This is ridiculously expensive LTCi, right? Or maybe not?

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Gnirk
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by Gnirk » Sat Jun 23, 2018 9:14 pm

Sounds a bit pricey, but then we never know what will happen in life. My very healthy mother, absolutely no physical issues, fit, active, etc developed Alzheimer's disease at the age of 78. And she was the poster girl for the alzheimers-prevention lifestyle! Long story short, she was under care for 8 years (age 82-90)at a private care home that specialized in dementia. She received excellent care, by the way. Today, that care runs $6,500 to $7,500 per month, not including depends, medication-if any-and medical care. A good nursing home costs $10,000 per month and up, but in my opinion she received better care in the private care home. Her LTC covered, if I remember right, a total of $204,000 over a four-year period, with a 30-day waiting period. The remaining costs and additional four years were private pay. However, her total premiums paid in for the previous 20 years was around $1,000 per year, or less.
Yes, LTCI is a gamble, but sometimes it's needed for much longer than anticipated, and a lifetime policy is unheard of these days ( though if they can just cancel it, that pretty much sucks!!).

AlwaysWannaLearn
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by AlwaysWannaLearn » Sat Jun 23, 2018 9:32 pm

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Last edited by AlwaysWannaLearn on Wed Jul 18, 2018 11:08 pm, edited 1 time in total.

randomguy
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by randomguy » Sun Jun 24, 2018 8:08 am

FIREchief wrote:
Sat Jun 23, 2018 7:38 pm
randomguy wrote:
Sat Jun 23, 2018 5:52 pm
FIREchief wrote:
Fri Jun 22, 2018 2:46 pm
It sounds like if she pays the last 4 years @ $22K/yr she'll have about $190,000 total invested. Is this correct? If so, having an $8000 per month benefit for what could be a decade or more sounds like pretty cheap insurance. Breakeven would be less than two years in SNF. Did I miss something?
20+ years of gains that push the break even out to say 6 years. Most people die well before then. But there are some outliers that live 10+ years.

Personally I think this is a poor choice. Better to self insure and if the kids get less on an inheritance, oh well. I would rather she spend the money on herself. I know other people feel differently about this
I don't believe that most of us in this thread have placed any focus on what is good for the kids. Based upon the OP's original post, his mother is right at the brink of a 4% SWR, without covering the expenses of LTC. You're right, most people would not break even on this type of insurance. Isn't that true of all insurance?? You insure against the extreme case, understanding that you'll likely never take "maximum" advantage of your coverage. That's not why we buy insurance.
Right now she is at 80k of expenses including 17k of LTCI. She has 2 million dollars and ~12k/year of ss. That is a less than 3% SWR from the portfolio if she wasn't buying LTCI. That is the level where you can expect your portfolio to keep on growing.

What happens if she turns 80 and has to pay 100k/year for LTC? She will likely have 30-40+ years of money available to cover the expense. You buy insurance to cover risks you can't handle. She can handle the cost. And it should always be pointed out even if you lose this bet your are not homeless living on the street. You transition to medicaid which is normally in the same facility that you have been paying for over the previous 20 years. So why is she buying this insurance other than to make sure there is an inheritance? There might be some sleep well at night factor or it could have been a misunderstanding (i.e. maybe she thought she would pay the 200k and when she died there she would get back any of the 200k that wasn't used. I.E. should would have just paid opportunity cost for the protection).

WillRetire
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by WillRetire » Sun Jun 24, 2018 8:16 am

randomguy wrote:
Sun Jun 24, 2018 8:08 am
FIREchief wrote:
Sat Jun 23, 2018 7:38 pm
randomguy wrote:
Sat Jun 23, 2018 5:52 pm
FIREchief wrote:
Fri Jun 22, 2018 2:46 pm
It sounds like if she pays the last 4 years @ $22K/yr she'll have about $190,000 total invested. Is this correct? If so, having an $8000 per month benefit for what could be a decade or more sounds like pretty cheap insurance. Breakeven would be less than two years in SNF. Did I miss something?
20+ years of gains that push the break even out to say 6 years. Most people die well before then. But there are some outliers that live 10+ years.

