Long term care insurance - is it worth it?

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Dottie57
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Re: Long term care insurance - is it worth it?

Postby Dottie57 » Fri Jul 07, 2017 10:44 am

I wish LTCi. Was structured so the first year or two would be self insurance and only truly long term care was covered. Many people will die before 3 years are up. Maybe premiums could come down.

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mrc
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Re: Long term care insurance - is it worth it?

Postby mrc » Fri Jul 07, 2017 11:21 am

Rupert wrote:Read this horrifying story in the New York Times today: https://www.nytimes.com/2017/07/07/your ... ngine&_r=0

Then think about what the proposed changes to Medicaid in the healthcare legislation pending before Congress might mean for all of us. Even people like the woman in the story who worked hard, planned, saved, bought insurance, and had sophisticated children to help her end up destitute at the end. I'm not so much concerned for my own care as for my mother's in ten years or so. Her care might bankrupt me if Medicaid is no longer an option.


Moving away from the policy discussion (against the rules here) it's interesting to note her daughter is a medical social worker. Her son-in-law is a financial planner.

Moral of the story: Some will outlive their LTC coverage limits.
A great challenge of life: Knowing enough to think you're doing it right, but not enough to know you're doing it wrong. — Neil deGrasse Tyson

pshonore
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Re: Long term care insurance - is it worth it?

Postby pshonore » Fri Jul 07, 2017 11:49 am

mrc wrote:
Rupert wrote:Read this horrifying story in the New York Times today: https://www.nytimes.com/2017/07/07/your ... ngine&_r=0

Then think about what the proposed changes to Medicaid in the healthcare legislation pending before Congress might mean for all of us. Even people like the woman in the story who worked hard, planned, saved, bought insurance, and had sophisticated children to help her end up destitute at the end. I'm not so much concerned for my own care as for my mother's in ten years or so. Her care might bankrupt me if Medicaid is no longer an option.


Moving away from the policy discussion (against the rules here) it's interesting to note her daughter is a medical social worker. Her son-in-law is a financial planner.

Moral of the story: Some will outlive their LTC coverage limits.
All the more reason to buy a partnership policy which allows one to protect assets up to the amount paid out by the LTC policy. Particularly important for a married couple.

Jackson12
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Re: Long term care insurance - is it worth it?

Postby Jackson12 » Fri Jul 07, 2017 12:41 pm

pshonore wrote:
mrc wrote:
Rupert wrote:Read this horrifying story in the New York Times today: https://www.nytimes.com/2017/07/07/your ... ngine&_r=0

Then think about what the proposed changes to Medicaid in the healthcare legislation pending before Congress might mean for all of us. Even people like the woman in the story who worked hard, planned, saved, bought insurance, and had sophisticated children to help her end up destitute at the end. I'm not so much concerned for my own care as for my mother's in ten years or so. Her care might bankrupt me if Medicaid is no longer an option.


Moving away from the policy discussion (against the rules here) it's interesting to note her daughter is a medical social worker. Her son-in-law is a financial planner.

Moral of the story: Some will outlive their LTC coverage limits.
All the more reason to buy a partnership policy which allows one to protect assets up to the amount paid out by the LTC policy. Particularly important for a married couple.


I'm a firm believer in partnership policies....if one decides to buy long-term insurance.

But note this part of the article " Along the way, the insurance company declared her not sufficiently ill to warrant paying out on the policy" So,the family was forced to hire a nurse consultant to get the insurance company to pay. All in all, they had to hire 5 people to keep everything in place...just that much more expense..

Do long-term insurance companies do their own assessments of client conditions ( using a nurse or other medical pridessional they're chosen) or do they do a combination of their own assessments as well as a detailed look at an individual's records from their doctor?

I just wonder how much wiggle room exists for the insurance companies.

pshonore
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Re: Long term care insurance - is it worth it?

Postby pshonore » Fri Jul 07, 2017 1:50 pm

Jackson12 wrote:
pshonore wrote:
mrc wrote:
Rupert wrote:Read this horrifying story in the New York Times today: https://www.nytimes.com/2017/07/07/your ... ngine&_r=0

Then think about what the proposed changes to Medicaid in the healthcare legislation pending before Congress might mean for all of us. Even people like the woman in the story who worked hard, planned, saved, bought insurance, and had sophisticated children to help her end up destitute at the end. I'm not so much concerned for my own care as for my mother's in ten years or so. Her care might bankrupt me if Medicaid is no longer an option.


Moving away from the policy discussion (against the rules here) it's interesting to note her daughter is a medical social worker. Her son-in-law is a financial planner.

Moral of the story: Some will outlive their LTC coverage limits.
All the more reason to buy a partnership policy which allows one to protect assets up to the amount paid out by the LTC policy. Particularly important for a married couple.
I not sure of the answers but I would be surprised if the comPNY

I'm a firm believer in partnership policies....if one decides to buy long-term insurance.

But note this part of the article " Along the way, the insurance company declared her not sufficiently ill to warrant paying out on the policy" So,the family was forced to hire a nurse consultant to get the insurance company to pay. All in all, they had to hire 5 people to keep everything in place...just that much more expense..

Do long-term insurance companies do their own assessments of client conditions ( using a nurse or other medical pridessional they're chosen) or do they do a combination of their own assessments as well as a detailed look at an individual's records from their doctor?

I just wonder how much wiggle room exists for the insurance companies.
I'm not sure but I would be surprised if they did not start with most recent doctor's records and go from there. If I were buying LTC, I would ask around with several agents and find out who has the best claim paying record.

You can take this with a grain of salt, but my Genworth agent (who represents several companies) thinks Genworth is the best in industry for paying claims. YMMV.

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nedsaid
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Re: Long term care insurance - is it worth it?

Postby nedsaid » Fri Jul 07, 2017 1:55 pm

DKD wrote:There seems to be a lot of controversy over long term care insurance. I'm heading into retirement in a couple of years and I'm wondering if it's important to buy this. The few resources I've found on it suggest that one only should purchase long term care insurance, if one isn't impoverished or if one isn't wealthy. Obviously, impoverished people can't afford it, and Medicaid is suppose to kick in for them. Wealthy people can afford to take the gamble that they will never need long term care, because they can self-fund it, if it's really needed. That leaves the people in middle who have a significant nest egg, but one which might all be lost with 2-5 years of long term care. I know there are all sorts of policies one can buy, with various deductibles, terms, max limits, single or dual, etc.

