, they no longer will offer it.

In fact, I'm pretty sure that no one offers lifetime coverage with increasing payouts and a fixed premium any more. To do that, insurance companies would have to be able to invest premiums at a rate of return which kept up with the increase in medical care costs. With bond rates as low as they are, that would require lots of risky investments.

I agree with Honobob that you ought to have a plan but if that plan includes LTC, the plan also ought to cover how to keep up with steadily increasing LTC premiums.
ourbrooks
 
Posts: 1238
Joined: Fri Nov 13, 2009 4:56 pm

Re: Long term care insurance

Postby gerrym51 » Sat May 25, 2013 4:56 pm

ourbrooks wrote:AARP used to offer LTC through Genworh Financial; as of June 1, 2013, they no longer will offer it.

In fact, I'm pretty sure that no one offers lifetime coverage with increasing payouts and a fixed premium any more. To do that, insurance companies would have to be able to invest premiums at a rate of return which kept up with the increase in medical care costs. With bond rates as low as they are, that would require lots of risky investments.

I agree with Honobob that you ought to have a plan but if that plan includes LTC, the plan also ought to cover how to keep up with steadily increasing LTC premiums.



i've been lucky after almost 11 years we have not had a price increase-so far so good-i would not be surprised to get one though
gerrym51
 
Posts: 1650
Joined: Sat Apr 27, 2013 1:44 pm

Re: Long term care insurance

Postby TomatoTomahto » Sat May 25, 2013 5:11 pm

OP, these discussions tend to get acrimonious. The suggestion to do a forum search is a good one. I can't imagine that any new viewpoints would be expressed in this thread. People pro and con seem to have strongly held opinions, and have voiced them in this forum previously.

Good luck.
User avatar
TomatoTomahto
 
Posts: 3080
Joined: Mon Apr 11, 2011 1:48 pm

Re: Long term care insurance

Postby Honobob » Sat May 25, 2013 5:17 pm

TomatoTomahto wrote: I can't imagine that any new viewpoints would be expressed in this thread.

Why, because "self insurers" have been evasive or cavalier about a "PLAN"? It's not about pro or con LTC. It's about a PLAN. Please provide yours.
It's slowly dawned on me that we won the real estate lottery!
Honobob
 
Posts: 992
Joined: Sat Sep 26, 2009 7:43 pm

Re: Long term care insurance

Postby dhodson » Sat May 25, 2013 5:20 pm

Honobob wrote:
dhodson wrote:
Honobob wrote:
mickeyd wrote:
Many of the folks who have had LTC (have a financial stake in keeping the policy) often will recommend that we should all consider obtaining such coverage. There are others of us who believe it to be a big waste of money that can be covered other ways.


I have life time coverage. The minimum term I would insure for would be 10 years. I don't want to gamble on averages. Would you tell me one or two of the ways it can be covered? Let's say one is 60 and anticipates needing coverage at 80. Annual costs would probably be about $225,000 at that time. I retire at 60 and need to cover my expenses until 80 and need to cover spouses expenses from 80 until 90 while one of use is burning through $225,000 a year on LTC.



He likely doesnt have a time machine and thus cant purchase lifetime coverage and additionally probably cant even find 10 year coverage from a company either.

He thinks LTCi is a waste. He IS NOT in the market for LTCi. My understanding is that life time LTCi is available TODAY through AARP. I AM ASKING HOW mickeyd or someone in the parameters I outlined WOULD cover LTC. Do YOU have a PLAN?


ive explained my plan to you in the past.

and again you would be wrong about AARP but im not surprised.
dhodson
 
Posts: 3497
Joined: Mon May 24, 2010 3:03 pm

Re: Long term care insurance

Postby TomatoTomahto » Sat May 25, 2013 5:21 pm

Honobob wrote:
TomatoTomahto wrote: I can't imagine that any new viewpoints would be expressed in this thread.

Why, because "self insurers" have been evasive or cavalier about a "PLAN"? It's not about pro or con LTC. It's about a PLAN. Please provide yours.

We've been down this path before, Honobob. I have no reason to be "evasive or cavalier," but thank you for proving my point to OP about acrimony.