Personally I think this is a poor choice. Better to self insure and if the kids get less on an inheritance, oh well. I would rather she spend the money on herself. I know other people feel differently about this
I don't believe that most of us in this thread have placed any focus on what is good for the kids. Based upon the OP's original post, his mother is right at the brink of a 4% SWR, without covering the expenses of LTC. You're right, most people would not break even on this type of insurance. Isn't that true of all insurance?? You insure against the extreme case, understanding that you'll likely never take "maximum" advantage of your coverage. That's not why we buy insurance.
Right now she is at 80k of expenses including 17k of LTCI. She has 2 million dollars and ~12k/year of ss. That is a less than 3% SWR from the portfolio if she wasn't buying LTCI. That is the level where you can expect your portfolio to keep on growing.

What happens if she turns 80 and has to pay 100k/year for LTC? She will likely have 30-40+ years of money available to cover the expense. You buy insurance to cover risks you can't handle. She can handle the cost. And it should always be pointed out even if you lose this bet your are not homeless living on the street. You transition to medicaid which is normally in the same facility that you have been paying for over the previous 20 years. So why is she buying this insurance other than to make sure there is an inheritance? There might be some sleep well at night factor or it could have been a misunderstanding (i.e. maybe she thought she would pay the 200k and when she died there she would get back any of the 200k that wasn't used. I.E. should would have just paid opportunity cost for the protection).
The case for buying/keeping a good LTCi policy even if you can afford to self-insure is 3-fold:
1. Piece of mind, as with most insurance
2. Freedom to spend & enjoy your investments while healthy
3. Reducing risk that a prolonged long-term care stay impacts family's finances

By all means, if you can tell me exactly how long I will need long-term care, AND how much it will cost, then I can calculate right now how much I'll need & whether I can afford to self-insure.

The problem is: you don't know. An accident or illness can occur any time. These things cannot be predicted.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by randomguy » Sun Jun 24, 2018 8:51 am

WillRetire wrote:
Sun Jun 24, 2018 8:16 am

The case for buying/keeping a good LTCi policy even if you can afford to self-insure is 3-fold:
1. Piece of mind, as with most insurance
2. Freedom to spend & enjoy your investments while healthy
3. Reducing risk that a prolonged long-term care stay impacts family's finances

By all means, if you can tell me exactly how long I will need long-term care, AND how much it will cost, then I can calculate right now how much I'll need & whether I can afford to self-insure.

The problem is: you don't know. An accident or illness can occur any time. These things cannot be predicted.
1) Yep. But peace of mind can be very expensive.
2) You can't spend down your 2 million dollar assets and count on LTC in 20 years since you might not qualify. You need to keep those assets around. In this case the lady is spending 17k-22k/year LESS than what she could be spending. That is a huge percentage of her discretionary spending.
3) There is no direct family here that was mentioned. There is no mention of how spending down the portfolio will affect anyone other than the kids.

Obviously I can't tell you exactly what you need. But I don't need to do that. It is pretty easy to go LTC is going to be 80-100k (in todays dollars) and that you have a portfolio putting out 80k/year +12k/year of SS. Pretty easy to see that this is an expense you can handle.

And again what happens if I am wrong. What happens if she only ends up being able to pay for say 15 years of LTC (i.e. that is something like a 1% occurence for people that enter LTC. Heck only 10-15% make it to 5 years in most studies)? The answer is most cases is nothing. She will stay in the same facility, getting the same care just with a different payer.

There are some cases where LTC insurance makes a ton of sense. This doesn't strike me as one of them.

WillRetire
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by WillRetire » Sun Jun 24, 2018 9:44 am

randomguy wrote:
Sun Jun 24, 2018 8:51 am
WillRetire wrote:
Sun Jun 24, 2018 8:16 am

The case for buying/keeping a good LTCi policy even if you can afford to self-insure is 3-fold:
1. Piece of mind, as with most insurance
2. Freedom to spend & enjoy your investments while healthy
3. Reducing risk that a prolonged long-term care stay impacts family's finances

By all means, if you can tell me exactly how long I will need long-term care, AND how much it will cost, then I can calculate right now how much I'll need & whether I can afford to self-insure.

