Can I afford LTC insurance given my unique circumstances?

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sheople2
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Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Tue Feb 23, 2016 10:03 pm

Age: 48
SSDI: 18,000 / yr.
I do not own a home.
Living with family - may not do so in the future
No inheritance expected - but not certain of this
Total = $257,000. (About 50/50 split of cash, cds versus stock & stock mutual funds)

I’ve read the following;

- you should consider it if you have at least $75K in assets (excluding home and car) AND an annual income of $35K / yr.

- you should spend no more than 5% of your income on LTC yearly premiums.

- you shouldn’t buy it unless you know that you can continue to pay the premiums until you may need them (possibly decades ahead)

- you shouldn’t buy unless you can pay the premium increases, some of which are substantial percentages.

–––––––––––––––––––––––––––––––––

Suze Orman suggests looking into LTC ins if you answer Yes to one of her financial test questions below;

- Do you have at least $150,000 in liquid assets (savings and / or other investments that are easily converted to cash)? Not sure if I do given this description. What does she mean? Stocks and mutual funds can be converted to cash…

- Do you have at least $50,000 in liquid assets AND own your own home? No.

- Do you have an annual income of at least $36,000? No.

Difficult topic, but please keep answers as simple as possible. Please let me know if you have any questions for me or need other pertinent info.

Thanks in advance.
Last edited by sheople2 on Fri Feb 26, 2016 11:58 pm, edited 2 times in total.

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TomatoTomahto
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Re: Can I afford LTC insurance given my unique circumstances?

Post by TomatoTomahto » Tue Feb 23, 2016 10:28 pm

Simple answer: No. Income too low to afford it.

mhalley
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Re: Can I afford LTC insurance given my unique circumstances?

Post by mhalley » Wed Feb 24, 2016 12:01 am

Don't most people recommend waiting till you are sixty to consider ltci? Also, I think if you are single the need for it goes way down. If you don't have a wife to worry about, spending down your assets till Medicaid pays for it is not unreasonable.

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mephistophles
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Re: Can I afford LTC insurance given my unique circumstances?

Post by mephistophles » Wed Feb 24, 2016 12:26 am

Long Term Care insurance has priced itself out of the range for many Americans.
ole meph

CedarWaxWing
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Re: Can I afford LTC insurance given my unique circumstances?

Post by CedarWaxWing » Wed Feb 24, 2016 3:41 pm

Long term care insurance is very expensive... and there has been a tendency for some of those companies selling it to become financially insolvent...

Then that happens it may be taken over by the take insurance commissioner... or other state agency. IF that happens you may still have insurance, but not the same benefits you paid for.

I would not get long term care insurance myself...

M

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BL
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Re: Can I afford LTC insurance given my unique circumstances?

Post by BL » Wed Feb 24, 2016 3:54 pm

Some of the companies also have had huge increases in premiums, so even if you thought it might work now doesn't necessarily mean it would work later.

Also there are quite a few medical issues that can exclude one from getting the insurance in the first place.

edge
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Re: Can I afford LTC insurance given my unique circumstances?

Post by edge » Wed Feb 24, 2016 3:57 pm

No. Assuming a poor underwriting class you could be spending a large percentage of your income on it.

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Artsdoctor
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Re: Can I afford LTC insurance given my unique circumstances?

Post by Artsdoctor » Wed Feb 24, 2016 4:06 pm

Sheople2,

Am I reading your description of income/assets correctly? Are you receiving SSDI? I'm assuming that you must be disabled to qualify for SSDI benefits; if so, I would think it'd be difficult to find an insurer which would sell you LTCI.

As others have stated, even if you could conceivably qualify for LTCI, I don't think you'd be able to afford the premiums (and the inherent cost increases which would most likely ensue over time).

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Wed Feb 24, 2016 8:59 pm

TomatoTomahto wrote:Simple answer: No. Income too low to afford it.


Hi. If you have time, can you elaborate a bit? Don't we also have to consider my savings mentioned as well as income?

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Wed Feb 24, 2016 9:01 pm

mhalley wrote:Don't most people recommend waiting till you are sixty to consider ltci? Also, I think if you are single the need for it goes way down. If you don't have a wife to worry about, spending down your assets till Medicaid pays for it is not unreasonable.



