[If over 50] Do you prepare for long term care
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[If over 50] Do you prepare for long term care
This poll is designed to look at how people prepare for long term care
Medicare is a typo for medicaid
Medicare is a typo for medicaid
Re: [If over 50] Do you prepare for long term care
I retitled your thread, as the poll is titled "If are over 50" - readers might miss that part. To change the thread title, just edit the Subject: line in Post #1. Don't change the poll or it will reset.
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Re: [If over 50] Do you prepare for long term care
I remember hearing a presentation by an insurance agent at my employer's 10 years ago and I asked the question, "Who doesn't need this kind of insurance?" and got the answer "Everyone needs it" and I said, "So someone with $10 million of ready assets needs this?" and the answer was "Absolutely."
Who would anyone buy insurance from someone who is either a liar or an idiot.
Who would anyone buy insurance from someone who is either a liar or an idiot.
The market goes up, the market goes down.
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Re: [If over 50] Do you prepare for long term care
I voted no special plans, but I do have LTD until 70 1/2
unless I lose my job, and I expect to have enough by the time I retire,
which is hopefully before 70 1/2.
LTC insurance has always seemed like too much of a gamble.
You never know if it's any good until you need it, and I've seen people
priced out as they age, and then they need it. I prefer to save for it,
and I'll at least have the premiums that I would have paid.
It wasn't that long ago that people had no health ins., no life ins.,
no old age pension, and worked until they couldn't anymore,
and the human race survived. In fact, that is the way it still is
in most of the world.
unless I lose my job, and I expect to have enough by the time I retire,
which is hopefully before 70 1/2.
LTC insurance has always seemed like too much of a gamble.
You never know if it's any good until you need it, and I've seen people
priced out as they age, and then they need it. I prefer to save for it,
and I'll at least have the premiums that I would have paid.
It wasn't that long ago that people had no health ins., no life ins.,
no old age pension, and worked until they couldn't anymore,
and the human race survived. In fact, that is the way it still is
in most of the world.
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Re: [If over 50] Do you prepare for long term care
LTC insurance is like house insurance. You may never need it but will appreciate it if you have to use it.
Felix is a wonderful, wonderful cat.
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Re: [If over 50] Do you prepare for long term care
Thank youLadyGeek wrote:I retitled your thread, as the poll is titled "If are over 50" - readers might miss that part. To change the thread title, just edit the Subject: line in Post #1. Don't change the poll or it will reset.
I found I could not edit the medicare typo
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Re: [If over 50] Do you prepare for long term care
Most people don't receive long-term care services (6% of the U.S. population over 65, per the CDC Long-Term Care Services in the United States: 2013 Overview and the U.S. Census).
Most of those who do end up in nursing homes pay down their assets until they are funded by Medicaid.
Most of those who do end up in nursing homes pay down their assets until they are funded by Medicaid.
"I'm an indexer. I own the market. And I'm happy." (John Bogle, "BusinessWeek", 8/17/07) ☕ Maritime signal flag W - Whiskey: "I require medical assistance."
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Re: [If over 50] Do you prepare for long term care
You are confusing annual with lifetime rates. e.g. If the average life expectancy over age 65 is 20 years and each year 6% of the elderly is in care the lifetime probability depends on the average length of stay. If it was 1 year the probability of needing care is near 100% if its 2 years the probability is 50 %whaleknives wrote:Most people don't receive long-term care services (6% of the U.S. population over 65, per the CDC Long-Term Care Services in the United States: 2013 Overview and the U.S. Census).
Most of those who do end up in nursing homes pay down their assets until they are funded by Medicaid.
Recent projections estimate that over two-thirds of individuals who reach age 65 will need long-term care services during their
lifetime (Kemper, Komisar, & Alecxih, 2005–2006) Page 3
Last edited by Professor Emeritus on Wed Aug 06, 2014 8:05 pm, edited 1 time in total.
Re: [If over 50] Do you prepare for long term care
It's in the Poll Creation tab, just change the poll content. I'll leave it up to you whether or not to fix it now. There are only 25 votes so far. PM me if you need further assistance (and are willing to reset the poll).Professor Emeritus wrote:Thank youLadyGeek wrote:I retitled your thread, as the poll is titled "If are over 50" - readers might miss that part. To change the thread title, just edit the Subject: line in Post #1. Don't change the poll or it will reset.