The problem is: you don't know. An accident or illness can occur any time. These things cannot be predicted.
1) Yep. But peace of mind can be very expensive.
2) You can't spend down your 2 million dollar assets and count on LTC in 20 years since you might not qualify. You need to keep those assets around. In this case the lady is spending 17k-22k/year LESS than what she could be spending. That is a huge percentage of her discretionary spending.
3) There is no direct family here that was mentioned. There is no mention of how spending down the portfolio will affect anyone other than the kids.

Obviously I can't tell you exactly what you need. But I don't need to do that. It is pretty easy to go LTC is going to be 80-100k (in todays dollars) and that you have a portfolio putting out 80k/year +12k/year of SS. Pretty easy to see that this is an expense you can handle.

And again what happens if I am wrong. What happens if she only ends up being able to pay for say 15 years of LTC (i.e. that is something like a 1% occurence for people that enter LTC. Heck only 10-15% make it to 5 years in most studies)? The answer is most cases is nothing. She will stay in the same facility, getting the same care just with a different payer.

There are some cases where LTC insurance makes a ton of sense. This doesn't strike me as one of them.
RE #3, your statement neglects to mention the financial impact to family who might have to pay for family member's long term care. Adult children are impacted.

randomguy
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by randomguy » Sun Jun 24, 2018 10:25 am

WillRetire wrote:
Sun Jun 24, 2018 9:44 am

3) There is no direct family here that was mentioned. There is no mention of how spending down the portfolio will affect anyone other than the kids.
RE #3, your statement neglects to mention the financial impact to family who might have to pay for family member's long term care. Adult children are impacted.
[/quote]

Because there is no financial impact other than potentially a smaller inheritance. Why do you think Mom can't pay for her own LTC for any reasonable time frame (say 20-30 years) with a 2 million dollar portfolio and SS? And when she can't pay, why do you think medicaid will not cover her expenses?

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by nisiprius » Sun Jun 24, 2018 11:04 am

ktip wrote:
Fri Jun 22, 2018 2:41 pm
My mom's LTCi premiums for the past 6 years have been a little over $17,000/year. Premium just increased to a little over $22,000/year.

She has paid 6 years of LTCi premiums, on a 10 year payment plan. So 4 more years of premiums to pay, then no more premiums.
Really, that is per year?

We bought two LTCi policies with John Hancock back in the year 2003, on a ten-year payment plan. The plan provided for $130/day, 90-day exclusion period, a maximum term of 6 years with a shared-care provision (a total of twelve years for both of us), and a 5% annual compounded benefit increase (i.e. it is now $270/day. The annual premiums were between $2,000 and $3,000/year for each of us, between $5,000 and $6,000 a year for both of us, and we paid them for ten years so the policy is now paid up and no more premiums are do; thus, the grand total cost over ten years for both of us was less than $60,000. However, at the time we bought them we were under sixty years old, and while the medical history forms were not by any means blank, we qualified for the "standard" rate. And that was for a six-year coverage period; my recollection was that a "lifetime" coverage period just about doubled the premium.

It's hard to judge. The one thing I'd say is that the insurance companies want policyholders to let their policies lapse. They count on it. The crisis in long-term-care insurance is that policyholders haven't been letting them lapse. My feeling is that once you've bought one, if you don't cancel right away you should hang on if possible--not pay the insurer 6 x $17,000 for nothing. I agree that 4 x $17,000 is a lot of money, and I know about the "sunk cost fallacy," but it sounds as if she can afford it, and with only four years to go the risk of further premium increases is limited, at least in time.
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ktip
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by ktip » Sun Jun 24, 2018 3:57 pm

I am in the same situation as your mom regarding age, portfolio, and ltci. I bought a lifetime benefit policy with 5% inflation rider almost 20 years ago. It cost less than a tenth of your mom's policy. However, 3 years ago the company no longer would insure for a lifetime benefit, so now I have a 5 year policy w/ inflation that is even cheaper.
Your benefit being changed is disturbing, jeez.
My thinking when I bought the policy was that if I paid premiums till age 90 they would total only one year of long-term care.

Compare the new 22k premium paid till age xx (mom's life expectancy) with how many years of care that would buy without insurance.

