LTHC Insurance ??

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sixtyforty
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Joined: Tue Nov 25, 2014 12:22 pm

LTHC Insurance ??

Post by sixtyforty » Mon Oct 08, 2018 8:35 am

I'm just now starting to look at LTHC insurance but have no clue on which companies or overages to look at. Are there any specific companies I should look at and specific coverages ? Is there a particular age they recommend to start it at ? I would also like to hear from people that chose not to get the insurance and why.
"Simplicity is the ultimate sophistication" - Leonardo Da Vinci

Iorek
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Re: LTHC Insurance ??

Post by Iorek » Mon Oct 08, 2018 8:54 am

There are lots and lots of threads on this. Try searching "LTC" or "LTCI" (or spelling it out).

In the meantime here is one thread from 2018--

viewtopic.php?t=242143

clydewolf
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Re: LTHC Insurance ??

Post by clydewolf » Mon Oct 08, 2018 9:08 am


shell921
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Re: LTHC Insurance ??

Post by shell921 » Mon Oct 08, 2018 11:20 am

My late husband and I looked into LTC about 6 years ago and dedided against it. Below are some comments I saved from discussion forums
that helped us make up our minds.:
............


LTC insurance is one of those things that sounds too good to be true — and you know the saying about such things.

How do you know the insurance will be collectible, especially as we’ve seen major financial institutions fold because of mis-management of risks and bad assumptions about their products?

How can an insurance company price the product at an affordable rate and still provide a substantial benefit when the insured needs to collect? Again and again the insurance industry has underpriced products relative to risk and then tried to make up for it by withholding payments. And an individual insurance company that accurately prices its product high enough, will likely not be able to find enough buyers to support it.

It’s a terrible risk for many people — they may scrimp to make the payments for decades, only to find they can’t collect, since with insurance of any type you can never be sure how good your policy is until that time to collect. And unlike homeowners or car insurance, where you are frequently renewing the risk, LTC insurance is one where you have to place a bet far in advance and stay with it.


.................
In the past couple of years my interactions with my long term care policy has worried me. Twenty years ago I bought a policy, when I was in my 30′s. I am paying a relatively low premium now, having started so young. The company no doubt prefers customers paying higher premiums. After paying twenty years, on time, I received a letter notifying me they had received my cancellation request. When I called in alarm to correct this, it seemed to me their response was “ho, hum, uh, OK”. They didn’t seem concerned or interested in the source of this error. They never acknowledged their error in writing, as I requested several times. Another time, I returned a signed form listing one choice for an optional plan upgrade, but they disregarded the letter because I hadn’t checked a little box next to the one choice listed on the page. I have had to send and call about a dozen times to fix a typo in my personal information.

How will I have the energy and persistence to advocate for myself when I am so incapacitated that I need the coverage I paid for? (And I just edited out the name of the company for fear of retribution.) Across the board, especially after Katrina, it seems the insurance industry is shirking its obligations.

.....................

When it comes to long-term care insurance, readers should be aware of alternatives other than a stand alone long termcare policy. Specifically, you can buy a “hybrid” policy built on a life insurance chassis.Rather than paying annual premiums, the premium is a one-time lump sum deposit,with the total long term care benefit equal up to 5 times the deposit amount.The lump sum deposit is refundable at any time.The cost of the coverage is the interest lost on the lump sum deposit. There could be several advantages to this approach,including easier underwriting, premiums can not be increased, and whatever benefits are not used, are paid as life insurance to a named beneficiary.
...........
I read that LTC insurance is really Stroke and Dementia insurance. I would guess that 90% of all claims are for these two maladies.
New LTC policies are too costly for what you get. That's probably why the idea was dropped from the Affordable Care Act.
............

here is a comment someone posted about those salesmen that sell
LTC insurance:

I have a friend who’s job it is to take the “long term insurance sales people” who sold the most policies to Europe for 10 days. They stay at the best hotels go on the best tours and eat fine food. He plans the trip and he is the group tour guide. The price tag about $100,000.00. Then there is the high cost of those executives. You can save your money and take a nice trip which would be good for your health.
.........
I am 58, but would never buy LTC insurance. I do not believe that the insurance companies will have the assets to pay for my care should I need it in 30 years when all the LTC liabilities are coming due.

