Long term care policy question

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Larry2623
Posts: 63
Joined: Sat Jul 15, 2017 9:23 pm

Long term care policy question

Post by Larry2623 » Tue Feb 26, 2019 1:40 pm

I retired last year and have continued to pay on LTC policy I originally acquired through job.
I know very little about LTC policies and was wondering if you people think this is worth keeping?

Policy is with CNA.
Cost $320 a year

Lifetime max $200K
LTC benifit 100% of eligible expense per day of nursing home care not to exceed $100 per day
100% of eligible expense per day of community based care not to exceed $50 per day
Waiting period 90 days
Temporary bed holding 21 days
Hospice Care 100% of eligible expense incurred not to exceed $100 a day

Thanks for any help...

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beyou
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Location: Northeastern US

Re: Long term care policy question

Post by beyou » Tue Feb 26, 2019 1:51 pm

I assume that is for one person, not a couple.
Even then, seems cheap.

depressed
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Re: Long term care policy question

Post by depressed » Tue Feb 26, 2019 2:00 pm

That's a good question. I would keep it, but my answer is partly based on the fact that I tried to get LTC insurance at age 55 and was turned down because of a pre-existing condition. I found this online:

1. Almost 70% of people turning 65 today will need some type of long-term care. https://www.google.com/search?client=op ... 8&oe=UTF-8

2. The average stay in a nursing home is 835 days. https://www.google.com/url?sa=t&rct=j&q ... iGf5KXGmqQ

I don't know if those statistics are reliable, but if so, then you could estimate the expected value of the policy as 0.7 times 835 days * $100/day = $58,450. (The exact amount cannot be calculated without knowing more about the probability distribution of different length stays, particularly if a large number of very long stays has upped the average.)

I would pay $320/year for this policy, but the value to me is more than $58,450 because my chances of needing care might be higher than 70% and my length of stay might be longer than the average number of days since my pre-existing condition is not terminal.

adamthesmythe
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Re: Long term care policy question

Post by adamthesmythe » Tue Feb 26, 2019 2:25 pm

It covers only a fraction of what your costs would be. But it's not expensive relative to the benefit. Keep it until they raise the rates, then rethink.

Topic Author
Larry2623
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Joined: Sat Jul 15, 2017 9:23 pm

Re: Long term care policy question

Post by Larry2623 » Tue Feb 26, 2019 3:01 pm

Just one person. Thanks for your inputs

cashmoney
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Re: Long term care policy question

Post by cashmoney » Tue Feb 26, 2019 3:39 pm

Larry2623 wrote:
Tue Feb 26, 2019 1:40 pm
I retired last year and have continued to pay on LTC policy I originally acquired through job.
I know very little about LTC policies and was wondering if you people think this is worth keeping?

Policy is with CNA.
Cost $320 a year

Lifetime max $200K
LTC benifit 100% of eligible expense per day of nursing home care not to exceed $100 per day
100% of eligible expense per day of community based care not to exceed $50 per day
Waiting period 90 days
Temporary bed holding 21 days
Hospice Care 100% of eligible expense incurred not to exceed $100 a day

Thanks for any help...


You didn't say your age but since you are retired I will assume you are at least in your 50's .If so IMHO you would be crazy to drop this even if there isn't any inflation protection but I would buy additional coverage .

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LadyGeek
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Re: Long term care policy question

Post by LadyGeek » Tue Feb 26, 2019 4:09 pm

This thread is now in the Personal Finance (Not Investing) forum (insurance).
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Topic Author
Larry2623
Posts: 63
Joined: Sat Jul 15, 2017 9:23 pm

Re: Long term care policy question

Post by Larry2623 » Tue Feb 26, 2019 4:39 pm

LadyGeek wrote:
Tue Feb 26, 2019 4:09 pm
This thread is now in the Personal Finance (Not Investing) forum (insurance).
No problem...thanks. But I would say it is closer to investing than a fridge in your garage or what book you are reading or another 1000 post subjects!
I am really just saying this in jest but it is kind of true...

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Artful Dodger
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Re: Long term care policy question

Post by Artful Dodger » Tue Feb 26, 2019 4:58 pm

Larry2623 wrote:
Tue Feb 26, 2019 1:40 pm
I retired last year and have continued to pay on LTC policy I originally acquired through job.
I know very little about LTC policies and was wondering if you people think this is worth keeping?

Policy is with CNA.
Cost $320 a year

Lifetime max $200K
LTC benifit 100% of eligible expense per day of nursing home care not to exceed $100 per day
100% of eligible expense per day of community based care not to exceed $50 per day
Waiting period 90 days
Temporary bed holding 21 days
Hospice Care 100% of eligible expense incurred not to exceed $100 a day

Thanks for any help...
Looks like it would pay $100 toward a Nursing Home bed after the first 90 days
I'm not sure if the community based care would include assisted living or just home based care (ie an aide coming to your home), then $50 per day, again after 90 days
If you were transferred out, say to a hospital, the policy would likely pay the same $100 to the nursing home to hold your bed in your absence.
It will pay $100 per day towards hospice care (not sure if this requires you to meet the normal requirements, ie, must meet 2 of 6 or 7 ADLs)
Without knowing more, I would assume the lifetime max is the pool of money available. If you went in a nursing home, after the first 90 days, they will pay $100 per day until the benefits are exhausted, or 2000 days.

I would call CNA, and ask them your questions to get the real answers. Also ask if there was any inflation rider which could have increased your daily benefit and your lifetime max. As someone else noted, the benefits are low. Currently a nursing private bed will be $200 or more per day, in some areas much higher, $300 - $400 per day. But, I'd definitely keep it as it would pay a base benefit toward your care, and you can supplement that from social security, savings, etc.

WoW2012
Posts: 625
Joined: Sun Dec 23, 2012 11:28 am

Re: Long term care policy question

Post by WoW2012 » Tue Feb 26, 2019 9:06 pm

Larry2623 wrote:
Tue Feb 26, 2019 1:40 pm
I retired last year and have continued to pay on LTC policy I originally acquired through job.
I know very little about LTC policies and was wondering if you people think this is worth keeping?

Policy is with CNA.
Cost $320 a year

Lifetime max $200K
LTC benifit 100% of eligible expense per day of nursing home care not to exceed $100 per day
100% of eligible expense per day of community based care not to exceed $50 per day
Waiting period 90 days
Temporary bed holding 21 days
Hospice Care 100% of eligible expense incurred not to exceed $100 a day

Thanks for any help...

It's cheap because it won't pay much and it doesn't seem to have any inflation protection. $1,500 per month for care at home won't do much in today's dollars let alone if you need care 15 years from now.

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Watty
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Re: Long term care policy question

Post by Watty » Tue Feb 26, 2019 9:54 pm

Being a low amount may not be as bad as it sounds especially if you are single when it is needed.

The reason is that if you are single then then many of your other costs will stop if you go into long term care so you are mainly concerned about how to fill that gap.

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