I probably would cancel my policy if the premium rose (roughly) to more than $12k/yr with more than 12 years of life expectancy, and count on self-insurance in the event of long-term illness. But I can't be sure what I'd really do until faced with the real numbers.
Well at least in her case it's a 10 year payment plan, so she only has 4 years left of payments, or 89k total, which would be about 1 year of care. And she's put in about 103-4K so far, so it's about 2 years of care total.

ktip
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by ktip » Sun Jun 24, 2018 4:06 pm

So why is she buying this insurance other than to make sure there is an inheritance? There might be some sleep well at night factor or it could have been a misunderstanding (i.e. maybe she thought she would pay the 200k and when she died there she would get back any of the 200k that wasn't used.
These three things were all definitely reasons she bought it -- inheritance, sleep well at night, and misunderstanding (thinking the premiums would be returned if not used.)

She also bought it because she had been taking care of her mother, and her mother needed LTC for many years, and my mom didn't and doesn't want her kids (me) to have to worry about it. As opposed to most people, my grandmother seemed to be fairly happy in a nursing home, and lived in one for 7 years or so. My grandmother's situation was pretty nice, though.

ktip
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by ktip » Sun Jun 24, 2018 4:14 pm

Really, that is per year?
That's what I said. :shock:

We bought two LTCi policies with John Hancock back in the year 2003, on a ten-year payment plan. The plan provided for $130/day, 90-day exclusion period, a maximum term of 6 years with a shared-care provision (a total of twelve years for both of us), and a 5% annual compounded benefit increase (i.e. it is now $270/day. The annual premiums were between $2,000 and $3,000/year for each of us, between $5,000 and $6,000 a year for both of us, and we paid them for ten years so the policy is now paid up and no more premiums are do; thus, the grand total cost over ten years for both of us was less than $60,000. However, at the time we bought them we were under sixty years old, and while the medical history forms were not by any means blank, we qualified for the "standard" rate. And that was for a six-year coverage period; my recollection was that a "lifetime" coverage period just about doubled the premium.
Sounds like you got a good deal. It seems like if you are married, these shared-care plans make good sense.
It's hard to judge. The one thing I'd say is that the insurance companies want policyholders to let their policies lapse. They count on it. The crisis in long-term-care insurance is that policyholders haven't been letting them lapse. My feeling is that once you've bought one, if you don't cancel right away you should hang on if possible--not pay the insurer 6 x $17,000 for nothing. I agree that 4 x $17,000 is a lot of money, and I know about the "sunk cost fallacy," but it sounds as if she can afford it, and with only four years to go the risk of further premium increases is limited, at least in time
I am finding it is hard to judge!

It does seem like the premiums will be returned, according to one page of the policy I've seen, but I do need to confirm.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by ktip » Sun Jun 24, 2018 4:22 pm

Thanks everyone for all the perspectives and input.

It sounds like the respective advantages are something like:

Keep this expensive LTCi
Ideally it should/ is supposed to insure that she will have good LTC for as long as she needs it, particularly in the unlikely but nonetheless possible case of needing many years of LTC
She can afford the 4 more years of premiums – not a terrible hardship
Further premium increases not super likely since only 4 years left of payments
Protection of assets for heirs (i.e., me and my brother) if there is extended LTC need, assuming she doesn't spend down portfolio
*She would have more money to spend now, while she is healthy, as doesn’t have to save for LTC

Self-insure
Her portfolio and SS will likely support most LTC needs – possibly all LTC needs, but possibly not, and then can use Medicaid
Don’t have to worry about and potentially face premium increases
Don’t have to depend on insurance company for LTC– it is possible insurance company rejects claims, changes policy, or goes out of business
Most likely, she spends less money on LTC and LTCi if self-insure (and heirs have more)
*She would have more money to spend now, while she is healthy, as she doesn’t have to spend ¼ of her budget on LTC premiums

*These are obviously in tension.
**I'm putting the inheritance dimension in the above analysis because 1) it's clearly relevant in LTCi decisions, and 2) it's important to my mom -- she has repeatedly said she wants this.

It doesn't seem like there is an objectively right answer. It’s hard to estimate the risk of certain factors – like how easy or difficult it will be to get benefits from this company in 20 years, or further premium increases. The company is Northwestern Mutual, so I'm hoping that an established company like that reduces the risk of not getting promised benefits.