I found I could not edit the medicare typo
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Re: [If over 50] Do you prepare for long term care
Different poll questions and different age cut-offs, but there was similar poll late last year.
http://www.bogleheads.org/forum/viewtop ... 2&t=125325
Similar results, so far.
A majority of Bogleheads decide not to go for LTC.
http://www.bogleheads.org/forum/viewtop ... 2&t=125325
Similar results, so far.
A majority of Bogleheads decide not to go for LTC.
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Re: [If over 50] Do you prepare for long term care
This has nothing to do with life expectancies at any age, or projected estimates. The number of people 65 or over is known, and the number of people receiving long-term care is known.Professor Emeritus wrote:You are confusing annual with lifetime rates. e.g. If the average life expectancy over age 65 is 20 years and each year 6% of the elderly is in care the lifetime probability depends on the average length of stay. If it was 1 year the probability of needing care is near 100% if its 2 years the probability is 50 %.
Your maximum health care cost will be in your last year of life.
Last edited by whaleknives on Wed Aug 06, 2014 8:13 pm, edited 1 time in total.
"I'm an indexer. I own the market. And I'm happy." (John Bogle, "BusinessWeek", 8/17/07) ☕ Maritime signal flag W - Whiskey: "I require medical assistance."
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Re: [If over 50] Do you prepare for long term care
And 6 % of them can die each year but eventually they all die 100% will die even if 6% die this yearwhaleknives wrote:This has nothing to do with life expectancies at any age, or projected estimates. The number of people 65 or over is known, and the number of people receiving long-term care is known.Professor Emeritus wrote:You are confusing annual with lifetime rates. e.g. If the average life expectancy over age 65 is 20 years and each year 6% of the elderly is in care the lifetime probability depends on the average length of stay. If it was 1 year the probability of needing care is near 100% if its 2 years the probability is 50 %.
Don't confuse annual useage with lifetime rates
Recent projections estimate that over two-thirds of individuals who reach age 65 will need long-term care services during their
lifetime (Kemper, Komisar, & Alecxih, 2005–2006) Page 3
Re: [If over 50] Do you prepare for long term care
The question is not whether or not you will need LTC, but rather what is the total cost of that care. Many of those 2/3's will get care from family, or have relatively short stays in LTC facilities.
The gotcha is the tail risk.
The gotcha is the tail risk.
Re: [If over 50] Do you prepare for long term care
I have noted my concerns with LTCinsurance in many other threads.
Re: [If over 50] Do you prepare for long term care
I would have purchased LTC insurance, but was turned down at age 65 and 68. (If you want LTC insurance, don't wait too long). My wife does have one, however. I don't have a long term plan, but I could handle 4 years in a nursing home okay,($75,000 a year) but longer than that in a nursing home would hurt my spouse's economic future. If I can stay within the average nursing home stay, it looks like I will be okay.
From The American Assn. of Long Term Care http://www.aaltci.org/ is this table (2008 statistics):
Average Length of Stays (Nursing Homes)
5 years or more 12.0%
3 to 5 years 12.0%
1 to 3 years 30.3%
6 to 12 months 14.2%
3 to 6 months 10.0%
less than 3 months 20.0%
Average Length Of Stay in Years
Female 2.6 years
Male 2.3 years
Married 1.6 years
Single / Never Married 3.8 years
Widowed 2.3 years
Divorced / Separated 2.7 years
From The American Assn. of Long Term Care http://www.aaltci.org/ is this table (2008 statistics):
Average Length of Stays (Nursing Homes)
5 years or more 12.0%
3 to 5 years 12.0%
1 to 3 years 30.3%
6 to 12 months 14.2%
3 to 6 months 10.0%
less than 3 months 20.0%
Average Length Of Stay in Years
Female 2.6 years
Male 2.3 years
Married 1.6 years
Single / Never Married 3.8 years
Widowed 2.3 years
Divorced / Separated 2.7 years
Unless you try to do something beyond what you have already mastered you will never grow. (Ralph Waldo Emerson)
Re: [If over 50] Do you prepare for long term care
I bought a long term care policy with John Hancock at age 50 (I am 63), it has an inflation rider. It was a paid up in 10 year policy, so I no longer pay premiums. I think John Hancock is a solid company but then I really don't know. If these types of policies (10 yr pay) are available I would recommend them, premiums are higher but it is really a good feeling once it is paid in full.