Hi, I keep reading that people should start researching in late forties / early fifties. The "ideal time to purchase" is generally said to be late 50s. I believe the thinking is that's when people may still be healthy enough to purchase.
Last edited by sheople2 on Wed Feb 24, 2016 9:38 pm, edited 2 times in total.

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Wed Feb 24, 2016 9:08 pm

mspadorchard wrote:Long term care insurance is very expensive... and there has been a tendency for some of those companies selling it to become financially insolvent...

Then that happens it may be taken over by the take insurance commissioner... or other state agency. IF that happens you may still have insurance, but not the same benefits you paid for.

I would not get long term care insurance myself...

M


I know you guys hate Orman, but I like her and she is well-versed on this topic. She's warned us about the fact that some of these companies may not be there anymore after people potentially pay premiums for years. She does list a group of companies that her experts have deemed safe. Years ago the list was short - just Genworth and Hancock. Now the list is much longer.

If you are rich, you can self-insure. If you are dirt poor, you can get on Medicaid and hope that you are not neglected. I'm trying to figure out if I'm in the middle range of Americans that should consider LTC.

I'm afraid of losing my entire savings. I didn't know about private disability insurance and it has nearly destroyed me.

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Wed Feb 24, 2016 9:11 pm

edge wrote:No. Assuming a poor underwriting class you could be spending a large percentage of your income on it.


Assuming premiums of 5% of my $18k income is $900. Ouch. That's a lot of money. ...And for who knows how long

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Wed Feb 24, 2016 9:13 pm

Artsdoctor wrote:Sheople2,

Am I reading your description of income/assets correctly? Are you receiving SSDI? I'm assuming that you must be disabled to qualify for SSDI benefits; if so, I would think it'd be difficult to find an insurer which would sell you LTCI.

As others have stated, even if you could conceivably qualify for LTCI, I don't think you'd be able to afford the premiums (and the inherent cost increases which would most likely ensue over time).


Hi Doc,
If you have the time, scroll down to her LTC section which includes short medical quiz ( I passed) and financial quiz (not sure if I passed, as stated in my original post.

http://apps.suzeorman.com/pl/pdfs/Perso ... urance.pdf

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Wed Feb 24, 2016 9:16 pm

BL wrote:Some of the companies also have had huge increases in premiums, so even if you thought it might work now doesn't necessarily mean it would work later.


Yes, I know. That's part of what makes it tough, if not impossible, for me to plan. Many years ago, LTC rates were stable. Recently I read that because so few Americans (only about 8% have it) is part of the reason why they have hiked rates - some are rumored to be/have been hiked about 40%.

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zaboomafoozarg
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Re: Can I afford LTC insurance given my unique circumstances?

Post by zaboomafoozarg » Wed Feb 24, 2016 9:25 pm

sheople2 wrote:Assuming premiums of 5% of my $18k income is $900. Ouch. That's a lot of money. ...And for who knows how long


I was recently getting quotes for one of my parents in their 50's, and it was more like $5000 per year than $900 per year.

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Wed Feb 24, 2016 9:29 pm

zaboomafoozarg wrote:
sheople2 wrote:Assuming premiums of 5% of my $18k income is $900. Ouch. That's a lot of money. ...And for who knows how long


I was recently getting quotes for one of my parents in their 50's, and it was more like $5000 per year than $900 per year.


Wow. Yes. I haven't gotten any quotes yet. I have read it can be as much as 5K for a couple, but for one person -- that is a fortune (at least to me) for just one year of a premium.

I got a quote for my folks years ago. They were in their late 70's at the time -- the quote was $15,000 / yr total for both of them. So, I guess prices have gone way up since that time.
Last edited by sheople2 on Sat Feb 27, 2016 11:09 pm, edited 2 times in total.

itstoomuch
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Re: Can I afford LTC insurance given my unique circumstances?

Post by itstoomuch » Wed Feb 24, 2016 9:30 pm

sheople wrote:Hi, I can reading that people should start researching in late forties / early fifties. The "ideal time to purchase" is generally said to be late 50s.