Does anyone have a perspective on this? Thanks


When Met Life exited the business, that told me a lot. Look at the stock price of Genworth and ask yourself what that tells you. The industry is shrinking and that tells me there is still an issue with pricing these policies properly. Very low interest rates are not helping either.
A fool and his money are good for business.

bklyn96
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Re: Long term care insurance - is it worth it?

Postby bklyn96 » Fri Jul 07, 2017 3:05 pm

Jackson12 wrote:....
Do long-term insurance companies do their own assessments of client conditions ( using a nurse or other medical pridessional they're chosen) or do they do a combination of their own assessments as well as a detailed look at an individual's records from their doctor?....I just wonder how much wiggle room exists for the insurance companies.


My wife has been receiving benefits on her MetLife LTC policy for two years. When she applied back in 2015 the requirements were:

(1) The names and contact info for any doctor she had seen in the five years prior to applying for benefits
(2) An in-person interview with a nurse working for MetLife
(3) If approved for benefits, MetLife also must review and approve the care provider

protagonist
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Re: Long term care insurance - is it worth it?

Postby protagonist » Fri Jul 07, 2017 3:07 pm

TD2626 wrote:
itstoomuch wrote:+1@TD2626.
It's all about risk management :oops:


Thank you.

It's all too often that people simplysay "the premiums are too high" or "the cost of a nursing home is staggering".

Buying LTCI is simply more nuanced than that. One must look at the both return (in this case, negative return - i.e. cost) and risk at the same time.

The real question is "Does the reduction in returns due to the cost of an insurer's overhead/profit margin outweigh the benefits of reduced LTC-related expenditure risks to the portfolio?". A classic risk-return tradeoff.

protagonist wrote:SO, you might consider your own situation....your overall health, your fitness, your family situation, etc. And consider how much your premiums would add up to from now until , say, age 80 or 85 if you live that long (also taking into account your probability of living that long). Balance all of that with the cost of long term care for given periods of time and your perception of your chance of needing it, given all of the info above. Also consider your risk tolerance, what you can afford, and your options. From there you may be able to come up with a reasonable assessment as to whether the insurance is worth it to you.

If I had to guess, I would think for most people who are not unusually risk-averse the insurance would not be a good investment, but I did not crunch the numbers . If you are considering buying it, determine costs in various scenarios and crunch some numbers.

Don't just buy it out of fear.


When you say crunch the numbers - did you have any ideas on how?




Unfortunately there are many vagueries (spelling?) where you just have to guess, and the more precise you want to be, the more research you will need to do.

I think you could just do some simple algebraic calculations to get a rough idea, if you know what your premiums will be going forward for x years (based on what you know today) ,and you know what the cost (today's dollars) of the care would be, plus what deductibles and exclusions there are, using the probabiliity of your living to that point and the probability of you needing x months of care if you do live to that point.

There are probably statisticians and number crunchers on this site who could help you with the math, if you explain to them what you are trying to dertermine and if you are unsure of how to do it yourself.

If you begin with reasonable hypotheticals , and find that the amount invested vastly exceeds your projected need (discounting it based on your risk tolerance), you probably need not go any further with scenarios (or vice versa if it seems like a bargain). At least that is how I would approach it, knowing there is no "right" or "wrong" when the future is unknown. A "best guess" is all you can hope for.

Don't rely on the word of a salesman.

Avo
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Re: Long term care insurance - is it worth it?

Postby Avo » Fri Jul 07, 2017 3:52 pm

pshonore wrote:You can take this with a grain of salt, but my Genworth agent (who represents several companies) thinks Genworth is the best in industry for paying claims. YMMV.

My wife & I have Genworth policies, purchased a few years ago (we are both 61 now). But you can now find stories online of problems with claims to Genworth (hard to know how valid these are). And Genworth is in the process of being bought out by a Chinese holding company; latest I could find on this with a quick search: https://www.fool.com/investing/2017/05/ ... as-12.aspx

Will China Oceanwide keep up the same level of service? Who knows?

edge
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Re: Long term care insurance - is it worth it?

Postby edge » Fri Jul 07, 2017 4:19 pm

Shrinking is an understatement. New money shrank by 90% since 2010.

nedsaid wrote:
DKD wrote:There seems to be a lot of controversy over long term care insurance. I'm heading into retirement in a couple of years and I'm wondering if it's important to buy this. The few resources I've found on it suggest that one only should purchase long term care insurance, if one isn't impoverished or if one isn't wealthy. Obviously, impoverished people can't afford it, and Medicaid is suppose to kick in for them. Wealthy people can afford to take the gamble that they will never need long term care, because they can self-fund it, if it's really needed. That leaves the people in middle who have a significant nest egg, but one which might all be lost with 2-5 years of long term care. I know there are all sorts of policies one can buy, with various deductibles, terms, max limits, single or dual, etc.

Does anyone have a perspective on this? Thanks


When Met Life exited the business, that told me a lot. Look at the stock price of Genworth and ask yourself what that tells you. The industry is shrinking and that tells me there is still an issue with pricing these policies properly. Very low interest rates are not helping either.

edge
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Re: Long term care insurance - is it worth it?

Postby edge » Fri Jul 07, 2017 4:21 pm

Partnership policies are becoming more rare because of the inflation adjustment requirements.

pshonore wrote:
mrc wrote:
Rupert wrote:Read this horrifying story in the New York Times today: https://www.nytimes.com/2017/07/07/your ... ngine&_r=0

Then think about what the proposed changes to Medicaid in the healthcare legislation pending before Congress might mean for all of us. Even people like the woman in the story who worked hard, planned, saved, bought insurance, and had sophisticated children to help her end up destitute at the end. I'm not so much concerned for my own care as for my mother's in ten years or so. Her care might bankrupt me if Medicaid is no longer an option.


Moving away from the policy discussion (against the rules here) it's interesting to note her daughter is a medical social worker. Her son-in-law is a financial planner.

Moral of the story: Some will outlive their LTC coverage limits.
All the more reason to buy a partnership policy which allows one to protect assets up to the amount paid out by the LTC policy. Particularly important for a married couple.

edge
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Re: Long term care insurance - is it worth it?

Postby edge » Fri Jul 07, 2017 4:22 pm

This is a pretty scary policy. 100k in immediate premiums for a 170k death benefit - without the unlimited ltc rider?

jimishooch wrote:
pintail07 wrote:
edge wrote:Umm, not that I have seen. The hybrid policies allow you to drain the life insurance benefit or a portion thereof. They are not unlimited. And since life insurance payout is a certainty vs a potential the insurance co can price better.


pintail07 wrote:
edge wrote:There is a big misconception in the post quoted below and several others in this thread.