Allan
Allan
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Re: [If over 50] Do you prepare for long term care
These choices aren't mutually exclusive -- why not let people choose all that apply?
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Re: [If over 50] Do you prepare for long term care
I'm 64 and a half and am ignoring long term care issues.
I have more exciting things to be concerned about for the next decade or two.
Call me foolish if you like, it won't bother me...
I have more exciting things to be concerned about for the next decade or two.
Call me foolish if you like, it won't bother me...
Attempted new signature...
Re: [If over 50] Do you prepare for long term care
I consulted with a broker about LTCI when I turned 50, and I crunched the numbers. I'm generally a pro-insurance kind of person, but the premium situation is just too volatile for me to want to commit to it, and I came out ahead self-insuring in most scenarios.
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Re: [If over 50] Do you prepare for long term care
Most of the estimates are in the 5% range for catastrophic expenses (more than 3 years)Ged wrote:The question is not whether or not you will need LTC, but rather what is the total cost of that care. Many of those 2/3's will get care from family, or have relatively short stays in LTC facilities.
The gotcha is the tail risk.
I should perhaps explain what I mean by self insurance. Self insurance treats the risk the way an insurance company would, by setting aside adequate reserves.
I calculated what it would take to pay for 6 years of long term care. I subtracted pensions and SS, and I Set aside that amount in a conservative investment . (I chose Wellesley and added 10% to account for market fluctuations) TIPS would be even more conservative. I can buy a lifetime annuity with that money if I chose if someone goes into a LTC facility.
This money is treated as an asset but not part of the Portfolio .
Last edited by Professor Emeritus on Thu Aug 07, 2014 8:58 am, edited 1 time in total.
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Re: [If over 50] Do you prepare for long term care
Good you brought this to our attention because Medicare "does not pay the largest part of long-term care services or personal care" (from referenced link below)Professor Emeritus wrote:This poll is designed to look at how people prepare for long term care
Medicare is a typo for medicaid
http://longtermcare.gov/medicare-medica ... /medicare/
The surest way to know the future is when it becomes the past.
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Re: [If over 50] Do you prepare for long term care
Of course and I was embarrassed by the typing error My apologiescheese_breath wrote:Good you brought this to our attention because Medicare "does not pay the largest part of long-term care services or personal care" (from referenced link below)Professor Emeritus wrote:This poll is designed to look at how people prepare for long term care
Medicare is a typo for medicaid
http://longtermcare.gov/medicare-medica ... /medicare/
Re: [If over 50] Do you prepare for long term care
Most of the people who have long term care insurance are, in fact, to a great extent self-insuring. According to the Association for Long-term Care Insurance, a "good" level policy provides $164,000 in total benefits. This is less than two years nursing home expense coverage at current rates. If someone enters a nursing home, there's more than a 1 in 4 chance that they'll stay longer than two years and will need substantial additional resources to pay for their care.
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Re: [If over 50] Do you prepare for long term care
I have an LTC policy but it is not enough to cover the full cost of care. Still, it would be a significant income increase and with it I can self-insure the rest.
Hope I never need it. Medicare covers a short hospice stay and that's second best to dying in your sleep.
Hope I never need it. Medicare covers a short hospice stay and that's second best to dying in your sleep.
16% cash 49% stock 35% bond. Retired, w/d rate 2.5%
Re: [If over 50] Do you prepare for long term care
imgritz wrote:LTC insurance is like house insurance. You may never need it but will appreciate it if you have to use it.
Really? Buying a homeowners policy is much simpler and far cheaper. It is also not as fraught with fine print generally. It is that fine print and low payouts, coupled with unknown and crazy rate hikes that scare people off. Many that have it do so for peace of mind, not because it is necessarily a good financial move. Many of those who find they need it will be let down, unlike with homeowners insurance.
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Re: [If over 50] Do you prepare for long term care
None of the above fits me.
I have just purchased 20-year term life insurance with a "living needs benefit" that allows me to cash out my policy (with a modest actuarial reduction) if I am in a nursing home for 6 months with no expectation of leaving alive.
This seems like a much better arrangement than the extremely poor LTCI contracts that are currently available, and since it is actually cheaper than those contracts, I effectively get "free" life insurance!