For the record, my plan is to self-insure.
User avatar
TomatoTomahto
 
Posts: 3080
Joined: Mon Apr 11, 2011 1:48 pm

Re: Long term care insurance

Postby Honobob » Sat May 25, 2013 5:32 pm

TomatoTomahto wrote:
Honobob wrote:
TomatoTomahto wrote: I can't imagine that any new viewpoints would be expressed in this thread.

Why, because "self insurers" have been evasive or cavalier about a "PLAN"? It's not about pro or con LTC. It's about a PLAN. Please provide yours.

We've been down this path before, Honobob. I have no reason to be "evasive or cavalier," but thank you for proving my point to OP about acrimony.

For the record, my plan is to self-insure.

Actually, you've PROVED my point. I think your "self insure" plan included Medicaid and saving "a really, really lot of money". Seems evasive and cavalier to me.
It's slowly dawned on me that we won the real estate lottery!
Honobob
 
Posts: 992
Joined: Sat Sep 26, 2009 7:43 pm

Re: Long term care insurance

Postby Honobob » Sat May 25, 2013 5:37 pm

dhodson wrote:
and again you would be wrong about AARP but im not surprised.

I believe it's ourbrooks that stated that AARP is offering LIFETIME benefit NOW. Prove him/her wrong.
It's slowly dawned on me that we won the real estate lottery!
Honobob
 
Posts: 992
Joined: Sat Sep 26, 2009 7:43 pm

Re: Long term care insurance

Postby TomatoTomahto » Sat May 25, 2013 5:44 pm

Honobob wrote:
TomatoTomahto wrote:
Honobob wrote:
TomatoTomahto wrote: I can't imagine that any new viewpoints would be expressed in this thread.

Why, because "self insurers" have been evasive or cavalier about a "PLAN"? It's not about pro or con LTC. It's about a PLAN. Please provide yours.

We've been down this path before, Honobob. I have no reason to be "evasive or cavalier," but thank you for proving my point to OP about acrimony.

For the record, my plan is to self-insure.

Actually, you've PROVED my point. I think your "self insure" plan included Medicaid and saving "a really, really lot of money". Seems evasive and cavalier to me.

Your memory has failed you. Medicaid???? Not that it's any of your business, but my net worth is closer to 8 digits than it is to 6. I'm not saying that works for everyone, but I think I can self-insure without using Medicaid.

Why are you so aggressive on this issue? There's a great NHL playoff game on now, quite entertaining and I'm going back to it. I recommend it.
User avatar
TomatoTomahto
 
Posts: 3080
Joined: Mon Apr 11, 2011 1:48 pm

Re: Long term care insurance

Postby baw703916 » Sat May 25, 2013 5:44 pm

Here's what I find with a quick search

http://www.aarphealthcare.com/insurance ... rance.html

IMPORTANT UPDATE

Thank you for your interest in AARP® Long Term Care Insurance from Genworth.

Genworth will cease sales of the AARP-branded products effective June 1st, 2013. After that date, AARP endorsed policies will no longer be available to new applicants.

...

All applications for the AARP-branded product must be received by 3:00pm, June 1st 2013. After that date Genworth may be able to assist you with other long term care insurance options.
Most of my posts assume no behavioral errors.
User avatar
baw703916
 
Posts: 5815
Joined: Sun Apr 01, 2007 1:10 pm
Location: Northern Virginia

Re: Long term care insurance

Postby dhodson » Sat May 25, 2013 5:49 pm

Honobob wrote:
dhodson wrote:
and again you would be wrong about AARP but im not surprised.

I believe it's ourbrooks that stated that AARP is offering LIFETIME benefit NOW. Prove him/her wrong.



Wow, you still havent learned how to use google. Every darn time, you do the same thing. You pretend you know what you are talking about and demand i find the information for you. Typically i give you a link but i see someone has already done that. Please learn to use google.
dhodson
 
Posts: 3497
Joined: Mon May 24, 2010 3:03 pm

Re: Long term care insurance

Postby Honobob » Sat May 25, 2013 5:52 pm

TomatoTomahto wrote:
Why are you so aggressive on this issue?