We (now 65/68) bought in Feb 2001, at 51/54. We heard that the optimal time purchase is in your mid 60's (2011-2017). However, I discovered that the current offering is limited in number and scope AND exorbitantly expensive for what you get compared to what we got in 2001. If you wait to the "ideal time to purchase", you may discover that you are too late.
We did believed in the salesman and presented sales literature that waiting will cost you more. It's insurance, if you think you need it and you can get it, Insurance is always cheaper then, rather than when you absolutely want it and can't get it at any price. :oops:

as always YMMV

I make no recommendations, pro or con for your situation.
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Wed Feb 24, 2016 9:43 pm

itstoomuch wrote:
sheople wrote:Hi, I can reading that people should start researching in late forties / early fifties. The "ideal time to purchase" is generally said to be late 50s.


However, I discovered that the current offering is limited in number and scope AND exorbitantly expensive for what you get compared to what we got in 2001. If you wait to the "ideal time to purchase", you may discover that you are too late.


Yes, I keep reading that also. You will, today, apparently pay top dollar for a product that may be more limiting in what they will cover etc. I assume that's what you meant by scope. What did you mean by "limited in number"?

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Re: Can I afford LTC insurance given my unique circumstances?

Post by itstoomuch » Wed Feb 24, 2016 10:02 pm

^^
sheople wrote:Yes, I keep reading that also. You will, today, apparently pay top dollar for a product that may be more limiting in what they will cover etc. we paid the then top dollar plan as compared to other insurer's plans I assume that's what you meant by scope our plan was more comprehensive than the other's.. What did you mean by "limited in number"? Many companies then offering LTCi, Now only a few. Our original carrier got out and sold to MetLife who also decided to get out but continues to honor the policy, per regulation, I believe.
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

edge
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Re: Can I afford LTC insurance given my unique circumstances?

Post by edge » Thu Feb 25, 2016 9:35 am

sheople2 wrote:
edge wrote:No. Assuming a poor underwriting class you could be spending a large percentage of your income on it.


Assuming premiums of 5% of my $18k income is $900. Ouch. That's a lot of money. ...And for who knows how long


I would estimate 4-5k per year for a poor underwriting class. You can get it to be cheaper if you select no inflation and low benefit pool.

Miriam2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by Miriam2 » Thu Feb 25, 2016 9:44 am

sheople2 -
Here are links to the John Hancock Condensed Underwriting Guide for Long Term Care Insurance and for the Long Term Care Insurance Application. Read them and you may have a better picture whether you would even qualify for LTCi.

Note that on Part 3 of the Application, it says: "If you answered "YES" to any of questions 3a-3f above, we suggest that you do not submit an application. We will be unable to offer you coverage at this time."

Question 3f states - "Are you currently receiving Social Security disability benefits?"

John Hancock LTCi Application
Condensed Underwriting Guide for LTCi

Note that your Suze Orman "medical quiz" leaves out most of the medical questions asked by the LTCi company.

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Artsdoctor
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Re: Can I afford LTC insurance given my unique circumstances?

Post by Artsdoctor » Thu Feb 25, 2016 9:50 am

sheople2 wrote:
Artsdoctor wrote:Sheople2,

Am I reading your description of income/assets correctly? Are you receiving SSDI? I'm assuming that you must be disabled to qualify for SSDI benefits; if so, I would think it'd be difficult to find an insurer which would sell you LTCI.

As others have stated, even if you could conceivably qualify for LTCI, I don't think you'd be able to afford the premiums (and the inherent cost increases which would most likely ensue over time).


Hi Doc,
If you have the time, scroll down to her LTC section which includes short medical quiz ( I passed) and financial quiz (not sure if I passed, as stated in my original post.

http://apps.suzeorman.com/pl/pdfs/Perso ... urance.pdf


I would have a hard time believing that someone on SSDI would qualify for LTCI.

More importantly, the site you referred to is a PDF file published in 2003. The LTCI community has changed tremendously in the past 13 years. The policies currently being written do not resemble those policies written over a decade ago.

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TomatoTomahto
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Re: Can I afford LTC insurance given my unique circumstances?

Post by TomatoTomahto » Thu Feb 25, 2016 10:52 am

sheople2 wrote:
TomatoTomahto wrote:Simple answer: No. Income too low to afford it.


Hi. If you have time, can you elaborate a bit? Don't we also have to consider my savings mentioned as well as income?