I’ll talk with her about all these pro's and con's, but I know she will still want my opinion, so I’m leaning towards recommending that she:

1) Continue with the policy
2) Be generous in withdrawing from her portfolio now, so she can pay premiums and live well at the same time

And if she spends down her portfolio, which seems unlikely, she'll just move in with us. And then if she needs LTC at some point, she has this policy which should pay for home help or, if needed, a facility. That seems like a better worse case scenario then possibly trimming LTC by relying on Medicaid.

pintail07
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by pintail07 » Sun Jun 24, 2018 4:43 pm

A new policy for her, same benefits:
10 pay premium 25,000
If you want to reduce payments, reduce daily benefit, benefit period and or reduce inflation benefit. Before making a decision have agent run different options.

AlwaysWannaLearn
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by AlwaysWannaLearn » Sun Jun 24, 2018 5:55 pm

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Last edited by AlwaysWannaLearn on Wed Jul 18, 2018 11:10 pm, edited 2 times in total.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by WoW2012 » Mon Jun 25, 2018 12:37 pm

ktip wrote:
Fri Jun 22, 2018 2:41 pm
My mom's LTCi premiums for the past 6 years have been a little over $17,000/year. Premium just increased to a little over $22,000/year.

She has paid 6 years of LTCi premiums, on a 10 year payment plan. So 4 more years of premiums to pay, then no more premiums.

She has a current monthly benefit of $7,665 that increases at 4% year. Her benefit period is lifetime.

I have been reading past threads and doing other research, and I understand that the lifetime benefit is now uncommon and quite valuable -- it addresses the tail risk of many years of LTC. But, this is still ridiculously expensive, right?

I believe if she cancels the policy now she gets all paid premiums returned (but no interest).

She has been wanting my advice, and I'm thinking this just seems crazy costly and would make sense to cancel. And if she wants LTCi she can visit an independent broker and get something cheaper. Or "self-insure." The one thing that gives me pause is the potential value of her lifetime benefit period.

Thoughts?

Other info:
She is 65. No known history of Alzheimers, but her dad also passed when in late 50s, so who knows if he had lived longer. Her mom died at age 90.
She bought the policy thinking it was a hybrid one with a substantial death benefit. But this is unfortunately not the case.
She has a portfolio of 2 million, with about 1/4 of that in an IRA, the rest is taxable.
No mortgage or other debt.
Expenses of around 80k, including LTCi premium, and including discretionary travel and home projects. She'd spend more on travel and projects if not paying premium.
Social security is a little less than 1k. Might increase.

[edited for additional information]

It sounds like your mother purchased a policy from a company that has sold some of the most expensive long-term care policies on the market. I'm not saying this policy is a bad value. I'm just saying that she bought it from a company that has always had premiums that were much higher than other insurance companies.

It also sounds like she has a "refund of premium on death" rider. That's probably why she thought it was a "hybrid". The "refund of premium on death" rider will, upon death, refund all premiums paid to the heir(s) minus any claims paid.

So, if she never needs care, you'll get all the premiums back.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by WoW2012 » Mon Jun 25, 2018 12:41 pm

Christine_NM wrote:
Sat Jun 23, 2018 2:11 pm
I am in the same situation as your mom regarding age, portfolio, and ltci. I bought a lifetime benefit policy with 5% inflation rider almost 20 years ago. It cost less than a tenth of your mom's policy. However, 3 years ago the company no longer would insure for a lifetime benefit, so now I have a 5 year policy w/ inflation that is even cheaper.

My thinking when I bought the policy was that if I paid premiums till age 90 they would total only one year of long-term care.

Compare the new 22k premium paid till age xx (mom's life expectancy) with how many years of care that would buy without insurance.

I probably would cancel my policy if the premium rose (roughly) to more than $12k/yr with more than 12 years of life expectancy, and count on self-insurance in the event of long-term illness. But I can't be sure what I'd really do until faced with the real numbers.

An insurance company canNOT unilaterally decide to change the contract and reduce your benefit period from lifetime/unlimited to something less.

