How does this long term care policy look?

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Topic Author
PlayingLife
Posts: 350
Joined: Sun Dec 29, 2013 3:10 pm

How does this long term care policy look?

Post by PlayingLife » Tue Oct 20, 2015 12:56 pm

Hi BH's,

I just reviewed my mother and father's long term care policy and wanted to post the specifics up here to see what you all think. Does this plan look good, bad, or indifferent? I'm going to start a deep dive researching long term care policies, but I appreciate your opinion. Just getting into helping them out with things since they are getting older and need some help....thank you!

Policy is with Med America. My dad pays $247.33 a quarter and my mom pays $136.82 a quarter. So the whole policy is $1536 a year. It comes with a death benefit of $36,713 and is good until age 80 for each.

Dad's coverage:
*Policy has a 5% compound inflation 2x max
*Elimination period: 90 days
*Facility max monthly benefit: $3,300 / month
*Community max monthly benefit: $1980 / month
*Lifetime max: 36 months
*Basic benefits modal premium: $155.24, but his again is $247 including the optionals riders modal premium

Mom's:
*The same as my father's. Her basic benefits premium is $84...with a $52 optionals riders modal premium it comes to the $136 mentioned above.

TonyDee
Posts: 14
Joined: Mon Oct 19, 2015 4:48 pm

Re: How does this long term care policy look?

Post by TonyDee » Tue Oct 20, 2015 2:28 pm

Hey Playing,
I can show you a quote I got from Mass Mutual and we can compare and maybe make some sense out of it ? :happy
I'm 60, my wife is 59. We live in Florida in perfect health, no meds, no family history of anything bad.
Policy is Tax qualified.
$100 Facility daily benefit (closest to your $ 100 day benefit).
$ 100 Home care benefit ( didn't see you mention home care benefit)
and home care benefit pooled.
3 years facility benefit
5 % compound
90 day elimination
Partnership plan

premium is $ 3,753.25 / year for both of us so $ 312 / month approx.

Lot more than your quote so I guess your deal isn't too bad.
May I ask what state your purchasing in and the ages of the applicants ?
Did you not include home care to bring the premium down ?
Is Med America that much cheaper than Mass Mutual ?
When you say community max is that assisted living ?
I've been pursuing MM because of they've never had a rate increase.
Thanks,
Tony

grandmacassie
Posts: 190
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Re: How does this long term care policy look?

Post by grandmacassie » Tue Oct 20, 2015 3:55 pm

What do you mean "until age 80"'? Is this the point at which the life insurance benefit expires? Is the premium is guaranteed not to rise before then? If the whole policy expires at that date, get another. Many folks don't need LTC until their late 80's into their 90's.

Independent
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Joined: Tue Sep 22, 2009 1:09 pm

Re: How does this long term care policy look?

Post by Independent » Tue Oct 20, 2015 9:41 pm

You didn't mention ages, when they bought the policies, or whether the $3,300 is the original benefit or an inflated amount.

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celia
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Re: How does this long term care policy look?

Post by celia » Wed Oct 21, 2015 12:29 am

I usually start researching/comparing insurance policies by checking the companies' credit worthiness at A.M. Best: http://www.ambest.com/home/default.aspx

(No use having any kind of policy if the company won't be there for you when you need a payout.)

There was no listing for Med America and googling it, I only see it as a billing service for doctors. Do you have the company name correct?
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

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celia
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Location: SoCal

Re: How does this long term care policy look?

Post by celia » Wed Oct 21, 2015 12:48 am

How old are they now and how long have they had these policies? This is important since Long Term Care policies are usually priced for lower premiums the younger you are when you start it (because you will be paying for more years before you file a claim). The premiums tend to stay "level", going up only when it goes up for the whole group (however that is defined, but obviously can't increase for one individual who happens to become disabled). If you were to restart with new policies now, the cost may be prohibitive if they are a lot older now.

--celia
p.s. I've never heard of a LTC policy with a death benefit--that sounds like a combo LTC and Life insurance policy which should cost more than just LTC.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

Topic Author
PlayingLife
Posts: 350
Joined: Sun Dec 29, 2013 3:10 pm

Re: How does this long term care policy look?

Post by PlayingLife » Fri Oct 23, 2015 5:19 pm

Okay first of all sorry I took so long as I was stuck traveling for work last minute....I see now where I confused things, here are some points of clarification...

Dad: turning 72 next week
Mom: turning 66 next year

My father worked in a union throughout his life. He retired at 59 1/2 and in 2011 became responsible for picking up the bill for the existing policy. The policy was originally with Unum Provident but is now with Med America (an Excellus Company). It's "MedAmerica Insurance Company" out of Pburgh, PA. I'm not sure when the policy was originally deemed effective through the Union for both my mom and dad, but this is something I will have to research.

*TonyDee --> I think the lower cost of his plan is due to the deal they had with the union. The union still may front a portion of the bill but I don't think so...I see a policy transfer letter stressing how low cost the plan is (maybe trying to get people very young to retain the plan?).

*The death benefit is related to their life insurance policy (I confused this), I will address Life Insurance after confirming they are okay with their current long term care plan

All that being said....I guess I still need to do a little more research to find out the following:

1. Is the policy worth having, or can they find something not too much more expensive 10 years from now? I guess this depends on how they feel about their health, but I would appreciate additional insight here.

2. Is this plan generally good compared to what else is out there? I'll make some phone calls...

As always, your thoughts are appreciated.

Topic Author
PlayingLife
Posts: 350
Joined: Sun Dec 29, 2013 3:10 pm

Re: How does this long term care policy look?

Post by PlayingLife » Sat Oct 24, 2015 11:31 am

Bump - Sorry...does anyone else have any knowledge on how decent this policy is? Do most people hold off until later years to take LTC insurance?

Topic Author
PlayingLife
Posts: 350
Joined: Sun Dec 29, 2013 3:10 pm

Re: How does this long term care policy look?

Post by PlayingLife » Sat Oct 24, 2015 11:58 am

Actually now that I have read into this more, I think my parents have a good plan for the money. Tony it does seem that people who sign up around 60 or later pay about $3300 or more for roughly the same coverage. I'm assuming my parents' union probably started them on coverage in their early 50's, so it would make no sense to cancel the plan and sign up all over again a few years from now. My parents are healthy but I do worry about my dad as he doesn't take the best care of himself, so I think it is the most protective option to keep the coverage. The only last thing I am going to do is call on their behalf and see how much the premiums would rise to extend coverage past the current max of 36 months.

Thank you everyone.

Miriam2
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Joined: Fri Nov 14, 2014 11:51 am

Re: How does this long term care policy look?

Post by Miriam2 » Sat Oct 24, 2015 12:09 pm

PlayingLife -
You can plug into the BH google search engine "long term care" or "LTC" and you will pull up many threads discussing LTC insurance. It's one of those perpetual topics :wink:
Also, there is another LTC thread running on the forum now www.bogleheads.org/forum/viewtopic.php?f=2&t-176106

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