LTC policies do not cover tail risk. They just don't. It is not part of their design anymore and hasn't been for a very long time.

Some of the Hybrid policies cover for life and rates are guaranteed.


One company does cover lifetime benefits, it is a rider to the original policy. Typically if under 70 and in fair health the life annuity is the best deal, over 70 or with health issues the annuity hybrid works better. The net cost of these policies is the lost opportunity the deposit could have learned. I am meeting with a wealthy attorney tomorrow that read about these policies in the Law Review. Not for all, but for some a sfer bet than traditional LTC.


with rider lifetime benefits...

https://www.buaweb.com/cms/resource_lib ... ochure.pdf

pintail07
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Re: Long term care insurance - is it worth it?

Postby pintail07 » Fri Jul 07, 2017 4:27 pm

Regarding claims being paid, only problem claims are publicized out of millions of claims. Visit with nursing home claims department supervisors and ask them the companies that slow walk claims, I have and they all told me the very best company was Genworth

pintail07
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Re: Long term care insurance - is it worth it?

Postby pintail07 » Fri Jul 07, 2017 4:28 pm

edge wrote:This is a pretty scary policy. 100k in immediate premiums for a 170k death benefit - without the unlimited ltc rider?

jimishooch wrote:
pintail07 wrote:
edge wrote:Umm, not that I have seen. The hybrid policies allow you to drain the life insurance benefit or a portion thereof. They are not unlimited. And since life insurance payout is a certainty vs a potential the insurance co can price better.


pintail07 wrote:


One company does cover lifetime benefits, it is a rider to the original policy. Typically if under 70 and in fair health the life annuity is the best deal, over 70 or with health issues the annuity hybrid works better. The net cost of these policies is the lost opportunity the deposit could have learned. I am meeting with a wealthy attorney tomorrow that read about these policies in the Law Review. Not for all, but for some a sfer bet than traditional LTC.


with rider lifetime benefits...

https://www.buaweb.com/cms/resource_lib ... ochure.pdf


In my experience, no one buys these policies without the lifetime rider.

Alan S.
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Re: Long term care insurance - is it worth it?

Postby Alan S. » Fri Jul 07, 2017 6:56 pm

pintail07 wrote:Regarding claims being paid, only problem claims are publicized out of millions of claims. Visit with nursing home claims department supervisors and ask them the companies that slow walk claims, I have and they all told me the very best company was Genworth


Genworth's future in the LTC business may well hinge on the sale of the company to a Chinese firm as explained here: https://finance.yahoo.com/news/multibil ... 57151.html. Genworth's CEO has implied that the influx of capital from this sale is critical, but the sale may fall through.

Always take these articles with a grain of salt, but you cannot feel good about the recent history of Genworth in the LTC business given this article, the recent class action claim settlement for 219mm, and the CEOs comments regarding the LTC premium model.

pintail07
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Re: Long term care insurance - is it worth it?

Postby pintail07 » Fri Jul 07, 2017 7:35 pm

Alan S. wrote:
pintail07 wrote:Regarding claims being paid, only problem claims are publicized out of millions of claims. Visit with nursing home claims department supervisors and ask them the companies that slow walk claims, I have and they all told me the very best company was Genworth


Genworth's future in the LTC business may well hinge on the sale of the company to a Chinese firm as explained here: https://finance.yahoo.com/news/multibil ... 57151.html. Genworth's CEO has implied that the influx of capital from this sale is critical, but the sale may fall through.

Always take these articles with a grain of salt, but you cannot feel good about the recent history of Genworth in the LTC business given this article, the recent class action claim settlement for 219mm, and the CEOs comments regarding the LTC premium model.


I couldn't agree more. I quit offering Genworth years ago and most of my clients own Genworth. They were the cadillac of the industry at one time and they continue to pay claims. I couldn't recommend them because of their finances. The future of the LTC insurance industry, IMO, lies with the hybrid policies. I will post a summary of options, advantages and disadvantages. Unless one has experienced the impact of custodial care it may be difficult to really comprehend. My 52 year old brother had a massive stroke 2 months ago. Thank goodness he has insurance.

Chip
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Re: Long term care insurance - is it worth it?

Postby Chip » Sat Jul 08, 2017 5:19 am

pintail07 wrote:In my experience, no one buys these policies without the lifetime rider.


Can you give us an illustration of policy premiums with and without the rider?

For the example, let's say it's a 65 year old female in good health.

When you have the rider what is the maximum annual reimbursement rate after the initial death/LTC benefit is exhausted?

FBN2014
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Re: Long term care insurance - is it worth it?

Postby FBN2014 » Sat Jul 08, 2017 6:46 am

The largest provider of LTCI is Medicaid but for how much longer? I believe that more states will pass laws that allow them to attach liens to the Medicaid recipient's children's assets. I recall reading of a case in Pennsylvania where the son received a bill from the state for his mother's Medicaid expenditures. Boom times for eldercare lawyers. This entire discussion and the referenced article below and comments in the article prompts me to tell my kids to enjoy life, spend your money while your young and the hell with saving for retirement, die with as much debt as possible, because your going to lose it all anyway.

https://www.nytimes.com/2017/06/30/your ... s-you.html
Last edited by FBN2014 on Sat Jul 08, 2017 7:59 am, edited 3 times in total.

donall
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Re: Long term care insurance - is it worth it?

Postby donall » Sat Jul 08, 2017 7:23 am

From the economic: Maybe, but impossible to predict. In our case the LTCI paid out about 50% of amount paid for premiums, so not in our case.
From the psychological aspect: Yes, it was very comforting to know that money was not an issue during the last year.

pintail07
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Re: Long term care insurance - is it worth it?

Postby pintail07 » Sat Jul 08, 2017 8:24 am

Chip wrote:
pintail07 wrote:In my experience, no one buys these policies without the lifetime rider.


Can you give us an illustration of policy premiums with and without the rider?

For the example, let's say it's a 65 year old female in good health.

When you have the rider what is the maximum annual reimbursement rate after the initial death/LTC benefit is exhausted?


100,000 one time deposit
without rider 6000 per month for 25 months
with rider 5300 per month for life

Husband 64 wife 63
100,000 4500 per month each for life

or 6000 per year
4500 per month each

Chip
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Re: Long term care insurance - is it worth it?

