Why I don't think I should get long term care insurance right now

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Why I don't think I should get long term care insurance right now

Post by markcoop » Sat Apr 27, 2019 12:50 pm

My wife and myself are both 53 years old. I have been talking to an insurance salesperson about long term care insurance. At this point, I am leaning against getting it for the following reasons:

1. The total cost difference is about $20K total to not buy it now, but instead buy at age 59. Since I view this cost difference not very large relative to the total cost, I think waiting to pay for something I don't need for a few years a good option.

2. Total cost right now is close to 2 million. Companies have been raising rates over the last decade above inflation. So it could end up being alot more. That is alot of money to commit (really not committing but getting it now to keep the prices down) to a product that seems to be in a state of chaos. On the flip side, if policies continue to become more restrictive as to what is being offered, the possibility exists that policies will get less favorable going forward.

3. The premiums for these policies increase as one ages. In our 80s, I was told they really start to become cost prohibitive. My insurance salesman claims that many stop the inflation rider once they hit 80. The idea of lowering coverage in my 80s, when I need it the most, seems crazy to me. To spend 2 million dollars and still not have full coverage seems crazy.

4. The policy quoted to me, which he said was typical, only covers 3 years worth claims (you can use it over a longer period). This also seems crazy. Again, if true catastrophe strikes, the reason why one buys insurance, the insurance is not there.

5. I have concerns about these companies being able to pay in 30 years. They may even just cancel policies at some point. Or even issues getting them to pay.

6. I do feel I can self-insure for a few years (say 3). I have seen some of the statistics that show the odds of needing it for greater than 3 years is not great.

7. I feel waiting to see what alternatives come out in the future seems prudent as I feel this may (is?) a major issue for many people. If policies become less favorable due to the consolidating industry, I have to believe something will happen. Who knows, perhaps our government may have solutions.

I'd appreciate any comments.
Mark

stats99
Posts: 131
Joined: Wed Sep 28, 2016 2:15 pm

Re: Why I don't think I should get long term care insurance right now

Post by stats99 » Sat Apr 27, 2019 1:02 pm

Can you share your premium calculations that get you to $2 million. In general, insurance makes sense when the premiums paid are significantly less than the, hopefully not needed, payout. Otherwise you would self insure. If your payouts are capped to 3 years you should be able to do a NPV type compare.

Gray
Posts: 658
Joined: Sat Apr 16, 2011 5:33 am

Re: Why I don't think I should get long term care insurance right now

Post by Gray » Sat Apr 27, 2019 1:03 pm

My wife waited, then got diagnosed with MS and RA. Now she can’t get it.

smitcat
Posts: 3563
Joined: Mon Nov 07, 2016 10:51 am

Re: Why I don't think I should get long term care insurance right now

Post by smitcat » Sat Apr 27, 2019 1:33 pm

We got it similar to your age but we are older - then watched the rates go up for others more than they expected.
Also - we wanted to be covered in our 50's in case one of us would need to use the LTCi as we each had/have income that would be disrupted as a result.
Additionally the costs of LTCi are somewhat lowered in these early ages as they are a deduction for us making the out of pocket costs about 2/3rds.
YMMV

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Sat Apr 27, 2019 1:50 pm

stats99 wrote:
Sat Apr 27, 2019 1:02 pm
Can you share your premium calculations that get you to $2 million.
I did not want to get too bogged down with numbers for this post. I had asked for a couple different alternatives. The original amount suggested was as follows:
Benefit amt: $360K
Inflation: 5% (stop increasing policy for inflation at 85)
Elimination period: 12 weeks
His total premium: $900K
Her total premium: $1,400K

I do understand there is a risk to waiting. I do feel it's a low risk as we don't have any family history of long-term care needs and feel we are both very healthy. Of course, a risk is still a risk.

From my understanding, rates can go up even if you have a policy. This confuses me as to why it is important to buy younger to lock in lower rates. I guess rate increases go up the same for all policies???
Last edited by markcoop on Sat Apr 27, 2019 2:27 pm, edited 1 time in total.
Mark

User avatar
HueyLD
Posts: 6923
Joined: Mon Jan 14, 2008 10:30 am

Re: Why I don't think I should get long term care insurance right now

Post by HueyLD » Sat Apr 27, 2019 2:07 pm

If you wait until you have been diagnosed with certain medical conditions, you may not be able to get a LTCI at any price.