This kind of business asks us to pay a large amount of money for 30 years in the hope that the insurance business is not just a big ponzi scheme.

When you need the care, be ready for the private market people to reply “Who could have foreseen that so many people would be needing care?”

LTC insurance companies will just enter bankruptcy in 30 years, leaving the customers with nothing. The big executives and insurance brokers would have lived high on the hog collecting premiums and commisions during the good years.

People will be pushed coaxed coddled and bribed to give up or abandon their policies before they are needed.

...............................

This is a roll of the dice. It is hard to know if one will win or lose because of the time involved, uncertainties over insurance companies, difficulty of attaining benefits, and the amounts that will be needed in the future.

Whether one is betting on long term care, good health, or a quick end, death and life will always be uncertain.

...........
Long Term Care insurance is very difficult to collect on – my in-laws both have policies and now they are both demented they are eligible but the ins and outs of processing a claim have been a nightmare. Their company is John Hancock and the company seems to make every effort to avoid paying out on the policy. You can’t speak to the same person every time you call – so you have to call them, mail them forms, fax forms, and continually provide documents you have already provided to get payed. I am disgusted with the company.
........................

WELL, I discussed this type of “insurance” with my internist. Since I am 66, a representative from a GE owned insurance company contacted me and offered me a long term policy — which would cover me for the worst: even, Altheimer’s…

I signed up and gave the agent the first premium. I was told that could cancel the policy (if I changed my mind) within 30 days and get my complete money returned.

My physician commented: “Don’t you realize it’s a Ponzi scheme. I never heard of that… So, I read a book on the subject — Ponzi. I cancelled the policy and the money I paid was returned in full.

Note: this was a year before Madoff!

annielouise
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Re: LTHC Insurance ??

Post by annielouise » Mon Oct 08, 2018 12:07 pm

I look at this differently than many.

The biggest risk for needing LTC is when you are younger. When your spouse has to work and can't care for you. When you are missing out on earnings. We have had policies for quite a while. I can see potentially stopping them as we age (or not, depending on cost). I would not see this as a fail, but rather as a decision that we can now self insure.

We will turn 54 in December.

shell921
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Re: LTHC Insurance ??

Post by shell921 » Mon Oct 08, 2018 12:46 pm

I think Long Term Care insurance coverage will start if you can’t perform any two of certain activities of daily living.

But someone could have dementia and still be able to do all these 6 things. [ eating is different

from cooking or preparing foods to eat ] also someone might be demented and able to eat--feed herself--and able to

shower and dress herself but not able to shop for food or cook. transferring is what? getting out of bed by yourself?

what if you can't do that but you can do everything else?

two of the six activities of daily life – e.g., bathing & dressing – must be triggered, not just one...before

you can benefit from long-term care insurance. also what do they pay per day? $150? I think

nursing home rates in Calif are now at least $350 a day-right?

here are the 6 daily living activities:

Eating
Bathing
Dressing
Toileting
Transferring
Maintaining continence


Here is an article:

https://www.elderlawanswers.com/how-lik ... are--15501
........
In 2012, there were about 1.2 million nursing home residents over 65 years old in the United States. Of these, 18 percent were 65 to 74 years old, 32 percent were between 75 and 84, 41 percent were between 85 and 94, and 9 percent were 95 or older. Of course, there are fewer of us in each age cohort, so the likelihood of needing nursing home care rises even more steeply with age than these percentages indicate. While these numbers do not reflect other types of long-term care, the need for home care,assisted living, or care provided by family members probably rises at similar rates.

