Long term care insurance - is it worth it?
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Re: Long term care insurance - is it worth it?
^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.
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.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
Re: Long term care insurance - is it worth it?
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 wrote: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?pintail07 wrote: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 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.
Unless I misunderstood your response, it sounds very similar to the Whole Life pitch.
Re: Long term care insurance - is it worth it?
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 wrote:Diogenes wrote: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.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.
Re: Long term care insurance - is it worth it?
Looks like a plan. But, my question was how to plan for a long tail claim? Good luck.
Re: Long term care insurance - is it worth it?
Which tax sheltered investment do you mean?Diogenes wrote: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 wrote:Diogenes wrote: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.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.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain
Re: Long term care insurance - is it worth it?
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.
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Re: Long term care insurance - is it worth it?
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.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.
Re: Long term care insurance - is it worth it?
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.
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.
Re: Long term care insurance - is it worth it?
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.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain
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- Posts: 5343
- Joined: Mon Dec 15, 2014 11:17 am
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Re: Long term care insurance - is it worth it?
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
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
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
Re: Long term care insurance - is it worth it?
Can you explain this better? My understanding is that although a SPIA would protect assets (not considered an asset) the income would preclude you from getting Medicaid.mnnice wrote: ↑Thu Jul 06, 2017 7:40 am @Neilpilot
I'm not sure that is quite true that is the only option. The healthy "community" spouse can by a SPIA after the first goes to skilled care situation and live off the monthly annuity proceeds. That greatly reduces the odds of any legacy but it keeps the healthy spouse from eating cat food
If we all had access to the deal you have LTCi would be a more obvious choice. My great aunt paid LTCi premiums for 30 years. When she actually need care she was already broke and went to Medicaid and died about the same time the elimination period ended.