Rwsawbones
Posts: 100
Joined: Fri Jan 20, 2017 11:21 pm

Re: Why I don't think I should get long term care insurance right now

Post by Rwsawbones » Sat Apr 27, 2019 2:26 pm

It is not only the elderly who require long term care. Illness and injury result in about 20 % of LTC Residents being younger than 50. Ailments that one can collect in one’s 50s can make one uninsurable

User avatar
Nate79
Posts: 4632
Joined: Thu Aug 11, 2016 6:24 pm
Location: Delaware

Re: Why I don't think I should get long term care insurance right now

Post by Nate79 » Sat Apr 27, 2019 2:33 pm

Have you shopped around? Your premiums sound ludicrously high.

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Sat Apr 27, 2019 2:39 pm

Nate79 wrote:
Sat Apr 27, 2019 2:33 pm
Have you shopped around? Your premiums sound ludicrously high.
I have not shopped around yet. The numbers quoted above were total premiums paid up until age 100. I thought this one insurer was enough to decide if I want to buy it now. If I decide yes, then I would shop around. I suspected that shopping around would not make a huge difference to the decision to buy or not, but maybe it does.
Mark

User avatar
unclescrooge
Posts: 3406
Joined: Thu Jun 07, 2012 7:00 pm

Re: Why I don't think I should get long term care insurance right now

Post by unclescrooge » Sat Apr 27, 2019 3:05 pm

markcoop wrote:
Sat Apr 27, 2019 1:50 pm
stats99 wrote:
Sat Apr 27, 2019 1:02 pm
Can you share your premium calculations that get you to $2 million.
I did not want to get too bogged down with numbers for this post. I had asked for a couple different alternatives. The original amount suggested was as follows:
Benefit amt: $360K
Inflation: 5% (stop increasing policy for inflation at 85)
Elimination period: 12 weeks
His total premium: $900K
Her total premium: $1,400K

I do understand there is a risk to waiting. I do feel it's a low risk as we don't have any family history of long-term care needs and feel we are both very healthy. Of course, a risk is still a risk.

From my understanding, rates can go up even if you have a policy. This confuses me as to why it is important to buy younger to lock in lower rates. I guess rate increases go up the same for all policies???
I'm confused.

Why would you pay $1.4m for only $360k of benefits?

fposte
Posts: 1536
Joined: Mon Sep 02, 2013 1:32 pm

Re: Why I don't think I should get long term care insurance right now

Post by fposte » Sat Apr 27, 2019 3:05 pm

Rwsawbones wrote:
Sat Apr 27, 2019 2:26 pm
It is not only the elderly who require long term care. Illness and injury result in about 20 % of LTC Residents being younger than 50.
That number is a fair bit higher than the CDC report here indicates--it says 84.9% of nursing home residents are over 65. And of course those 15.1% "below 65" numbers includes those who have been in such care since birth or entered it in childhood or young adulthood, not just those in their 40s or 50s.

I'm not at all saying that there's no chance of needing it in your 50s, but the likelihood of LTC rises considerably at later ages.
Last edited by fposte on Sat Apr 27, 2019 3:43 pm, edited 1 time in total.

User avatar
Artful Dodger
Posts: 655
Joined: Thu Oct 20, 2016 12:56 pm

Re: Why I don't think I should get long term care insurance right now

Post by Artful Dodger » Sat Apr 27, 2019 3:14 pm

There has to be a mistake somewhere. The premiums you quoted - $2.3 million over 47 years work out to almost $50,000 a year. We bought policies ten years ago when we were 55 and 56, and paid $2650 annually, then got a bump to $3950 annual. That's for a five year policy for each with 5% compound inflation. I think our current benefit is around $375,000 each.

I'd double check with your agent. Somethings not right. And, get some other quotes.

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Sat Apr 27, 2019 3:42 pm

unclescrooge wrote:
Sat Apr 27, 2019 3:05 pm
I'm confused.