The only time something like that could happen is if the company you bought your policy from has been taken over by the regulators and is being liquidated.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by WoW2012 » Mon Jun 25, 2018 12:47 pm

delamer wrote:
Sat Jun 23, 2018 5:35 pm
FIREchief wrote:
Sat Jun 23, 2018 4:06 pm
Christine_NM wrote:
Sat Jun 23, 2018 3:06 pm
FIREchief wrote:
Sat Jun 23, 2018 2:27 pm
Christine_NM wrote:
Sat Jun 23, 2018 2:11 pm
I am in the same situation as your mom regarding age, portfolio, and ltci. I bought a lifetime benefit policy with 5% inflation rider almost 20 years ago. It cost less than a tenth of your mom's policy. However, 3 years ago the company no longer would insure for a lifetime benefit, so now I have a 5 year policy w/ inflation that is even cheaper.
Are you saying that 3 years ago your insurance company just unilaterally cancelled the lifetime benefit?? :confused
Pretty much. The company notified me that lifetime-benefit policies would not be honored and were no longer sold. I was offered a variety of other options. I chose the 5 yr w/ inflation. Good reminder that everything comes with risk
Wow. This could certainly alter the advice many of have been offering to the original poster in this thread. If insurance companies can charge huge premiums for years and then just decide they aren't going to continue the policy, then why even bother?
This surprised me too. I’d have thought there woukd be more in the way of consumer protections.
An insurance company cannot unilaterally decide to decrease someone's benefit period from lifetime/unlimited to something less. The only reason this would happen in her case is if she bought her policy from a company that is now in liquidation and it's been taken over by the insurance regulators.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by WoW2012 » Mon Jun 25, 2018 12:51 pm

FIREchief wrote:
Sat Jun 23, 2018 4:06 pm

Wow. This could certainly alter the advice many of have been offering to the original poster in this thread. If insurance companies can charge huge premiums for years and then just decide they aren't going to continue the policy, then why even bother?

An insurance company CANNOT do what she's described.

The only reason this would happen is if the insurance company is liquidated.
When it's liquidated the guaranty associations take over claims payments.

Each state's guaranty association has a cap on how much it will pay if a long-term care insurer becomes insolvent. That cap is usually $300,000 (except for NJ which has no cap).

Since the guaranty association will only pay $XXX,XXX, it doesn't make sense to keep paying the premium for a lifetime/unlimited benefit period.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by Christine_NM » Tue Jun 26, 2018 11:32 am

WoW - The company is Mutual of Omaha, and is not bankrupt. The mandated change from lifetime to 5 year ltci was no great hardship to me because the policy was so much cheaper (bought when younger) than the OP's mom's policy. My current 5 year policy is cheaper still. I could always have cancelled the policy. MOO was not trying to require me to choose a new policy, just telling me what was available.

I was rather surprised at the outpouring of indignation at a change in my policy. Seems to be a common reaction that I don't share. I was OK with the change since it is not even clear whether I'll need LTC.

I just wanted to warn the OP's mom not to pay too much extra for the lifetime benefit since it may be revoked.

Edit: note that the change in the terms of my policy from lifetime to fixed term was initiated by MOO, not by me.
Last edited by Christine_NM on Tue Jun 26, 2018 12:44 pm, edited 1 time in total.
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by WoW2012 » Tue Jun 26, 2018 12:15 pm

Christine_NM wrote:
Tue Jun 26, 2018 11:32 am
WoW - The company is Mutual of Omaha, and is not bankrupt. The mandated change from lifetime to 5 year ltci was no great hardship to me because the policy was so much cheaper (bought when younger) than the OP's mom's policy. My current 5 year policy is cheaper still. I could always have cancelled the policy. MOO was not trying to require me to choose a new policy, just telling me what was available.

I was rather surprised at the outpouring of indignation at a change in my policy. Seems to be a common reaction that I don't share. I was OK with the change since it is not even clear whether I'll need LTC.

I just wanted to warn the OP's mom not to pay too much extra for the lifetime benefit since it may be revoked.

The lifetime benefit period CANNOT be revoked by the insurance company. YOU CHOSE to reduce the benefit period.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by marcopolo » Tue Jun 26, 2018 12:52 pm

Christine_NM wrote:
Tue Jun 26, 2018 11:32 am
WoW - The company is Mutual of Omaha, and is not bankrupt. The mandated change from lifetime to 5 year ltci was no great hardship to me because the policy was so much cheaper (bought when younger) than the OP's mom's policy. My current 5 year policy is cheaper still. I could always have cancelled the policy. MOO was not trying to require me to choose a new policy, just telling me what was available.