Postby Chip » Sat Jul 08, 2017 9:12 am

pintail07 wrote:100,000 one time deposit
without rider 6000 per month for 25 months
with rider 5300 per month for life

Husband 64 wife 63
100,000 4500 per month each for life

or 6000 per year
4500 per month each


Thank you!

Just to be clear, in the first set of numbers, the premium is for a 65 year old single female. The rider is no additional cost, but LTC benefits are reduced (vs. the policy with no rider) from 6000 to 5300 per month. Correct?

The second set of numbers show either a lump sum purchase of the rider or an annual guaranteed premium for a 6,000 lifetime monthly LTC benefit for the couple. Correct?

After asking you the question in the prior post I found a policy illustration online here.

It appears to show the cost of the rider for a 6,000 monthly LTC benefit for a couple (62M,57F) to be about 41k (105k-64k; page 3 of the pdf). So I guess my next question would be why won't they just sell the rider without the life insurance? In other words, a $6,000 lifetime monthly benefit with a 25 month elimination period for 41k. THAT is something I'd consider purchasing.

pshonore
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Re: Long term care insurance - is it worth it?

Postby pshonore » Sat Jul 08, 2017 9:16 am

pintail07 wrote:
Chip wrote:
pintail07 wrote:In my experience, no one buys these policies without the lifetime rider.


Can you give us an illustration of policy premiums with and without the rider?

For the example, let's say it's a 65 year old female in good health.

When you have the rider what is the maximum annual reimbursement rate after the initial death/LTC benefit is exhausted?


100,000 one time deposit
without rider 6000 per month for 25 months
with rider 5300 per month for life

Husband 64 wife 63
100,000 4500 per month each for life

or 6000 per year
4500 per month each

In addition to the lifetime rider, you may need an inflation rider. For example 6K a month might pay half the monthly cost in a Connecticut facility today. When you submit a claim in 20 years, it may pay 25% of the cost. Where you live obviously makes a big difference.

Chip
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Re: Long term care insurance - is it worth it?

Postby Chip » Sat Jul 08, 2017 9:21 am

pshonore wrote:In addition to the lifetime rider, you may need an inflation rider. For example 6K a month might pay half the monthly cost in a Connecticut facility today. When you submit a claim in 20 years, it may pay 25% of the cost. Where you live obviously makes a big difference.


Right. The policy illustration I linked above also has costs for inflation-adjusted lifetime benefits (page 9 of the pdf). For 3% the cost goes from 41k to 108k. 5% is 194k.

pintail07
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Re: Long term care insurance - is it worth it?

Postby pintail07 » Sat Jul 08, 2017 9:49 am

Regarding inflation protection, one must weigh the cost versus the benefit. For example, it takes around 15 years for the benefit with inflation to match the initial benefit without inflation, assuming the same initial premium.

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TD2626
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Re: Long term care insurance - is it worth it?

Postby TD2626 » Sat Jul 08, 2017 10:31 am

pintail07 wrote:Regarding inflation protection, one must weigh the cost versus the benefit. For example, it takes around 15 years for the benefit with inflation to match the initial benefit without inflation, assuming the same initial premium.


That's why I think 3% inflation is reasonable - not 5% and not 0%. One only has a set amount they can afford to pay and going with 5% inflation results in very weak coverage for the early years of the policy. Frankly, one of the scariest scenarios are ones in which someone has, say, a stroke or a spinal cord injury in a accident in their 60's and needs 20+ years of care. It's not a good idea to get 5% and a policy that is inadequate for the next 15 years.

5% probably will go up higher than whatever actual inflation is, and 3% will probably keep pace, given what historical inflation is. Why not go with 3% as that's closest to what the true historical number is and it is more cost effective than 5%.

No inflation coverage is unwise in my opinion- in the event care is needed in 30 years, and there's been high inflation, the insurance will likely only pay for a tiny fraction of costs. Besides, I believe inflation protection is required in many states for it to be a partnership policy. (subject to an age limit, i.e. if you buy a policy when very old, there's less need for inflation protection).

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TD2626
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Re: Long term care insurance - is it worth it?

Postby TD2626 » Sat Jul 08, 2017 10:54 am

pintail07 wrote: The future of the LTC insurance industry, IMO, lies with the hybrid policies. I will post a summary of options, advantages and disadvantages.


I read over your summaries,but I disagree with hybrid policies.

One should not combine insurance with investing, in my opinion.

Whole life is rightly disliked by most Bogleheads - it is a often rip-off, representing essentially a bond investment (since that's where the insurance company puts most of the money) with high complexity and staggering costs. Why should a Boglehead suddenly decide to get whole life when there's a ltci rider tacked on?

In my opinion, it is much better to separate out the insurance and the investing. The insurance, if LTCI is needed, should be more plain-vanilla insurance. The investing should be stock/bond funds that you direct yourself. Because of the black box complexity and the fact that the insurance companies are likely investing actively instead of indexing, the implied expense ratio for the whole life part of the insurance is enormous - and not disclosed!

You also don't get to control asset allocation to suit your own risk tolerance (willingness/ability/need) in the whole life side of the policy. If you are willing to take on more risk in investing than the insurance company (and have more in stocks, tilt to small value, etc), and you invest with ultra-low expense ratio funds, you may do better than the company would do for you. The insurance company doesn't have access to any worthwhile investments that we all don't have access to via Vanguard funds.

The only thing that the insurance company is capable of that an individual investor isn't is risk pooling. With term life, the insurance company can take premiums from thousands and distribute them to the few who need the insurance. With LTCi, more need insurance but it's still got a risk pooling element if you go with plain vanilla insurance. Risk pooling is a good thing as it eliminates or reduces fat tail risk for a modest cost - that's why people buy insurance.

There is a big "opportunity cost" to paying $100,000 now instead of paying, say, $3000 in premiums over the next 30-35 years. You can invest the $100,000 in a three fund portfolio with a conservative AA and withdrawal $3000 a year for the next 30 - 35 years to pay annual premiums for plain vanilla insurance - and you would likely have more than $100,000 - possibly far more - than if you rolled over the lump sum to the insurance company now. Yes, maybe a 3% withdrawal rate will not end up working in a 3-fund portfolio, but in these sort of great depression scenarios there's a good chance the insurance company wouldn't be solvent.

FBN2014
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Re: Long term care insurance - is it worth it?

Postby FBN2014 » Sat Jul 08, 2017 11:08 am

TD2626 wrote:
pintail07 wrote:Regarding inflation protection, one must weigh the cost versus the benefit. For example, it takes around 15 years for the benefit with inflation to match the initial benefit without inflation, assuming the same initial premium.