According to the American Association for Long-Term Care Insurance, in 2012 64 percent of long-term care claims were made by those over age 80 and only 9 percent were from those in their 60s. Meanwhile, according to the association's figures for 2008, 44 percent nursing home residents stay less than a year, 30 percent stay between one and three years, and only 24 percent spend more than three years in a facility. Updated numbers would likely indicate even shorter stays as more seniors receive care at home or in assisted living facilities. Those who move to nursing homes do so when they are older and sicker, meaning that they stay for a shorter period of time than in the past. According to one reported statistic, only 40 percent of seniors spend any time in a nursing home.

Interpreting the Numbers

So, what do all of these statistics mean in terms of your planning? First, the odds are that you will not need care until you are at least 80 or 85. Second, if you do need nursing home care, there's a 44 percent chance it will last less than a year (either because you will return home after a period of rehabilitation or you will not survive more than a year) and only a one-in-four chance that your stay will last three or more years. Of course, if it does, your costs will become prohibitive. However, since only 40 percent of seniors spend any time in a nursing home and only a quarter of those stay longer than three years, this means that statistically you have only a one in 10 chance of needing more than three years of nursing home care.

Unfortunately, these statistics are somewhat dated and are just statistics. How do any of us know whether we are part of the 60 percent of seniors who will never enter a nursing home, the 30 percent who will spend less than three years there, or the 10 percent who will spend more than three years? We don't, but we can modify the statistics based on our own circumstances, especially with respect to certain factors.


read more :

https://www.elderlawanswers.com/how-lik ... are--15501
........

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Phineas J. Whoopee
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Re: LTHC Insurance ??

Post by Phineas J. Whoopee » Mon Oct 08, 2018 3:13 pm

I don't know, OP, what you should do today, or your financial tradeoffs.

About a decade ago I had an opportunity to buy into group LTC insurance. We had plenty of notice. I chose to pay for it. I maintain it to this day, and plan to continue.

Contrary to many rationales posted here at www.bogleheads.org, and I don't argue anybody is misrepresenting their own reasoning, my primary purpose for carrying it is to avoid a nursing home. My policy covers many measures short of that which my state's Medicaid program does not.

It is not, for me, about preserving assets, but rather about preserving as much independence as I can practically enjoy.

PJW

ChrisC
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Re: LTHC Insurance ??

Post by ChrisC » Mon Oct 08, 2018 5:42 pm

shell921 wrote:
Mon Oct 08, 2018 12:46 pm
I think Long Term Care insurance coverage will start if you can’t perform any two of certain activities of daily living.

But someone could have dementia and still be able to do all these 6 things.

[eating is different from cooking or preparing foods to eat ] also someone might be demented and able to eat--feed herself--and able to

shower and dress herself but not able to shop for food or cook. transferring is what? getting out of bed by yourself?

what if you can't do that but you can do everything else?

two of the six activities of daily life – e.g., bathing & dressing – must be triggered, not just one...before

you can benefit from long-term care insurance. also what do they pay per day? $150? I think

nursing home rates in Calif are now at least $350 a day-right?

here are the 6 daily living activities:

Eating
Bathing
Dressing
Toileting
Transferring
Maintaining continence
Many LTCi policies, including my policy, also provide that if you're afflicted with severe cognitive impairiment that requires substantial supervsion from another person that you're covered for LTCi benefits. Someone suffering from dementia who has to be monitored and helped continuously to navigate life or is in danger to himself would seem to be eligible for LTCi benefits under my policy.

My brother-in-law presents a more difficult case of cognitive impairment -- he has MS and currently does not appear to meet the physical standards of needing help with the 6 activities of daily living (ADLs), but he is clearly cognitively impaired though not at the level that requires continuous monitoring or supervision; at present, he is in an assisted living facility but we anticipate that as his condition declines both his cognitive impairment and physical mobility will require skilled nursing care. He does not have LTCi (which we wished he had purchased) and will not likely be able to afford long term care, so he'll have to rely on family contributions from us (and eventually Medicaid, if we can't backstop him).