As others have mentioned, you are at best in an unfortunate underwriting class. Most likely, you can't get coverage, and if you do, it will be extortionately priced and have many exclusions.

You don't have sufficient assets or income to afford this. Google Consumer Reports LTCi. There are few people who should consider LTCi, others have enough to "self-insure," or insufficient means to afford it. Sorry.

AlwaysAStudent
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Re: Can I afford LTC insurance given my unique circumstances?

Post by AlwaysAStudent » Thu Feb 25, 2016 10:54 am

My husband is 32 and was dx'd with MS at 30. He is still healthy, working, and active (not receiving SSDI) and we have not been able to get him qualified for LTCi. Basically, I am agreeing with all the above posters, I am not sure you would qualify for LTCi.

We were not even able to get him additional life insurance after he was dx'd, so we will keep is small $100k policy (term policy that was started many years before dx'd) for a few more years until the mortgage is paid off.

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Re: Can I afford LTC insurance given my unique circumstances?

Post by Artsdoctor » Thu Feb 25, 2016 11:06 am

Basically, when Suze Orman and others started recommending LTCI, it was a different world. The insurance companies totally underestimated the cost and it was one of those rare times when they really miscalculated in an extraordinary way.

Now, fewer companies are writing policies and the policies written are a shadow of what was once offered. The insurance companies have "corrected' their calculations and it is no longer the bargain that it once was. I don't know if Suze Orman is still recommending them, but many others who were once enamored of LTCI have at least become much more cautious.

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Thu Feb 25, 2016 11:11 pm

TomatoTomahto wrote:
You don't have sufficient assets or income to afford this.


What amount in assets would I need to afford it?

I'm pondering this issue because I keep reading that if you have at least $250K you should look into getting this.
(Let's assume for a minute that I would be accepted and would not necessarily be in a "poor underwriting class.")

I keep reading that a lifetime of premiums would still be less than one year of care out-of-pocket. So if I pay ie. $5K (outrageous) multiply by 20 years is $100K. By that time, long-term care would cost me about $500 a day. 500 times 365 days = $182,000. (?)
Last edited by sheople2 on Sun Feb 28, 2016 10:54 pm, edited 1 time in total.

madbrain
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Re: Can I afford LTC insurance given my unique circumstances?

Post by madbrain » Thu Feb 25, 2016 11:42 pm

sheople2 wrote:If you have the time, scroll down to her LTC section which includes short medical quiz ( I passed) and financial quiz (not sure if I passed, as stated in my original post.

http://apps.suzeorman.com/pl/pdfs/Perso ... urance.pdf


I looked. The 5 question medical quiz is a joke, IMO. There are plenty of other exclusions that apply.

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Thu Feb 25, 2016 11:55 pm

TomatoTomahto wrote:
You don't have sufficient assets or income to afford this.


What amount in assets would I need to afford it?

I'm pondering this issue because I keep reading that if you have at least $250K (I've even read if you have as little as $150K) you should look into getting the insurance. (Let's assume for a minute that I would be accepted and would not necessarily be in a "poor underwriting class.")

I keep reading that a lifetime of premiums would still be less than one year of care. So if I pay ie. $5K (outrageous) multiply by 20 years is $100K. By that time, long-term care would cost me about $500 a day. 500 times 365 days = $182,000. (?)

By the way, I hear all of you and understand that it's likely a nightmare scenario for me. I appreciate everyone's participation and hope I haven't burned you out the subject just yet.

This is the first time I've ever posted a question which was answered by a unanimous vote. I guess that's very telling. (...And yes, I understand that it's ultimately my decision.)

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Fri Feb 26, 2016 12:12 am

Please help. I tried to edit my last post several times and instead it reposted 16 times. Can someone remove them? I'm not sure how that happened. So sorry.

[working on it - admin alex]

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Fri Feb 26, 2016 12:29 am

Artsdoctor wrote:Basically, when Suze Orman and others started recommending LTCI, it was a different world. The insurance companies totally underestimated the cost and it was one of those rare times when they really miscalculated in an extraordinary way.

Now, fewer companies are writing policies and the policies written are a shadow of what was once offered. The insurance companies have "corrected' their calculations and it is no longer the bargain that it once was. I don't know if Suze Orman is still recommending them, but many others who were once enamored of LTCI have at least become much more cautious.