Because, most people DON'T have 8 figure net worths! Mine is similar to yours but I keep MY LTCi because it is such a deal! Is your argument that no one should have LTCi or only the 8 figure net worth people? It would make your participation is these threads a lot more credible if you would clarify that.
It's slowly dawned on me that we won the real estate lottery!
Honobob
 
Posts: 992
Joined: Sat Sep 26, 2009 7:43 pm

Re: Long term care insurance

Postby Honobob » Sat May 25, 2013 5:55 pm

dhodson wrote:
Honobob wrote:
dhodson wrote:
and again you would be wrong about AARP but im not surprised.

I believe it's ourbrooks that stated that AARP is offering LIFETIME benefit NOW. Prove him/her wrong.



Wow, you still havent learned how to use google. Every darn time, you do the same thing. You pretend you know what you are talking about and demand i find the information for you. Typically i give you a link but i see someone has already done that. Please learn to use google.
No, my argument isn't about lifetime, 3 year, 6 year, or even 10 year. Argue with ourbrooks and google all you want. You are making a fool of yourself by NOT addressing the issue being discussed. IMHO.
It's slowly dawned on me that we won the real estate lottery!
Honobob
 
Posts: 992
Joined: Sat Sep 26, 2009 7:43 pm

Re: Long term care insurance

Postby dhodson » Sat May 25, 2013 5:59 pm

i think everyone who has read the previous threads knows who understand this issue better but again you are the person who put the challenge to another poster that it needed to be 10 years of coverage for their plan. The truth is 99% of people cant do it. They cant do it with or without LTCi. Thats the truth period.
dhodson
 
Posts: 3497
Joined: Mon May 24, 2010 3:03 pm

Re: Long term care insurance

Postby Honobob » Sat May 25, 2013 6:04 pm

dhodson wrote:i think everyone who has read the previous threads knows who understand this issue better but again you are the person who put the challenge to another poster that it needed to be 10 years of coverage for their plan. The truth is 99% of people cant do it. They cant do it with or without LTCi. Thats the truth period.

God...is that you? :o
It's slowly dawned on me that we won the real estate lottery!
Honobob
 
Posts: 992
Joined: Sat Sep 26, 2009 7:43 pm

Re: Long term care insurance

Postby nisiprius » Sat May 25, 2013 6:16 pm

1) I don't sell insurance or any other financial product.

2) My wife and I decided that LTCi made sense for us.

3) We bought it about 12 years ago, and I am very happy that we elected the "ten-year payment" plan, so it is fully paid up and we seem to have escaped rate increases.

4) Rate increases and insurers exiting the business are legitimately alarming and I am not sure what we would decide if faced with the decision today.

5) I think the people who talk about "self-insuring" are mostly kidding themselves. First of all, they should not say they are "self-insuring." "Self-insuring" can be an accurate term for a business with thousands of employees; that is, they can choose to do the actuarial stuff and perform the insurance function themselves for a pool of thousands, thus saving the cost over paying an insurer to do it. For a single individual, there is no "self-insurance," there is only a decision to "assume the risk myself." Most of the people who claim to be doing this are not really earmarking money for that purpose, and seem to be basing their mental arithmetic on the average length of stay and ignoring the very nasty long tail on the distribution. Certainly, someone in the $10 million net worth ballpark could treat a 12-year nursing home stay at $70,000/year, increasing 5% per year, as a risk they could simply assume.

6) In 2012, Consumer Reports opined as follows. It is not necessarily the last word but it is from a source I believe to be well-informed and disinterested.
Q: Is long-term care insurance a waste of money or will it protect my 401(k)?"

A: It depends on whether whether you can afford the coverage and the level of risk you're willing to take. Financial planners have told us that people with a net worth of less than $200,000 to $300,000 (excluding a house and depending on the regional cost of care) could probably not afford a policy and should plan to rely on family or government programs for help. Those with assets of $2 million of more should be able to pay for care. People in between are the most likely candidates for coverage. Consider consulting a fee-only financial advisor for unbiased advice. To find one near you, go to napfa.org
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
nisiprius
Advisory Board
 
Posts: 26410
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Long term care insurance

Postby ourbrooks » Sat May 25, 2013 6:21 pm

Let me repeat: AARP is not offering LTC coverage with a lifetime benefit; in fact, as of June 1, they are not offering LTC coverage of any kind.

ourbrooks wrote:AARP used to offer LTC through Genworh Financial; as of June 1, 2013, they no longer will offer it.