I have just purchased 20-year term life insurance with a "living needs benefit" that allows me to cash out my policy (with a modest actuarial reduction) if I am in a nursing home for 6 months with no expectation of leaving alive.
This seems like a much better arrangement than the extremely poor LTCI contracts that are currently available, and since it is actually cheaper than those contracts, I effectively get "free" life insurance!
In theory, theory and practice are identical. In practice, they often differ.
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Re: [If over 50] Do you prepare for long term care
IMHO, stastics from reports like this and LTC salespaople this mislead people.Professor Emeritus wrote:You are confusing annual with lifetime rates. e.g. If the average life expectancy over age 65 is 20 years and each year 6% of the elderly is in care the lifetime probability depends on the average length of stay. If it was 1 year the probability of needing care is near 100% if its 2 years the probability is 50 %whaleknives wrote:Most people don't receive long-term care services (6% of the U.S. population over 65, per the CDC Long-Term Care Services in the United States: 2013 Overview and the U.S. Census).
Most of those who do end up in nursing homes pay down their assets until they are funded by Medicaid.
Recent projections estimate that over two-thirds of individuals who reach age 65 will need long-term care services during their
lifetime (Kemper, Komisar, & Alecxih, 2005–2006) Page 3
Most policies use your inability to perform certain "activities of daily living" (ADLs) as one trigger to determine if you are eligible for policy benefits. The ADLs include (1) bathing; (2) continence; (3) dressing; (4) eating; (5) toileting and (6) transferring. Before paying benefits, insurers usually require certification by a physician or licensed health care practitioner that you cannot perform certain ADLs because of physical or cognitive impairments. Most long term care insurance policies will pay benefits when you cannot do 2 out of 6 of the activities of daily living, but this number will be determined by your policy.
When statistics from reports like these are used, they normally include those who need help with only one ADL & insurance policies nornmally will pay for only help is needed with 2 ADLs or more. So, when a LTC salesperson sayes 'X' number of people need long term care services ... that is not the number who will get paid under their policy.
Do your due deligence.
"Borrow money from pessimists -- they don't expect it back"
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Re: [If over 50] Do you prepare for long term care
I chose that we could self insure although it really depends upon how long. Our assets could withstand what I understand to be average nursing home stays by both of us, but would not handle extended stays (8 to 10 years). Regardless, I did not see LTC as a good buy when we could have bought it. Of course, some of those companies went out of business and others have canceled policies, so we are probably best where we are.
Re: [If over 50] Do you prepare for long term care
the ltc posts go like this!
the one's who have bought it and think it's needed come up with reasons why one should buy it.
the one's who have not bought it or intend to come up with reasons not to buy it.
the neverending story
the one's who have bought it and think it's needed come up with reasons why one should buy it.
the one's who have not bought it or intend to come up with reasons not to buy it.
the neverending story
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Re: [If over 50] Do you prepare for long term care
I didorlandoman wrote:IMHO, stastics from reports like this and LTC salespaople this mislead people.Professor Emeritus wrote:You are confusing annual with lifetime rates. e.g. If the average life expectancy over age 65 is 20 years and each year 6% of the elderly is in care the lifetime probability depends on the average length of stay. If it was 1 year the probability of needing care is near 100% if its 2 years the probability is 50 %whaleknives wrote:Most people don't receive long-term care services (6% of the U.S. population over 65, per the CDC Long-Term Care Services in the United States: 2013 Overview and the U.S. Census).
Most of those who do end up in nursing homes pay down their assets until they are funded by Medicaid.
Recent projections estimate that over two-thirds of individuals who reach age 65 will need long-term care services during their
lifetime (Kemper, Komisar, & Alecxih, 2005–2006) Page 3
Most policies use your inability to perform certain "activities of daily living" (ADLs) as one trigger to determine if you are eligible for policy benefits. The ADLs include (1) bathing; (2) continence; (3) dressing; (4) eating; (5) toileting and (6) transferring. Before paying benefits, insurers usually require certification by a physician or licensed health care practitioner that you cannot perform certain ADLs because of physical or cognitive impairments. Most long term care insurance policies will pay benefits when you cannot do 2 out of 6 of the activities of daily living, but this number will be determined by your policy.
When statistics from reports like these are used, they normally include those who need help with only one ADL & insurance policies nornmally will pay for only help is needed with 2 ADLs or more. So, when a LTC salesperson sayes 'X' number of people need long term care services ... that is not the number who will get paid under their policy.