Yes, she still recommends them;

http://www.suzeorman.com/blog/long-term ... ce-update/

http://www.suzeorman.com/blog/a-retirem ... for-women/

http://www.suzeorman.com/resource-center/insurance/ - She list about 7 companies - she says to only consider these because she has researched them with experts who believe that these will companies will still be there in the future.

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Re: Can I afford LTC insurance given my unique circumstances?

Post by Alex Frakt » Fri Feb 26, 2016 12:42 am

sheople2 wrote:Please help. I tried to edit my last post several times and instead it reposted 16 times. Can someone remove them? I'm not sure how that happened. So sorry.

[working on it - admin alex]

Done. Whew. Here's a couple of hints in case you want to do edits in the future.

1. The little pencil icon is used for editing that post. You will only see it on your posts.

2. The icon with the quotation marks will start a new reply with all of the contents of that post included.

2b. If you do start a quoted reply, the quoted section will be surrounded by quote tags in brackets like the following

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[quote="Alex Frakt"]I'm a quote.[/quote]

Which ends up looking like this:
Alex Frakt wrote:I'm a quotation.

3. You can remove unnecessary text inside a quotation, but don't mess with the tags. And make sure your new comments go outside the quote tags. Typically, you'd want them to go after.

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Fri Feb 26, 2016 2:43 am

Alex Frakt wrote:
sheople2 wrote:Please help. I tried to edit my last post several times and instead it reposted 16 times. Can someone remove them? I'm not sure how that happened. So sorry.

[working on it - admin alex]

Done. Whew. Here's a couple of hints in case you want to do edits in the future.

1. The little pencil icon is used for editing that post. You will only see it on your posts.

2. The icon with the quotation marks will start a new reply with all of the contents of that post included.

2b. If you do start a quoted reply, the quoted section will be surrounded by quote tags in brackets like the following

Code: Select all

[quote="Alex Frakt"]I'm a quote.[/quote]

Which ends up looking like this:
Alex Frakt wrote:I'm a quotation.

3. You can remove unnecessary text inside a quotation, but don't mess with the tags. And make sure your new comments go outside the quote tags. Typically, you'd want them to go after.


Thank you Alex. I really appreciate your patience. I'll keep your notes.

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BL
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Re: Can I afford LTC insurance given my unique circumstances?

Post by BL » Fri Feb 26, 2016 9:50 am

The John Hancock link above has as one of it's questions:
Are you currently receiving Social Security Disability benefits?

and if so, they suggest not applying for the LTC insurance.

Even without this, I think there would be such a prohibitive cost involved that it would not make sense to do this. At least you don't have a spouse to impoverish when you spend your money down for care which is a difficult problem. I do believe that one should do what they can using their own money, and if necessary rely on Medicaid down the road. It was created as a safety net for just such circumstances.

Even if we meet the suggested guidelines, many of us have chosen not to buy LTCi, due to problems such as premium increases, coverage questions, and other unknowns.

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mephistophles
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Re: Can I afford LTC insurance given my unique circumstances?

Post by mephistophles » Fri Feb 26, 2016 4:15 pm

I sold my share of Long Term Care insurance, a number of years ago. I quit selling the product when my
existing clients started getting significant premium increases which I considered unfair and unnecessary.
ole meph

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Toons
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Re: Can I afford LTC insurance given my unique circumstances?

Post by Toons » Fri Feb 26, 2016 4:31 pm

The rich probably don't need it.
The poor will rely on Medicaid.
Those who don't fit into either of those categories might look at long-term care insurance .
Single Age 55
Average Cost: $2,007-per-year
Low Cost: $1,764
High Cost: $3,446
If you don't think you can keep up with the premiums on your policy your entire life, you shouldn't buy one.
The younger and healthier you are the less expensive the policy.
Read The fine print as to what is covered and WHEN you are eligible. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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Re: Can I afford LTC insurance given my unique circumstances?