That's why I think 3% inflation is reasonable - not 5% and not 0%. One only has a set amount they can afford to pay and going with 5% inflation results in very weak coverage for the early years of the policy. Frankly, one of the scariest scenarios are ones in which someone has, say, a stroke or a spinal cord injury in a accident in their 60's and needs 20+ years of care. It's not a good idea to get 5% and a policy that is inadequate for the next 15 years.

5% probably will go up higher than whatever actual inflation is, and 3% will probably keep pace, given what historical inflation is. Why not go with 3% as that's closest to what the true historical number is and it is more cost effective than 5%.

No inflation coverage is unwise in my opinion- in the event care is needed in 30 years, and there's been high inflation, the insurance will likely only pay for a tiny fraction of costs. Besides, I believe inflation protection is required in many states for it to be a partnership policy. (subject to an age limit, i.e. if you buy a policy when very old, there's less need for inflation protection).


This calculator shows the present cost of care by state and future costs based on 3% inflation.

https://www.genworth.com/about-us/indus ... -care.html

pintail07
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Re: Long term care insurance - is it worth it?

Postby pintail07 » Sat Jul 08, 2017 11:13 am

TD2626 wrote:
pintail07 wrote: The future of the LTC insurance industry, IMO, lies with the hybrid policies. I will post a summary of options, advantages and disadvantages.


I read over your summaries,but I disagree with hybrid policies.

They aren't suitable for soem folks.

One should not combine insurance with investing, in my opinion.

They are not buying these policies for the investment.

Whole life is rightly disliked by most Bogleheads - it is a often rip-off, representing essentially a bond investment (since that's where the insurance company puts most of the money) with high complexity and staggering costs. Why should a Boglehead suddenly decide to get whole life when there's a ltci rider tacked on?

The life insurance is a secondary benefit and allows the full deposit to be returned if benefits are not used.

In my opinion, it is much better to separate out the insurance and the investing. The insurance, if LTCI is needed, should be more plain-vanilla insurance. The investing should be stock/bond funds that you direct yourself. Because of the black box complexity and the fact that the insurance companies are likely investing actively instead of indexing, the implied expense ratio for the whole life part of the insurance is enormous - and not disclosed!

Focus on what is guaranteed, premium, benefit and benefit period. There are not any "plain vanilla' policies that offer coverage for a long tail claim, and no policies that guarantee premiums.

You also don't get to control asset allocation to suit your own risk tolerance (willingness/ability/need) in the whole life side of the policy. If you are willing to take on more risk in investing than the insurance company (and have more in stocks, tilt to small value, etc), and you invest with ultra-low expense ratio funds, you may do better than the company would do for you. The insurance company doesn't have access to any worthwhile investments that we all don't have access to via Vanguard funds.

Those buying these policies mostly are using assets that are currently in low interest cd's or such. Again, assets that being aggressively invested shouldn't be used.

The only thing that the insurance company is capable of that an individual investor isn't is risk pooling. With term life, the insurance company can take premiums from thousands and distribute them to the few who need the insurance. With LTCi, more need insurance but it's still got a risk pooling element if you go with plain vanilla insurance. Risk pooling is a good thing as it eliminates or reduces fat tail risk for a modest cost - that's why people buy insurance.

There is a big "opportunity cost" to paying $100,000 now instead of paying, say, $3000 in premiums over the next 30-35 years. You can invest the $100,000 in a three fund portfolio with a conservative AA and withdrawal $3000 a year for the next 30 - 35 years to pay annual premiums for plain vanilla insurance - and you would likely have more than $100,000 - possibly far more - than if you rolled over the lump sum to the insurance company now. Yes, maybe a 3% withdrawal rate will not end up working in a 3-fund portfolio, but in these sort of great depression scenarios there's a good chance the insurance company wouldn't be solvent.
..

Lost opportunity costs are negligible if using assets that are earning 1-1.5% after tax.

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TomatoTomahto
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Re: Long term care insurance - is it worth it?

Postby TomatoTomahto » Sat Jul 08, 2017 11:24 am

Index Fan wrote:One factor not often mentioned is- what if the insurance company disputes your claim?

There are horror stories out there online if you care to look for them. Think of how much hassle health insurers cause through outright denial of claims and one has to jump through hoops to get them to honor their agreements. Now, imagine yourself at an advanced age and of unsound mind and the LTC insurer disputes your claim. Who will fight for you?

I've seen enough insurance company BS to have little faith in them.

DW recently helped a relative deal with insurance issues. Shameless.

From Rupert's link
And pity those in their 70s or 80s who must navigate this morass without expert adult children or other advocates.


I'll self-insure, thank you.

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TD2626
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Re: Long term care insurance - is it worth it?

Postby TD2626 » Sat Jul 08, 2017 11:28 am

pintail07 wrote:Lost opportunity costs are negligible if using assets that are earning 1-1.5% after tax.


Yes, that's why the brochure (https://www.buaweb.com/cms/resource_lib ... ochure.pdf) said that the "hypothetical investors" in their illustration are using a $100,000 CD to buy the poicy (see the brochure, bottom-left of page 3).

If you have a 3-fund portfolio, though, and the $100k is coming out of there, the opportunity costs are very large.

Besides, even if you took the 100k out of fixed income, wouldn't you just rebalance out of stocks and bonds into fixed income?

Or does the purchase of an LTCI policy provide good reason to change your asset allocation to make it more aggressive - which is what the you and the brochure are suggesting?

In my opinion, for many, buying LTCI reduces need to take risk, increases ability to take risk, and keeps willingness constant. These sortof cancel, leaving a constant AA.

dbr
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Re: Long term care insurance - is it worth it?

Postby dbr » Sat Jul 08, 2017 11:40 am

TD2626 wrote:
In my opinion, for many, buying LTCI reduces need to take risk, increases ability to take risk, and keeps willingness constant. These sortof cancel, leaving a constant AA.


The standard answer is that one takes no more risk than one needs to take, therefore reduced need means investing more conservatively. One might say the policy should be purchased out of equities because the return needed to support larger expenses is no longer needed. Others might consider LTCI to be insurance not of income but of assets intended as legacies and feel prepared to invest more aggresively to grow the legacy. That would be called re-evaluating the need to take risk.

pintail07
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Re: Long term care insurance - is it worth it?