Do your due deligence.
the Source iis at http://www.alisprotect.com/UncertainFuture.pdf
A specific level of disability is added to each in-
dividual’s information at age 65 based on the
probabilities of being in each of four different dis-
ability categories—no disability, limitations in
IADLs only, limitation in one ADL, and limita-
tions in two or more ADLs—where the probabil-
ities depend on sex, marital status, and whether
the person is receiving benefits under the Social
Security disability insurance program. The proba-
bilities are based on estimates of prevalence from
the National Long-Term Care Survey.
Nothing to do with insurance, these are direct measures
Re: [If over 50] Do you prepare for long term care
I like your attitude. When people are talking about SWRs of ~2%, then I think it likely they can handle high expenses during the last two to three years of life. Living below your means for decades usually takes care of possible LTC expenses.The Wizard wrote:I'm 64 and a half and am ignoring long term care issues.
I have more exciting things to be concerned about for the next decade or two.
Call me foolish if you like, it won't bother me...
Re: [If over 50] Do you prepare for long term care
When you ever need long term care, if you have LTCi you'll also need someone who is in good enough shape to go through the process of collecting on the insurance and setting that up with the nursing home. For that matter you'll need someone who can do all the necessaries to get you enrolled in Nursing Care U. All that stuff. What I really need is long term care facilitator insurance, and they don't sell that.
We don't know where we are, or where we're going -- but we're making good time.
Re: [If over 50] Do you prepare for long term care
While not in the target age bracket, I'd still like to add my 2 cents.
Depending on the policy, long term care is not just about being in a nursing home. There's a huge gap for people who need some assistance (and could go into an assisted living facility), but do not need the medical care provided in nursing homes. Medicare/medicaid will pay for a nursing home, but not for assisted living (at least that was what I found when I was dealing with this for my great uncle). And at some point it won't even pay for the nursing home. Depending on someone's assets, options can disappear very quickly. In rural Wisconsin, assisted living was $2500/month and the nursing home was $7000/month - all of which he payed out of pocket because he was too stubborn to do the physical therapy required by medicare to cover any portion.
I worry about my loved ones (who have limited assets) being forced into a nursing home when they would be better off in assisted living. As my great uncle said "It's hard to go eat with all those dead people". Whereas in assisted living facilities people can have a great social life and feel much more independent by getting help with the few ADLs they need assistance with.
Depending on the policy, long term care is not just about being in a nursing home. There's a huge gap for people who need some assistance (and could go into an assisted living facility), but do not need the medical care provided in nursing homes. Medicare/medicaid will pay for a nursing home, but not for assisted living (at least that was what I found when I was dealing with this for my great uncle). And at some point it won't even pay for the nursing home. Depending on someone's assets, options can disappear very quickly. In rural Wisconsin, assisted living was $2500/month and the nursing home was $7000/month - all of which he payed out of pocket because he was too stubborn to do the physical therapy required by medicare to cover any portion.
I worry about my loved ones (who have limited assets) being forced into a nursing home when they would be better off in assisted living. As my great uncle said "It's hard to go eat with all those dead people". Whereas in assisted living facilities people can have a great social life and feel much more independent by getting help with the few ADLs they need assistance with.
Re: [If over 50] Do you prepare for long term care
When you visit a few nursing homes, you soon learn that there are lots of folks there who could fare quite well in assisted living, or even independent living. Ran across one gal in a nursing home I visited who actually came and went every day like it was a hotel. They are there for financial reasons, not medical reasons. If you are broke, you're eligible for Medicaid but you can only collect Medicaid in a nursing home. Would be great if there was a way for folks who are in an assisted living facility to remain there when they go broke, as long as they're medically able to live there and don't need more intensive care.nfs wrote:While not in the target age bracket, I'd still like to add my 2 cents.
Depending on the policy, long term care is not just about being in a nursing home. There's a huge gap for people who need some assistance (and could go into an assisted living facility), but do not need the medical care provided in nursing homes. Medicare/medicaid will pay for a nursing home, but not for assisted living (at least that was what I found when I was dealing with this for my great uncle). And at some point it won't even pay for the nursing home. Depending on someone's assets, options can disappear very quickly. In rural Wisconsin, assisted living was $2500/month and the nursing home was $7000/month - all of which he payed out of pocket because he was too stubborn to do the physical therapy required by medicare to cover any portion.