I was rather surprised at the outpouring of indignation at a change in my policy. Seems to be a common reaction that I don't share. I was OK with the change since it is not even clear whether I'll need LTC.

I just wanted to warn the OP's mom not to pay too much extra for the lifetime benefit since it may be revoked.

Edit: note that the change in the terms of my policy from lifetime to fixed term was initiated by MOO, not by me.
I am still a little confused by your response.

Did MOO force you to switch, meaning you no longer had the option to continue with the lifetime benefit option? Or did they present you with alternative options, and you voluntarily chose to switch to a shorter benefit period to get lower premiums?
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by WoW2012 » Tue Jun 26, 2018 1:06 pm

Christine_NM wrote:
Tue Jun 26, 2018 11:32 am
WoW - The company is Mutual of Omaha, and is not bankrupt. The mandated change from lifetime to 5 year ltci was no great hardship to me because the policy was so much cheaper (bought when younger) than the OP's mom's policy. My current 5 year policy is cheaper still. I could always have cancelled the policy. MOO was not trying to require me to choose a new policy, just telling me what was available.

I was rather surprised at the outpouring of indignation at a change in my policy. Seems to be a common reaction that I don't share. I was OK with the change since it is not even clear whether I'll need LTC.

I just wanted to warn the OP's mom not to pay too much extra for the lifetime benefit since it may be revoked.

Edit: note that the change in the terms of my policy from lifetime to fixed term was initiated by MOO, not by me.

You're contradicting yourself.

You said that the insurer "was NOT trying to require me to choose a new policy."
You said that the insurer was "just telling you what was available."

But then you say the change was "mandated".

Your last edit stating that "the change in the terms of my policy from lifetime to fixed term was initiated by MOO, not by me."

Initiating is NOT the same as mandating.

Giving you the option to lower your benefit period from lifetime to 5 years is NOT mandating.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by pintail07 » Tue Jun 26, 2018 1:50 pm

More than likely what happened was they had a large rate increase and offered you options of how to minimize these increases and reducing the benefit period was one. The company CANNOT change the terms of the contract unless you agree to it.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by LadyGeek » Tue Jun 26, 2018 6:55 pm

The discussion is getting a bit contentious.

ktip - Did your questions get answered? Note pintail07's suggestion regarding a new policy.
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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by ktip » Wed Jun 27, 2018 8:53 am

Yes, my question did get answered. This was quite helpful.

RE: Pintail's comment -- that benchmark of comparable policy is useful. And l know she can reduce benefits rather than have an increased premium, but those options don't make as much sense to me, since those aren't that much cheaper overall, and her monthly benefit isn't that high right now.

I clearly need to read the policy very closely, as AlwaysWannaLearn and other suggested, and perhaps have a lawyer review it as well. The insurance company won't give it me or even send my mom an e-copy for "privacy reasons" -- the latter makes no sense IMHO, but not worth fighting over, as I'm visiting her soon and will review the policy in person then.

Thanks to all who contributed!

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by ktip » Wed Jun 27, 2018 9:11 am

Actually, small update -- on reflection, this whole "no e-copy of the policy for privacy reasons" seems off, so I am going to follow up on that.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by WoW2012 » Wed Jun 27, 2018 9:46 am

ktip wrote:
Wed Jun 27, 2018 9:11 am
Actually, small update -- on reflection, this whole "no e-copy of the policy for privacy reasons" seems off, so I am going to follow up on that.
They can't email a copy of the policy because they have no way of verifying who owns your email address.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by pintail07 » Wed Jun 27, 2018 11:02 am

All you have to do is complete a lost policy form and they will mail to her.

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Re: This is ridiculously expensive LTCi, right? Or maybe not?

Post by Chris K Jones » Wed Jun 27, 2018 11:28 am

Is Mom in a high nursing home cost area or one of the less expensive areas? My mom is currently in a nursing home in one of the least expensive areas in the country. The annual payment is about 70k. If she were in a high nursing home cost area, it could be 2 or more times as much. Your mom could self insure more easily if in lower cost area. Where is she?

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