Postby pintail07 » Sat Jul 08, 2017 4:18 pm

dbr wrote:
TD2626 wrote:
In my opinion, for many, buying LTCI reduces need to take risk, increases ability to take risk, and keeps willingness constant. These sortof cancel, leaving a constant AA.


The standard answer is that one takes no more risk than one needs to take, therefore reduced need means investing more conservatively. One might say the policy should be purchased out of equities because the return needed to support larger expenses is no longer needed. Others might consider LTCI to be insurance not of income but of assets intended as legacies and feel prepared to invest more aggresively to grow the legacy. That would be called re-evaluating the need to take risk.


Recent client with no heirs didn't want a long term care event impact their charitable bequests, covering future expenses, and the ability to continue investing for max long term growth.

Diogenes
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Re: Long term care insurance - is it worth it?

Postby Diogenes » Sun Jul 09, 2017 12:30 am

pintail07 wrote:
dbr wrote:
TD2626 wrote:
In my opinion, for many, buying LTCI reduces need to take risk, increases ability to take risk, and keeps willingness constant. These sortof cancel, leaving a constant AA.


The standard answer is that one takes no more risk than one needs to take, therefore reduced need means investing more conservatively. One might say the policy should be purchased out of equities because the return needed to support larger expenses is no longer needed. Others might consider LTCI to be insurance not of income but of assets intended as legacies and feel prepared to invest more aggresively to grow the legacy. That would be called re-evaluating the need to take risk.


Recent client with no heirs didn't want a long term care event impact their charitable bequests, covering future expenses, and the ability to continue investing for max long term growth.


If someone spends the $100k now to buy one of these hybrid policies, care to share what the immediate commission to the salesman is?
Truth and clarity are important in all things...

itstoomuch
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Re: Long term care insurance - is it worth it?

Postby itstoomuch » Sun Jul 09, 2017 1:14 am

is it worth it?
For whom? Buyer, seller, intended person, salesperson, health-care providers, governments?
What would make IT worthwhile? What are your metrics?
4 buckets: SS+pension;dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rental. Do OK any 2 bkts. LTCi. Own, not asset. Tax 25%. Early SS. FundingRatio (FR) >1.1 Age 67/70

pintail07
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Re: Long term care insurance - is it worth it?

Postby pintail07 » Sun Jul 09, 2017 7:30 am

Diogenes wrote:
pintail07 wrote:
dbr wrote:
TD2626 wrote:
In my opinion, for many, buying LTCI reduces need to take risk, increases ability to take risk, and keeps willingness constant. These sortof cancel, leaving a constant AA.


The standard answer is that one takes no more risk than one needs to take, therefore reduced need means investing more conservatively. One might say the policy should be purchased out of equities because the return needed to support larger expenses is no longer needed. Others might consider LTCI to be insurance not of income but of assets intended as legacies and feel prepared to invest more aggresively to grow the legacy. That would be called re-evaluating the need to take risk.


Recent client with no heirs didn't want a long term care event impact their charitable bequests, covering future expenses, and the ability to continue investing for max long term growth.


If someone spends the $100k now to buy one of these hybrid policies, care to share what the immediate commission to the salesman is?



4-6%

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TD2626
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Re: Long term care insurance - is it worth it?

Postby TD2626 » Sun Jul 09, 2017 10:09 am

itstoomuch wrote:is it worth it?
For whom? Buyer, seller, intended person, salesperson, health-care providers, governments?
What would make IT worthwhile? What are your metrics?


Is it worth: (with metrics):

Buyer: It is worth it only if the cost of the insurance is fairly compensated by a reduction in the risk of catastrophic LTC expenses and the ability to choose one's own setting and quality of care.

Seller/Insurance Company: It is worth if they are able to provide a valuable service to customers while making money and not taking on too much risk. If their actuaries mess up and price the policy too low or underestimate the risk, it wouldn't be worth it to the company.

Salesperson/Agent: It is basically always worth it for them to sell policies, unless the policy sold is so clearly unsuitable to a client that it exposes them to liability concerns.

Healthcare providers: It would probably be a small benefit. Some nursing homes dislike how little medicaid pays and prefer self-pay, while having to deal with only one payer (the government) is probably easier for the healthcare providers to process. With more people insured, more may get paid care and use their services, as well (instead of relying on friends or family for unpaid care).

Government: Probably would be a positive as it reduces cost for government programs.

To sum it up, "Is it worth it" -- Buyer=maybe, seller=probably, salesperson=yes, healthcare providers/government=yes

The hardest choices have to be made by the buyer.

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TD2626
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Re: Long term care insurance - is it worth it?

Postby TD2626 » Sun Jul 09, 2017 10:14 am

pintail07 wrote:
Diogenes wrote:
pintail07 wrote:
dbr wrote:
TD2626 wrote:
In my opinion, for many, buying LTCI reduces need to take risk, increases ability to take risk, and keeps willingness constant. These sortof cancel, leaving a constant AA.


The standard answer is that one takes no more risk than one needs to take, therefore reduced need means investing more conservatively. One might say the policy should be purchased out of equities because the return needed to support larger expenses is no longer needed. Others might consider LTCI to be insurance not of income but of assets intended as legacies and feel prepared to invest more aggresively to grow the legacy. That would be called re-evaluating the need to take risk.


Recent client with no heirs didn't want a long term care event impact their charitable bequests, covering future expenses, and the ability to continue investing for max long term growth.


If someone spends the $100k now to buy one of these hybrid policies, care to share what the immediate commission to the salesman is?



4-6%


Thank you for answering. We certainty value your great depth of experience and expertise, but it's important to know where people are coming from. That 4-6% is pretty impressive.

I presume if someone signs up for a "plain vanilla" policy with, say, $3000 a year in premiums the payout would be less? What's that like?

pintail07
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Re: Long term care insurance - is it worth it?

Postby pintail07 » Sun Jul 09, 2017 10:30 am

TD2626 wrote:
pintail07 wrote:
Diogenes wrote:
pintail07 wrote:
dbr wrote:
The standard answer is that one takes no more risk than one needs to take, therefore reduced need means investing more conservatively. One might say the policy should be purchased out of equities because the return needed to support larger expenses is no longer needed. Others might consider LTCI to be insurance not of income but of assets intended as legacies and feel prepared to invest more aggresively to grow the legacy. That would be called re-evaluating the need to take risk.


Recent client with no heirs didn't want a long term care event impact their charitable bequests, covering future expenses, and the ability to continue investing for max long term growth.


If someone spends the $100k now to buy one of these hybrid policies, care to share what the immediate commission to the salesman is?