In fact, I'm pretty sure that no one offers lifetime coverage with increasing payouts and a fixed premium any more. To do that, insurance companies would have to be able to invest premiums at a rate of return which kept up with the increase in medical care costs. With bond rates as low as they are, that would require lots of risky investments.

I agree with Honobob that you ought to have a plan but if that plan includes LTC, the plan also ought to cover how to keep up with steadily increasing LTC premiums.
ourbrooks
 
Posts: 1238
Joined: Fri Nov 13, 2009 4:56 pm

Re: Long term care insurance

Postby Honobob » Sat May 25, 2013 6:23 pm

gerrym51 wrote:

Honobob,

my wife and myself bought 2 ltci policies 10 years age from GE. they are 4 year policies/5 percent inflation/etc. I did read that most companies are eliminating forever policies. I also think life time policies are too expensive. my plan is to use the the 4 year policies to give breathing space to the non institutionalized spouse. time to consult eldercare care lawyer and have coverage to avoid doing things under pressure. although i agree a forever situation could happen most stays are three years or less.

gerrym51
Sounds like a good plan. The only reason I suggest to buy as much as you can is that it is easier to give up coverage for dollars if needed than to acquire more coverage. I "got lucky" to have a lifetime coverage plan. I think I made my own luck by making a decision when I did. I know people who put it off and then were locked out. I'm with CalPers and they want to "give me a break" if I relinquish my lifetime coverage but won't go long term (ten years to me) and keep the inflation protection. Even with the higher rates it is a screaming deal to me. I hope I never need it.
Last edited by Honobob on Sat May 25, 2013 6:30 pm, edited 1 time in total.
It's slowly dawned on me that we won the real estate lottery!
Honobob
 
Posts: 992
Joined: Sat Sep 26, 2009 7:43 pm

Re: Long term care insurance

Postby 2stepsbehind » Sat May 25, 2013 6:26 pm

Anybody have a sense of what the difference in premiums would be between the AARP lifetime plan and a 4 year plan? Assume a single male in his early 60s.
2stepsbehind
 
Posts: 572
Joined: Wed Jun 20, 2007 10:03 am

Re: Long term care insurance

Postby ourbrooks » Sat May 25, 2013 6:33 pm

The basic problem I have with LTC insurance is that I can't figure out a business model for it that could possibly keep rates constant over a long period of time. If payout amounts are increasing 5% a year, then the insurance company has to come up with 5% more money each year. Possibly, they have whizz bang investments paying 10% or more. If so, I'd like to have some idea of what they are. Possibly, their actual payout rate is much lower than they advertise and they're actually denying most claims while raking in premiums; I'd like to know that too.

In the absence of other mechanisms, if payouts are increasing 5% a year, then eventually they'll have to increase premiums to keep up. As the price of cars has risen, the price of full replacement policies has risen as well. It can't be any other way for long term care as long as insurance companies are for profit businesses. (For government sponsored plans, it's a different story but most of us can't buy those, and I suspect they'll be going away soon as well.)

This doesn't mean people shouldn't buy LTC. In fact, it may pay to buy it up until a ripe old age, when the likelihood of staying a nursing home for a long period of time has gotten low, and then drop it. What it does mean is that any retirement plan needs to cope with increasing health care costs and a plan including LTC is not immune.
ourbrooks
 
Posts: 1238
Joined: Fri Nov 13, 2009 4:56 pm

Re: Long term care insurance

Postby gerrym51 » Sat May 25, 2013 6:40 pm

2stepsbehind wrote:Anybody have a sense of what the difference in premiums would be between the AARP lifetime plan and a 4 year plan? Assume a single male in his early 60s.



you'd actually have to price it with insurance provider. also from what i was reading in earlier post AARP is going to stop "sponsering ltci". they actually never sold ltci but sold their name to various ltci providers over the years. genworth is their currrent provider who is stopping policies aarp policies june 1.