Post by Miriam2 » Fri Feb 26, 2016 5:17 pm

Alex Frakt wrote:
sheople2 wrote:Please help. I tried to edit my last post several times and instead it reposted 16 times. Can someone remove them? I'm not sure how that happened. So sorry.
[working on it - admin alex]

Done. Whew. Here's a couple of hints in case you want to do edits in the future.
1. The little pencil icon is used for editing that post. You will only see it on your posts.
2. The icon with the quotation marks will start a new reply with all of the contents of that post included.
2b. If you do start a quoted reply, the quoted section will be surrounded by quote tags in brackets like the following

Code: Select all

[quote="Alex Frakt"]I'm a quote.[/quote]

Which ends up looking like this:
Alex Frakt wrote:I'm a quotation.

3. You can remove unnecessary text inside a quotation, but don't mess with the tags. And make sure your new comments go outside the quote tags. Typically, you'd want them to go after.

Alex -
Your help for sheople2 in the middle of the night was/is pure vintage cordial Boglehead - above and beyond the call of duty (how cliché, but true) sort of like Paul Revere's midnight ride 8-)
But of course, that's what makes this forum great -
and we all THANK YOU for your above-duty efforts over the last 9 years :D

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Re: Can I afford LTC insurance given my unique circumstances?

Post by Lynette » Fri Feb 26, 2016 5:34 pm

Are you completely sure that Suze Orman does not get a percentage from Insurance companies for recommending them. As others mentioned I don't think you can afford it. I think that the are extremely expensive and will not be able to provide the necessary payout.

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Fri Feb 26, 2016 11:21 pm

Lynette wrote:Are you completely sure that Suze Orman does not get a percentage from Insurance companies for recommending them. As others mentioned I don't think you can afford it. I think that the are extremely expensive and will not be able to provide the necessary payout.


I'm positive that she does not.

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Fri Feb 26, 2016 11:29 pm

BL wrote:The John Hancock link above has as one of it's questions:
Are you currently receiving Social Security Disability benefits?

and if so, they suggest not applying for the LTC insurance.

Even without this, I think there would be such a prohibitive cost involved that it would not make sense to do this. At least you don't have a spouse to impoverish when you spend your money down for care which is a difficult problem. I do believe that one should do what they can using their own money, and if necessary rely on Medicaid down the road. It was created as a safety net for just such circumstances.

Even if we meet the suggested guidelines, many of us have chosen not to buy LTCi, due to problems such as premium increases, coverage questions, and other unknowns.


I'm not married but I do have a significant other of many years who is older with more health issues and may or may not die first.

Doesn't the use of Medicaid almost guarantee abuse and neglect whether they are helping you in your home or at an assisted living facility? That's an extremely grim and frightening prospect.

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Fri Feb 26, 2016 11:33 pm

I don't mean to press the point, but I was hoping some of you math geeks would say how much I would need to afford it - per the info I gave, rather than just saying I can't afford it. I'm trying to understand why I can't. I thought that I did fall into the middle category mentioned above. No?

...And won't I need the $250+K to live on? There is no way to protect it given my circumstances?

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Fri Feb 26, 2016 11:38 pm

Toons wrote:The rich probably don't need it.
The poor will rely on Medicaid.
Those who don't fit into either of those categories might look at long-term care insurance .
Single Age 55
Average Cost: $2,007-per-year
Low Cost: $1,764
High Cost: $3,446
If you don't think you can keep up with the premiums on your policy your entire life, you shouldn't buy one.
The younger and healthier you are the less expensive the policy.
Read The fine print as to what is covered and WHEN you are eligible. :happy


Which category am I in? I thought the middle one - with $250+K of savings/investments to try and protect - which means I should research LTC. No?
I don't know if I could keep up with the premiums - that's why I'm consulting a financial / math board to start.

cherijoh
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Re: Can I afford LTC insurance given my unique circumstances?

Post by cherijoh » Sat Feb 27, 2016 12:16 am

sheople2 wrote:
Toons wrote:The rich probably don't need it.
The poor will rely on Medicaid.
Those who don't fit into either of those categories might look at long-term care insurance .
Single Age 55
Average Cost: $2,007-per-year
Low Cost: $1,764
High Cost: $3,446
If you don't think you can keep up with the premiums on your policy your entire life, you shouldn't buy one.
The younger and healthier you are the less expensive the policy.
Read The fine print as to what is covered and WHEN you are eligible. :happy


Which category am I in? I thought the middle one - with $250+K of savings/investments to try and protect - which means I should research LTC. No?
I don't know if I could keep up with the premiums - that's why I'm consulting a financial / math board to start.