4-6%


Thank you for answering. We certainty value your great depth of experience and expertise, but it's important to know where people are coming from. That 4-6% is pretty impressive.

I presume if someone signs up for a "plain vanilla" policy with, say, $3000 a year in premiums the payout would be less? What's that like?


Commissions are what they are, brokers have no say, company sets commissions based on their assumptions. 4-6% on yearly premium and 50-60% first year on traditional policies. I disclose my commissions up front when asked.

RudyS
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Re: Long term care insurance - is it worth it?

Postby RudyS » Sun Jul 09, 2017 9:40 pm

bklyn96 wrote:
Jackson12 wrote:....
Do long-term insurance companies do their own assessments of client conditions ( using a nurse or other medical pridessional they're chosen) or do they do a combination of their own assessments as well as a detailed look at an individual's records from their doctor?....I just wonder how much wiggle room exists for the insurance companies.


My wife has been receiving benefits on her MetLife LTC policy for two years. When she applied back in 2015 the requirements were:

(1) The names and contact info for any doctor she had seen in the five years prior to applying for benefits
(2) An in-person interview with a nurse working for MetLife
(3) If approved for benefits, MetLife also must review and approve the care provider


Disturbing that MetLife gets to approve (or choose) the provided. I have a friend whose mom was very dissatisfied with the provider she was forced to use. Why isn't it (or can't it) be that the insurerjust pays out till the policy limit is used up? Or are they trying to avoid ever getting to that point? Ugh.

TN_Boy
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Re: Long term care insurance - is it worth it?

Postby TN_Boy » Mon Jul 10, 2017 8:25 am

bsteiner wrote:
Alan S. wrote:... if you do purchase coverage, do not shoot for full coverage of the worst case scenario. Target the limit for the average case at most.


Insurance for the average case is more like prepaying an expense than insurance. The concern is if you're the one who needs care for a very long time. There should be policies that pay unlimited benefits, but with a 2 or 3 year waiting period.


I agree, and I haven't heard a good explanation for why that is so. I think a lot of people (well, people with good but not overwhelming retirement savings) would have the ability to handle three years of assisted living for both themselves and a spouse (savings for one spouse, then perhaps proceeds of home sale for the second) but could not handle outlier cases like one (or both) spouse spending 10 years in a facility.

Given that the median stay in assisted living is something like 21 months, a policy with a three year exclusion policy might actually be affordable. I could also live with a less than unlimited benefit, as long it as covered a fairly lengthy stay.

This sort of "high-deductible" LTC plan would of course only help the better-off subset of retirees. Those without the resources to handle a couple of years of care (150k or so) wouldn't be helped.

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SeeMoe
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Re: Long term care insurance - is it worth it?

Postby SeeMoe » Mon Jul 10, 2017 12:51 pm

Vanguard Fan 1367 wrote:The great Dave Ramsey suggested getting Long Term Care insurance at around 60 so I took his advice. My sister, who works in insurance, decided to self fund. After a couple of years of over 4k premiums the cost went up to over 5k for me and my wife. I decided to cancel the policy after paying about 15k and self fund also.

Other threads have talked about the increasing cost of long term policies. That certainly has been my experience.


OUCH! That is revealing and timely for us. Other posts here also mention the premiums going up as one ages too. My relative has LTC with big deductibles and, at age 71, had a stroke putting him in the assisted living unit of the CCRC where they reside. Haven't heard anything about LTC claims yet, but know he is running up the meter for care...

SeeMoe.. :shock:
"By gnawing through a dike, even a Rat can destroy a nation ." {Edmund Burke}

itstoomuch
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Re: Long term care insurance - is it worth it?

Postby itstoomuch » Mon Jul 10, 2017 5:52 pm

It'$ only a matter of time when whole life and other cash value life insurance will be marketed as life insurance with LTC benefits.. :oops: :annoyed
4 buckets: SS+pension;dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rental. Do OK any 2 bkts. LTCi. Own, not asset. Tax 25%. Early SS. FundingRatio (FR) >1.1 Age 67/70

FBN2014
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Re: Long term care insurance - is it worth it?

Postby FBN2014 » Mon Jul 10, 2017 6:22 pm

itstoomuch wrote:It'$ only a matter of time when whole life and other cash value life insurance will be marketed as life insurance with LTC benefits.. :oops: :annoyed


It already is being marketed as such, carriers call it "living benefits" to appeal to the market. The "benefits" are just an advanced payment of the death benefit.

TravelforFun
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Re: Long term care insurance - is it worth it?

Postby TravelforFun » Mon Jul 10, 2017 8:09 pm

FBN2014 wrote:
itstoomuch wrote:It'$ only a matter of time when whole life and other cash value life insurance will be marketed as life insurance with LTC benefits.. :oops: :annoyed


It already is being marketed as such, carriers call it "living benefits" to appeal to the market. The "benefits" are just an advanced payment of the death benefit.

Wouldn't cover your LTC if you outlive your life insurance policy.

Diogenes
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Re: Long term care insurance - is it worth it?

Postby Diogenes » Tue Jul 11, 2017 12:04 am

pintail07 wrote:
Chip wrote:
pintail07 wrote:In my experience, no one buys these policies without the lifetime rider.


Can you give us an illustration of policy premiums with and without the rider?

For the example, let's say it's a 65 year old female in good health.

When you have the rider what is the maximum annual reimbursement rate after the initial death/LTC benefit is exhausted?


100,000 one time deposit
without rider 6000 per month for 25 months
with rider 5300 per month for life

Husband 64 wife 63
100,000 4500 per month each for life

or 6000 per year
4500 per month each


So for 100K paid up front, the salesman takes 4-6K off the top, and the buyer gets a 6K per month for 25 months (150K max) or 5.3K per month for life (132.5K over 25 months, average stay 28 months).
Good deal for the salesman, but can't see how it is good for anyone else. Especially when you factor in a good chance of difficulty in collecting when you have the least patience for that sort of thing. Why shouldn't I leave my 100K somewhere earning interest until I need it instead?
Seems like an emotional play, like whole life.
Truth and clarity are important in all things...

dowse
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Re: Long term care insurance - is it worth it?

Postby dowse » Tue Jul 11, 2017 7:29 am

Make accurate premium payments: http://www.bostonglobe.com/business/201 ... newsletter. The consequences of a small error could have been easily avoided if this lady's loved ones had been paying attention and helping her with her finances, provided she had someone she trusted to do so and could recognize that she needed help.

pintail07
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Re: Long term care insurance - is it worth it?