AARP is running out of companies to sell their name 2. I think they've been thru at least 5 over the years.

IF your going to buy a policy-Genworth-has been in it the longest and probably(notice i said probably) will be one of the last to give it up.
gerrym51
 
Posts: 1650
Joined: Sat Apr 27, 2013 1:44 pm

Re: Long term care insurance

Postby gerrym51 » Sat May 25, 2013 7:34 pm

2stepsbehind wrote:Anybody have a sense of what the difference in premiums would be between the AARP lifetime plan and a 4 year plan? Assume a single male in his early 60s.



most states have a partnership arrangement with ltci plans and medicaid. realisticaly unless you have a lifetime plan if your in a long time your eventually will end up on medicaid. the partnership plan enables some assets to be sheltered from medicaid. i would go to your states website and check out the requirements for a medicaid approved ltci plan.

then if your single but have a family member who can do legwork for you the policy gives them time to consult an eldercare attorney for you then go from there.
gerrym51
 
Posts: 1650
Joined: Sat Apr 27, 2013 1:44 pm

Re: Long term care insurance

Postby TomatoTomahto » Sat May 25, 2013 7:35 pm

nisiprius wrote:5) I think the people who talk about "self-insuring" are mostly kidding themselves. First of all, they should not say they are "self-insuring." "Self-insuring" can be an accurate term for a business with thousands of employees; that is, they can choose to do the actuarial stuff and perform the insurance function themselves for a pool of thousands, thus saving the cost over paying an insurer to do it. For a single individual, there is no "self-insurance," there is only a decision to "assume the risk myself." Most of the people who claim to be doing this are not really earmarking money for that purpose, and seem to be basing their mental arithmetic on the average length of stay and ignoring the very nasty long tail on the distribution. Certainly, someone in the $10 million net worth ballpark could treat a 12-year nursing home stay at $70,000/year, increasing 5% per year, as a risk they could simply assume.


1. Okay, it is not "self-insuring" but rather "assuming the risk myself." Honestly, I think you know what I meant. The term "self-insure" is in common usage to refer to a situation like this, although it is technically inaccurate.
2. It does not require a net worth of $10 million to assume the risk myself. FWIW, my net worth is self-described as closer to 8 digits than to 6 digits; I think $5.5 Million meets that definition and is only slightly more than half of $10 million.
3. The $70,000 figure you cite is not in addition to the expenses I plan for, but to a great extent, is in lieu of them. It's easy to forget, but obvious when you think of it, that the $70,000 I might require to pay for care is partially offset by the vacation I won't be able to take, the hobby costs I'm not indulging in, the restaurants I'm no longer able to go to, the new car I no longer purchase, etc. Not to be a wise-guy, but it might cost me less to be in a facility than to be gallivanting around.
4. Consumer Reports thinks $2 million is enough to assume the risk oneself. I'm in no position to disagree, but I think it's clear that by the time you have at least liquid $4 million or so, you can assume the risk yourself without too much worry.
5. Why this seems to be so acrimonious is beyond me.

EDITED TO ADD: PS Rangers lost. I'm going to watch the Detroit - Chicago game now :D
User avatar
TomatoTomahto
 
Posts: 3080
Joined: Mon Apr 11, 2011 1:48 pm

Re: Long term care insurance

Postby bbqguru » Sat May 25, 2013 8:49 pm

I believe that NY Life is still selling lifetime policies.

My wife and I purchased policies three years ago and went with lifetime benefit and 5% compounding.
bbqguru
 
Posts: 25
Joined: Sat Sep 17, 2011 8:31 pm


Return to Personal Finance (Not Investing)

Who is online

Users browsing this forum: asif408, chrysogonus, Dale_G, Engineer, Flashes1, Flobes, gardemanger, jared, JW Nearly Retired, linakin, markcoop, marknhj, midareff, N52570, newbie001, placeholder, Roverdog, Stankee, Utahdogowner and 102 guests