I understand that you feel like you missed out by not having a disability policy in force before you were disabled. I think everyone should have one of those. Because the rate of disability is low in the general population, the rates are not unreasonable for the benefits you would receive should you need them. This does not mean that LTCI is a similar proposition.

Personally, I think you are relying too heavily on an overly simplistic worksheet of unspecified vintage. (The numbers quoted for asset levels and income could be WAY out of date). But you seem to want to research LTCI despite the lack of encouragement you have gotten here. So why don't you contact an agent and see if they know of any companies that would even take your application given that you are on SS disability?

Once (if?) you have a quote, bring it back and post the details. Then you would get a far more informed answer.

What you need to keep in mind is that IF for any reason, you can't keep up the premium then the money spent on premiums has gone down the drain. I'm not familiar enough to know whether you could downgrade your policy to get a lower premium (and benefits) and keep the policy in force without having to requalify. But any degradation in benefits would still mean that you would have wasted a lot of the money you paid on premiums.

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TomatoTomahto
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Re: Can I afford LTC insurance given my unique circumstances?

Post by TomatoTomahto » Sat Feb 27, 2016 12:20 am

frFrom a consumer reports article http://www.consumerreports.org/cro/2012 ... /index.htm. I believe that in the 3-4 years since publication, premiums have become even less affordable.

Ken Weingarten, a fee-only financial planner in Lawrenceville, N.J., says in his state retired couples who have $2.5 million or more in liquid assets can generally afford to pay for long-term care out-of-pocket, while those with less than $500,000 will probably be unable to afford the premiums on an LTC policy. "It's the people in between who are the most likely candidates for a long-term-care policy," he says. Those numbers will be lower in states where care is less expensive. To find state-by-state costs, check Genworth Financial's 2012 Cost of Care survey, at genworth.com.


Your assets were borderline in 2012, even without your special underwriting issues. Why don't you get a quote? I think with your circumstances it will be impossible to get insurance, or it will be massively expensive.

I have no data to back it up, but I don't believe that getting care covered by Medicaid virtually guarantees substandard care.

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BL
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Re: Can I afford LTC insurance given my unique circumstances?

Post by BL » Sat Feb 27, 2016 1:51 pm

The cost of care varies greatly depending on area, and it is possible that Medicaid treatment may as well. In the rural America I live in, I can't tell who is on Medicaid and who is not. Some may be downsized to a double room but otherwise continue on as usual as when paying. I believe it helps to have friends and family visit, but that has nothing to do with Medicaid.

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Sat Feb 27, 2016 10:07 pm

I forgot to mention that my state is one that offers Partnership programs. It's called a type of Medicaid Asset Protection where you only need to purchase an amount of LTC insurance equal to the amount of assets you wish to protect. They say that a one or two year policy may be all you need to protect your assets, rather than buying more insurance. This means Partnership policies can be a "more affordable option for some people". IE, So, if you buy $200K worth of LTCi benefits, your own savings of $200K is not counted by Medicaid. Is anyone familiar with these? They were introduced to my state several years ago. I don't know how they are different now. They make the option of buying even more confusing - but maybe it's a better product?

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White Coat Investor
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Re: Can I afford LTC insurance given my unique circumstances?

Post by White Coat Investor » Sat Feb 27, 2016 11:28 pm

sheople2 wrote:Age: 48
SSDI: 18,000 / yr.
I do not own a home.
Living with family - may not do so in the future
No inheritance expected - but not certain of this
Total = $257,000. (About 50/50 split of cash, cds versus stock & stock mutual funds)

I’ve read the following;

- you should consider it if you have at least $75K in assets (excluding home and car) AND an annual income of $35K / yr.

- you should spend no more than 5% of your income on LTC yearly premiums.

- you shouldn’t buy it unless you know that you can continue to pay the premiums until you may need them (possibly decades ahead)

- you shouldn’t buy unless you can pay the premium increases, some of which are substantial percentages.