I worry about my loved ones (who have limited assets) being forced into a nursing home when they would be better off in assisted living. As my great uncle said "It's hard to go eat with all those dead people". Whereas in assisted living facilities people can have a great social life and feel much more independent by getting help with the few ADLs they need assistance with.
We don't know where we are, or where we're going -- but we're making good time.
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Re: [If over 50] Do you prepare for long term care
I'm not worried about 2 or 3 years of LTC. I'm worried about being like my mother who has been in a nursing home since 2006. She just turned 90 and could live another 10 years. Her mind is long gone, but she has no physical issues. At about $70K/yr, the cost of her care is over $560K.MP1233 wrote:I like your attitude. When people are talking about SWRs of ~2%, then I think it likely they can handle high expenses during the last two to three years of life. Living below your means for decades usually takes care of possible LTC expenses.The Wizard wrote:I'm 64 and a half and am ignoring long term care issues.
I have more exciting things to be concerned about for the next decade or two.
Call me foolish if you like, it won't bother me...
10 years at $70K to $80K/yr could impoverish the healthy spouse.
Re: [If over 50] Do you prepare for long term care
Single, no kids, history of Alzheimer's in the family. I have a gold package LTCi policy with compounding and no limit on how many years I may collect. Got it while in my 50s. I figure if I make it to 85 and am still of sound mind, I can downgrade to a 3- or 5-year policy. LTCi is not appropriate for everyone, but I determined that it is for me.
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Re: [If over 50] Do you prepare for long term care
I'm sorry to hear about that.ddunca1944 wrote:
I'm not worried about 2 or 3 years of LTC. I'm worried about being like my mother who has been in a nursing home since 2006. She just turned 90 and could live another 10 years. Her mind is long gone, but she has no physical issues. At about $70K/yr, the cost of her care is over $560K.
10 years at $70K to $80K/yr could impoverish the healthy spouse.
For those that do have LTC insurance, what is the typical duration of benefit for a LTC policy, if any?
Re: [If over 50] Do you prepare for long term care
If a good affordable ltci product were offered, I would buy it. What I have seen from those I know who have it are huge rate increases that people could not forsee or budget for, lack of full inflation protection, difficult time collecting when needed and a very high priced product. Insurance is to mitigate risk but much of the risk is being passed to the customer. I have no interest in such a poor product. Not only that, but many companies are dropping out of the market, so without competition, the situation is unlikely to improve.
In most markets, consumers can look for value. With insurance, the cost of the product sky rockets and people continue to buy it. There seems to be no thought of what you are actually getting for your money.
In most markets, consumers can look for value. With insurance, the cost of the product sky rockets and people continue to buy it. There seems to be no thought of what you are actually getting for your money.
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Re: [If over 50] Do you prepare for long term care
This is a topic very close to home.
My spouse and I have decided to "self-insure" because we think we'll be able to do it. But I'm a bit nervous because of what I'm being hit with right now with my dad and both in-laws.
My mom and dad have a Genworth plan that was written 12 years ago and my mom's started using it for my dad. It is a very, very tough period for her and that LTC policy is amazing. So amazing, in fact, that no one is writing policies like that anymore. I'd buy one in a second if I could. Genworth has been tripping over themselves to make things as painless for my mom as possible and the benefits are truly outstanding. My parents are of moderate means so shelling out cash from their pocket books could happen but it would hurt.
My in-laws were offered the exact same policy the year my parents got theirs. We even offered to pay all of their premiums. They could not have cared less and threw the opportunity away. Now, my mother-in-law is in a dementia unit as my father-in-law watched his lifetime savings rapidly being depleted. Then, my father-in-law just recently had a stroke had cannot go home. Obviously, the situation is catastrophic.
I'm not an expert here and I wouldn't expect anyone to take my advice. Statistics due apply to society at large, and most will not have what happened above happen to them. But they certainly happened here.
Morningstar has done several columns on this. From what I've read, those with assets above $2M might be able to self-insure while those with assets between $500,000-$2M might want to really consider LTCI. Those with less will qualify for Medicaid at some point which will pay for nursing home costs if necessary. Whether these breakpoints are accurate or not, I don't know.
