Long term care insurance - is it worth it?

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itstoomuch
Posts: 4727
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

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

Post by itstoomuch » Wed Jul 12, 2017 1:46 pm

^LOL.
May be the only way that Insurance can make $ on LTCi...by limiting the tail end risk to paid premiums. But at the same time gives the buyer a return on the premium if the insured dies before using up the CV benefit.

That's why it's called Risk Management. :oops:
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

pintail07
Posts: 261
Joined: Fri Nov 04, 2016 5:07 pm

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

Post by pintail07 » Wed Jul 12, 2017 4:28 pm

Diogenes wrote:
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.
Risk management and your lost opportunity cost on the deposit is their gain. Life benefit is a secondary benefit. Can you suggest a better way to cover the risk of a long tail claim less expensively? The customer bears no risk as long as held till death, all money returned plus, contractually guaranteed or returned in the form of a claim.

Diogenes
Posts: 512
Joined: Sat Mar 03, 2012 3:58 pm

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

Post by Diogenes » Sun Jul 16, 2017 12:13 am

pintail07 wrote:
Diogenes wrote:
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.

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.
Risk management and your lost opportunity cost on the deposit is their gain. Life benefit is a secondary benefit. Can you suggest a better way to cover the risk of a long tail claim less expensively? The customer bears no risk as long as held till death, all money returned plus, contractually guaranteed or returned in the form of a claim.
Actually, yes I can. Instead of writing a $100,000 check today, I suggest self-insuring by investing the money in a dedicated tax sheltered investment. No worries about longterm risk of the insurance company not being around in 30 years, or changing the rules, or slow-walking claims. By doing that, an immediate 4-6 percent return is realized on day 1 also. Sorry, I just can't see value added by this product that would overcome the loss of control over liquid assets.

pintail07
Posts: 261
Joined: Fri Nov 04, 2016 5:07 pm

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

Post by pintail07 » Sun Jul 16, 2017 8:47 am

Looks like a plan. But, my question was how to plan for a long tail claim? Good luck.

FBN2014
Posts: 224
Joined: Sat Mar 08, 2014 3:07 pm

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

Post by FBN2014 » Sun Jul 16, 2017 8:50 am

Diogenes wrote:
pintail07 wrote:
Diogenes wrote:
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.

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.
Risk management and your lost opportunity cost on the deposit is their gain. Life benefit is a secondary benefit. Can you suggest a better way to cover the risk of a long tail claim less expensively? The customer bears no risk as long as held till death, all money returned plus, contractually guaranteed or returned in the form of a claim.
Actually, yes I can. Instead of writing a $100,000 check today, I suggest self-insuring by investing the money in a dedicated tax sheltered investment. No worries about longterm risk of the insurance company not being around in 30 years, or changing the rules, or slow-walking claims. By doing that, an immediate 4-6 percent return is realized on day 1 also. Sorry, I just can't see value added by this product that would overcome the loss of control over liquid assets.
Which tax sheltered investment do you mean?

seafood
Posts: 8
Joined: Wed Jun 08, 2016 7:39 pm

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

Post by seafood » Sun Jul 16, 2017 10:46 am

My personal long term care insurance is to have a good living will and a medical POA that understands my wishes. My SO and I both agree that if either of us were in such a debilitated state that we could not feed ourself, do most toileting on our own then we may be at a point where the quality of life is no longer acceptable, unless of course it looks like this is a reversible condition. We would choose not to treat the next illness that came along: urinary tract infection, pneumonia, etc and pass on into the great good night. I would personally be angry at my family if they depleted all of my assets that I had worked so hard to build to just to keep my alive if I did not have any real quality of life left.

TravelforFun
Posts: 847
Joined: Tue Dec 04, 2012 11:05 pm

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

Post by TravelforFun » Sun Jul 16, 2017 12:58 pm

seafood wrote:My personal long term care insurance is to have a good living will and a medical POA that understands my wishes. My SO and I both agree that if either of us were in such a debilitated state that we could not feed ourself, do most toileting on our own then we may be at a point where the quality of life is no longer acceptable, unless of course it looks like this is a reversible condition. We would choose not to treat the next illness that came along: urinary tract infection, pneumonia, etc and pass on into the great good night. I would personally be angry at my family if they depleted all of my assets that I had worked so hard to build to just to keep my alive if I did not have any real quality of life left.
I hope your plan works. I have heard ppl often change their mind when they're at that point which makes sense. The will to live is just evolutionary.

golfer292
Posts: 11
Joined: Mon Mar 13, 2017 8:40 am

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

Post by golfer292 » Fri Nov 10, 2017 1:15 pm

I am again facing yearly decision about long term care. I have been with Genworth Since 2005. I have paid out 14k in premiums for these promised benefits:

Benefit Summary (as of 11/09/2017)

Original Lifetime Maximum Amount:
$204,400.00
Original Benefit Amount:
$140.00 / Day

Current Lifetime Maximum Amount:
$327,040.00
Current Benefit Amount: 1
$224.00 / Day

Inflation Protection:
Simple 5%
Partnership:
No

Elimination/Deductible Period:
90 Days
Benefit Multiplier:
1460 Days

I received letter today announcing 20% increase for 2018. New premium will be $2102.00 yearly. Premiums were 11k annually 2005 through 2015. 7% and 10% increase in 2016 & 2017. I have been offered reduction in benefits doubling elimination period to180 days for $1884.00 yearly, or reducing benefit period to 3 years from 4 years for $1864.00 yearly, or reducing daily benefit to $160.00 from $231.00
Final option offered is to allow me to make no more payments and keep 90 day elimination period with maximum payout amount equal to the amount of premiums I have paid which is 14k. I am down to keeping with the new premium for maximum benefits or stopping payments and getting the 14k back if I need LTC.

I am 69, in good health with no one dependent on my financial support. I have no debt and net worth of approximately 500k. Any advice? I have read all the info on this and other sites. There has not been much said about companies offering the option on receiving the amount of premiums paid back and making no further payments.

FBN2014
Posts: 224
Joined: Sat Mar 08, 2014 3:07 pm

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

Post by FBN2014 » Fri Nov 10, 2017 1:33 pm

I would look into the asset based LTCI policies offered through Lincoln National, Nationwide, and One America (State Life). Most likely you can buy a higher benefit amount, return of premium, and a death benefit using these products. Seek out an insurance agent who specializes in LTCI.

itstoomuch
Posts: 4727
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

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

Post by itstoomuch » Fri Nov 10, 2017 1:46 pm

Original plan, is to use LTCi as method to prolong the retirement assets, reduce the probability of a forced sale of assets, enable us to better allocate retirement assets for higher returns, and for inheritance enhancements. About 15 yrs into current LTCi, single policies with couple discount, 5% compounding, about $210/day max benefit each, 1025 days (3 yrs), 30 day deductible, relieving spouse of full categorizing responsibility (we have cared for 4 family members at home, by ourselves. Takes a lot of sacrifice and dedication) And able to chose how,when, where, and by whom, we would want our ltc; About $3000/yr combined premiums. About 5-8% of gross income. Tax deductible in current situation.

Will likely reduce coverage on next increase. Our need for LTCi is reduced since we have relatively high featured annuities and other income secure/low volatility income streams, and a self-supporting heir.
Ymmv :mrgreen:
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

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