–––––––––––––––––––––––––––––––––

Suze Orman suggests looking into LTC ins if you answer Yes to one of her financial test questions below;

- Do you have at least $150,000 in liquid assets (savings and / or other investments that are easily converted to cash)? Not sure if I do given this description. What does she mean? Stocks and mutual funds can be converted to cash…

- Do you have at least $50,000 in liquid assets AND own your own home? No.

- Do you have an annual income of at least $36,000? No.

Difficult topic, but please keep answers as simple as possible. Please let me know if you have any questions for me or need other pertinent info.

Thanks in advance.


Does someone besides you depend on your nest egg? If not, then if you go in a nursing home, you can spend it all and then go on Medicaid. If your only income is $18K a year, I'm not sure you can really afford it anyway, can you?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Sat Feb 27, 2016 11:41 pm

I've been Googling for days and I can't seem to find a recent (more recent than 2012) guideline recommendation for income and assets (savings/investments).

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Sat Feb 27, 2016 11:48 pm

White Coat Investor wrote:
sheople2 wrote:Age: 48
SSDI: 18,000 / yr.
I do not own a home.
Living with family - may not do so in the future
No inheritance expected - but not certain of this
Total = $257,000. (About 50/50 split of cash, cds versus stock & stock mutual funds)

I’ve read the following;

- you should consider it if you have at least $75K in assets (excluding home and car) AND an annual income of $35K / yr.

- you should spend no more than 5% of your income on LTC yearly premiums.

- you shouldn’t buy it unless you know that you can continue to pay the premiums until you may need them (possibly decades ahead)

- you shouldn’t buy unless you can pay the premium increases, some of which are substantial percentages.

–––––––––––––––––––––––––––––––––

Suze Orman suggests looking into LTC ins if you answer Yes to one of her financial test questions below;

- Do you have at least $150,000 in liquid assets (savings and / or other investments that are easily converted to cash)? Not sure if I do given this description. What does she mean? Stocks and mutual funds can be converted to cash…

- Do you have at least $50,000 in liquid assets AND own your own home? No.

- Do you have an annual income of at least $36,000? No.

Difficult topic, but please keep answers as simple as possible. Please let me know if you have any questions for me or need other pertinent info.

Thanks in advance.


Does someone besides you depend on your nest egg? If not, then if you go in a nursing home, you can spend it all and then go on Medicaid. If your only income is $18K a year, I'm not sure you can really afford it anyway, can you?


Not right now, but perhaps in the future they may depend on it. I don't know doc, that's why I'm posting. What if I get ie. home care and expend all of my savings to do it. Then, I keep living and now only have SS to live on? That's what I was hoping to avoid. The Partnership thing I described below, could help avoid that...

http://www.aaltci.org/long-term-care-in ... hp#explain

Other than Tomato poster, nobody seems to know the income AND asset guideline combination for perhaps affording this product or not.
Last edited by sheople2 on Sun Feb 28, 2016 12:19 am, edited 2 times in total.

Miriam2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by Miriam2 » Sun Feb 28, 2016 12:00 am

sheople2 -
Did you read these links?

John Hancock LTCi Application
Condensed Underwriting Guide for LTCi

The first link is for the John Hancock Long Term Care Insurance application.

Question 3f states - "Are you currently receiving Social Security disability benefits?"
Your answer would be - "yes."
Part 3 of the Application says: "If you answered "YES" to any of questions 3a-3f above, we suggest that you do not submit an application. We will be unable to offer you coverage at this time."
John Hancock would deny you LTCi coverage.

Assuming the John Hancock LTCi application is standard for the LTC industry, it doesn't look like it will be easy for you to obtain LTCi coverage.

Seems like whether you can afford it is only one problem - can you even get it??

sheople2
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Re: Can I afford LTC insurance given my unique circumstances?

Post by sheople2 » Sun Feb 28, 2016 12:08 am

Yes, I did look at those links. But not all insurance companies use the same guidelines AND I'm not asking anyone here on this thread if I could qualify. I've been asking about the money / math part of this problem.

Here are some other recommended companies that sell today besides JH - although that is also off-topic;
Country Financial
Genworth Financial
Massachusetts Mutual
Mutual of Omaha
New York Life
Northwestern Mutual
Transamerica

Again, I can't seem to find a recent guideline recommendation for income AND assets (savings/investments).

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