Postby pintail07 » Tue Jul 11, 2017 8:13 am

So for 100K paid up front, the salesman takes 4-6K off the top, and the buyer gets a 6K per month for 25 months (150K max) or 5.3K per month for life (132.5K over 25 months, average stay 28 months).
Good deal for the salesman, but can't see how it is good for anyone else. Especially when you factor in a good chance of difficulty in collecting when you have the least patience for that sort of thing. Why shouldn't I leave my 100K somewhere earning interest until I need it instead?
Seems like an emotional play, like whole life.


One always gets all their money back either in claims or death benefit. If you have a claim that lasts longer than 25 months you get much more than the deposit. If you have a long tail claim it is a huge difference. I call that a pretty deal for the insured. There certainly isn't a "good chance of difficulty" collecting. The overwhelming amount are no difficulty at all. As stated previously, the policy isn't for everyone, but it seems to be for some.

pintail07
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Re: Long term care insurance - is it worth it?

Postby pintail07 » Tue Jul 11, 2017 8:16 am

So for 100K paid up front, the salesman takes 4-6K off the top, and the buyer gets a 6K per month for 25 months (150K max) or 5.3K per month for life (132.5K over 25 months, average stay 28 months).
Good deal for the salesman, but can't see how it is good for anyone else. Especially when you factor in a good chance of difficulty in collecting when you have the least patience for that sort of thing. Why shouldn't I leave my 100K somewhere earning interest until I need it instead?
Seems like an emotional play, like whole life.


One always gets all their money back either in claims or death benefit. If you have a claim that lasts longer than 25 months you get much more than the deposit. If you have a long tail claim it is a huge difference. I call that a pretty deal for the insured. There certainly isn't a "good chance of difficulty" collecting. The overwhelming amount are no difficulty at all. As stated previously, the policy isn't for everyone, but it seems to be for some. You might view that as an emotional play, but some want to view all option regarding LTCI.

itstoomuch
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Re: Long term care insurance - is it worth it?

Postby itstoomuch » Wed Jul 12, 2017 12:15 am

FBN2014 wrote:The largest provider of LTCI is Medicaid but for how much longer? I believe that more states will pass laws that allow them to attach liens to the Medicaid recipient's children's assets. I recall reading of a case in Pennsylvania where the son received a bill from the state for his mother's Medicaid expenditures. Boom times for eldercare lawyers. This entire discussion and the referenced article below and comments in the article prompts me to tell my kids to enjoy life, spend your money while your young and the hell with saving for retirement, die with as much debt as possible, because your going to lose it all anyway.

https://www.nytimes.com/2017/06/30/your ... s-you.html


by TD2626 » 09 Jul 2017 08:09

itstoomuch wrote wrote::
is it worth it?
For whom? Buyer, seller, intended person, salesperson, health-care providers, governments?
What would make IT worthwhile? What are your metrics?



Is it worth: (with metrics):

Buyer: It is worth it only if the cost of the insurance is fairly compensated by a reduction in the risk of catastrophic LTC expenses and the ability to choose one's own setting and quality of care.

Seller/Insurance Company: It is worth if they are able to provide a valuable service to customers while making money and not taking on too much risk. If their actuaries mess up and price the policy too low or underestimate the risk, it wouldn't be worth it to the company.

Salesperson/Agent: It is basically always worth it for them to sell policies, unless the policy sold is so clearly unsuitable to a client that it exposes them to liability concerns.

Healthcare providers: It would probably be a small benefit. Some nursing homes dislike how little medicaid pays and prefer self-pay, while having to deal with only one payer (the government) is probably easier for the healthcare providers to process. With more people insured, more may get paid care and use their services, as well (instead of relying on friends or family for unpaid care).

Government: Probably would be a positive as it reduces cost for government programs.

To sum it up, "Is it worth it" -- Buyer=maybe, seller=probably, salesperson=yes, healthcare providers/government=yes

The hardest choices have to be made by the buyer.


Your children will now ask this question of you. "Why wasn't LTCi worth it?"
http://seniorcarecorner.com/responsible ... or-parents
"...snip
So the time has come, your senior is now living in a long term care facility where all her needs are being managed. Time marches on and your senior has passed on. To your surprise, you receive a notice from the state Medicaid Recovery Unit asking, well more like demanding, you pay for your senior’s bill incurred while she was receiving care under the Medicaid program in a facility.
WHAT??!!
Filial Support Laws and Repayment of Unpaid LTC Bills
Twenty nine US states have filial support laws that can be used to charge adult children who are caregivers for the unpaid long term care bills of their parents. Pennsylvania is a leader in applying this law, South Dakota has filed a few claims and other states, who find themselves needing to fund state Medicaid programs, may look to adult children for re-payment of bills not paid because Medicaid applications were not made by the adult children for whatever reason, such as lack of awareness, lack of access to financial records, inattention/refusal or urgent nature of care required.
snip..."

YHeirsMoneyMV :oops: :annoyed
4 buckets: SS+pension;dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rental. Do OK any 2 bkts. LTCi. Own, not asset. Tax 25%. Early SS. FundingRatio (FR) >1.1 Age 67/70

Diogenes
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Re: Long term care insurance - is it worth it?

Postby Diogenes » Wed Jul 12, 2017 1:07 pm

pintail07 wrote:
So for 100K paid up front, the salesman takes 4-6K off the top, and the buyer gets a 6K per month for 25 months (150K max) or 5.3K per month for life (132.5K over 25 months, average stay 28 months).
Good deal for the salesman, but can't see how it is good for anyone else. Especially when you factor in a good chance of difficulty in collecting when you have the least patience for that sort of thing. Why shouldn't I leave my 100K somewhere earning interest until I need it instead?
Seems like an emotional play, like whole life.


One always gets all their money back either in claims or death benefit. If you have a claim that lasts longer than 25 months you get much more than the deposit. If you have a long tail claim it is a huge difference. I call that a pretty deal for the insured. There certainly isn't a "good chance of difficulty" collecting. The overwhelming amount are no difficulty at all. As stated previously, the policy isn't for everyone, but it seems to be for some. You might view that as an emotional play, but some want to view all option regarding LTCI.


So...if everyone always gets their money back, at minimum, explain how the company makes money to pay their costs, profit, long tail risk of other policies, and your $4000-$6000 upfront commission? Are you saying that the customer who writes the $100,000 check bears no risk?
Unless I misunderstood your response, it sounds very similar to the Whole Life pitch.
Truth and clarity are important in all things...


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