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Watty
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Re: LTHC Insurance ??

Post by Watty » Mon Oct 08, 2018 7:53 pm

sixtyforty wrote:
Mon Oct 08, 2018 8:35 am
I would also like to hear from people that chose not to get the insurance and why.
I didn't get it. Some reasons why;

1) The costs vary a lot by where you live and I happen to live in Georgia which has somewhat affordable costs.

https://www.genworth.com/aging-and-you/ ... -care.html

The cost of LTC for one person here is not all that much more than our expected retirement budget so paying LTC costs will not be that much more than our normal expenses if only one of us is surviving then. When only one person is surviving many of their other expenses will stop when they go into LTC.

2) My Mom survived my Dad and she always said that her paid off home was her LTC insurance. She made sure that my siblings and I knew that if she ever needed LTC we were to sell her house and use those funds to put her in the best LTC facility possible. Her house was not super expensive but her numbers were sound and if she had needed LTC the funds from the house in addition to her normal retirement budget would have funded LTC for a very long time since she lived in an area with moderate LTC costs. Now I also consider my paid off house to be a safety net that can be tapped for long term care if needed by selling the house or getting a reverse mortage.

3) We are planning to be able to financially support ourselves if we live past 95. If LTC is needed when we are 80 then the odds are remote that we will live past the age of 95 so the retirement funds can be drawn down faster.

These are not perfect since if we are both surviving when LTC is needed then the other living expenses will not drop as much. If we are both surviving when LTC is needed for one of use it is likely that moving into LTC can be delayed because the other spouse and less expensive home assistance can be used for a while.

3) If you had a crystal ball when you were 50 and knew for certain that you would need extended LTC when you were 80 then paying the premiums for 30 years to get the LTC coverage might not make a lot of sense because the 30 years of premiums could just be invested instead. Even if you needed LTC when you were younger it could take a long time just to get your premiums back.

4) Some people want LTC insurance to help make sure that their estate is not depleted so their heirs get a large inheritance. Leaving a large inheritance is not a priority for us.

There are still a lot of scenarios where LTC costs could be a problem but the LTC insurance that is available today is a lot different than the policies were in the past and would not handle situations well like needed LTC for 10+ years.

Iorek
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Re: LTHC Insurance ??

Post by Iorek » Mon Oct 08, 2018 9:41 pm

I looked at this 5-10 years ago for a relative who has a small nest egg and small pension. She ended up buying a policy in her early 60s because she felt with smallish retirement savings she'd prefer to have some insurance. She has already had one or two big rates increases (she bought after the initial round(s) of rate increases when supposedly they were better at pricing these things). She got a "partnership policy" which basically means you get a credit for medicaid purposes for your insurance, so you qualify sooner (with less spend down). Doesn't cost more except that you need to meet certain minimum requirements for the policy.

At the time I was on the fence whether the policy made sense if you have more, so I basically put off the decision for a while, but the more time that goes by the more sceptical I tend to become.

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willthrill81
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Re: LTHC Insurance ??

Post by willthrill81 » Mon Oct 08, 2018 10:09 pm

If you need coverage, the statistics indicate that there is about a 75% probability that you'll need less than three years of care. Even that care is in a full-service LTC facility, the typical cost in our area is about $100k annually. So we're talking about a risk where the odds are fairly high, well above 80% and perhaps as much as 90%, that the out-of-pocket maximum would be around $300k. And on top of that, the odds are very high that those, along with funeral expenses, will be your 'final life expenses' (i.e. you aren't at all likely to come out of a LTC facility alive and well). If you are willing and able to carry that kind of risk (most retired Bogleheads probably can), then you should probably do without LTCi.

Further, even in the event that you need care in a facility longer than three years, there are other ways of protecting your assets, such as a Medicaid-compliant annuity or an irrevocable trust (must be set up at least five years prior to switching to Medicaid).
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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