My spouse and I have decided to "self-insure" because we think we'll be able to do it. But I'm a bit nervous because of what I'm being hit with right now with my dad and both in-laws.
My mom and dad have a Genworth plan that was written 12 years ago and my mom's started using it for my dad. It is a very, very tough period for her and that LTC policy is amazing. So amazing, in fact, that no one is writing policies like that anymore. I'd buy one in a second if I could. Genworth has been tripping over themselves to make things as painless for my mom as possible and the benefits are truly outstanding. My parents are of moderate means so shelling out cash from their pocket books could happen but it would hurt.
My in-laws were offered the exact same policy the year my parents got theirs. We even offered to pay all of their premiums. They could not have cared less and threw the opportunity away. Now, my mother-in-law is in a dementia unit as my father-in-law watched his lifetime savings rapidly being depleted. Then, my father-in-law just recently had a stroke had cannot go home. Obviously, the situation is catastrophic.
I'm not an expert here and I wouldn't expect anyone to take my advice. Statistics due apply to society at large, and most will not have what happened above happen to them. But they certainly happened here.
Morningstar has done several columns on this. From what I've read, those with assets above $2M might be able to self-insure while those with assets between $500,000-$2M might want to really consider LTCI. Those with less will qualify for Medicaid at some point which will pay for nursing home costs if necessary. Whether these breakpoints are accurate or not, I don't know.
Re: [If over 50] Do you prepare for long term care
So, what are the caps on your LTCi? Many policies are good for 2-3 years and they pay a fixed per diem rate. For purposes of argument, let's say that's $175/day or about $5K/ month. The total payout would be limited to let's say about $120K - $180K. If these figures are correct, then I can self-insure by putting aside $120K - $180K in TIPS (which provide inflation protection). If I never use it, it goes to my estate. Is there any reason that anybody who has sufficient assets to do that should purchase LTCi?
We don't know where we are, or where we're going -- but we're making good time.
- Artsdoctor
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Re: [If over 50] Do you prepare for long term care
My parents' maximum doesn't have a financial cap. Genworth will pay for 10 years of long-term care and they can split it anyway they want (8 years for Mom, 2 years for Dad, for example). It's indexed to inflation. Right now, Genworth will pay $275 per day and then that is indexed to CPU (and don't ask me which CPU!). So technically, I suppose, it would be $275 x 365 days x 10 years = $1,003,750. Furthermore, since they paid premiums for 10 years without a claim (it's a 12-year-old policy), once my dad dies, she maintains the policy for the rest of her life and the premiums are all waived going forward.
Like I said, if I could buy the policy, I would. Genworth isn't a slouch institution.
Like I said, if I could buy the policy, I would. Genworth isn't a slouch institution.
Re: [If over 50] Do you prepare for long term care
I venture to guess that LTCi policy isn't available in the real world anymore.Artsdoctor wrote:My parents' maximum doesn't have a financial cap. Genworth will pay for 10 years of long-term care and they can split it anyway they want (8 years for Mom, 2 years for Dad, for example). It's indexed to inflation. Right now, Genworth will pay $275 per day and then that is indexed to CPU (and don't ask me which CPU!). So technically, I suppose, it would be $275 x 365 days x 10 years = $1,003,750. Furthermore, since they paid premiums for 10 years without a claim (it's a 12-year-old policy), once my dad dies, she maintains the policy for the rest of her life and the premiums are all waived going forward.
Like I said, if I could buy the policy, I would. Genworth isn't a slouch institution.
We don't know where we are, or where we're going -- but we're making good time.
Re: [If over 50] Do you prepare for long term care
I had LTCi for a while, but then the inevitable premium increases started coming. After the second one, I bailed out.
It was a minimal policy and I didn't want to start paying more and more for less and less (no inflation rider).
It was a minimal policy and I didn't want to start paying more and more for less and less (no inflation rider).
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.
- Artsdoctor
- Posts: 6063
- Joined: Thu Jun 28, 2012 3:09 pm
- Location: Los Angeles, CA
Re: [If over 50] Do you prepare for long term care
^ Browser: I agree. When I reviewed it with my mom a few months ago, I couldn't believe it and I told her that they don't even write policies like this anymore. In fact, I was skeptical enough that I got on the phone to speak with a representative with my mom, and she confirmed everything. I was STILL skeptical but when it came time for my mom to actually start using it, they delivered on everything they said they would.