Why would you pay $1.4m for only $360k of benefits?
I believe the answer is that $360K is in today's value. It would be a max of $10K/month today. By the time I hit 100, the max would be $47K/month. I am a bit confused if that is the total that would be paid for the life of the policy. It does not make sense you would continue to pay premiums once you have a payout.

I am pretty sure the numbers quoted are correct. Alot has changed in the past decade with prices. Of course, I may be missing some pertinent piece of information given that I am just starting to figure this out.
Mark

User avatar
celia
Posts: 9434
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Why I don't think I should get long term care insurance right now

Post by celia » Sat Apr 27, 2019 3:56 pm

markcoop wrote:
Sat Apr 27, 2019 12:50 pm
1. The total cost difference is about $20K total to not buy it now, but instead buy at age 59. . .

2. Total cost right now is close to 2 million. . .

3. . . To spend 2 million dollars and still not have full coverage seems crazy.

4. The policy quoted to me, which he said was typical, only covers 3 years worth claims (you can use it over a longer period).
Sounds like you've been talking to a slick salesman. He knows how to make money. I've never heard of anyone ever paying $2M for long term care. This must be for the most extreme case of someone needing it for 20 years when they are in a coma. Insurance companies limit their risk by putting a total benefit amount you can collect. Why would you pay more than the maximum payout in premiums? Just save those premiums instead and you likely will need to spend less than that when you need care or your heirs will be able to get all the savings instead.
6. I do feel I can self-insure for a few years (say 3). I have seen some of the statistics that show the odds of needing it for greater than 3 years is not great.
Very, very few people need more than 3 years of care. So save your money and self-insure.


I started LTC insurance in my 50s when I was working. The employer paid for a basic plan and I added on several options, paid through payroll withholding. When I retired, I re-evaluated the coverages and what you have to do to collect the benefit. (Basically, it has to be medically necessary and you need help in several Activities of Daily Living. Then you notify the insurance company who works with your doctor to find a facility that is qualified to give the services you need. The licensing of the facility and staff and staff ratio, etc. are evaluated. Only then will they approve payments to that facility, not to someplace you like because they have a nice building or it is close to your home.) Since this is what I would want, should I need LTC, I decided to keep the insurance and am still paying less than $100 a month (as current employees are under the same payment schedule). Even if the coverage is less than the total bill, due to inflation, or expensive medical services, I am willing to pay the difference.

Contrast this with another plan that many employees chose instead through the union. It sounds like it is very easy to get into any fancy facility you choose, no questions asked. Since claims are very, very expensive due to patient decisions, the premiums are also very expensive. I don't have any details of the union plan, but while employed, those who chose it kept talking about the increasing premiums (because a high number of former employees were making use of it).

I wonder if there is some correlation with the higher the premiums, the more likely the insureds want to get their money's worth, so check in when they could have continued at home with the help of relatives. I plan to live at home as long as possible and have relatives help me out just as I am helping out my elderly relatives.

Another reason my premiums are so low is that the employer is doing the "marketing" once a year during open enrollment. They also pay/collect the premiums, relieving the insurance company of having to pay people to do this for them.

JoeRetire
Posts: 2548
Joined: Tue Jan 16, 2018 2:44 pm

Re: Why I don't think I should get long term care insurance right now

Post by JoeRetire » Sat Apr 27, 2019 4:05 pm

markcoop wrote:
Sat Apr 27, 2019 1:50 pm
I did not want to get too bogged down with numbers for this post. I had asked for a couple different alternatives. The original amount suggested was as follows:
Benefit amt: $360K
Inflation: 5% (stop increasing policy for inflation at 85)
Elimination period: 12 weeks
His total premium: $900K
Her total premium: $1,400K
Something's not right here.

My wife and I pay a combined $5400/year for similar benefits with a 90-day elimination period. We started at 59, and the premiums have stayed the same for 5 years now.

Do you both have significant health issues?

User avatar
sergeant
Posts: 1128
Joined: Tue Dec 04, 2007 11:13 pm

Re: Why I don't think I should get long term care insurance right now

Post by sergeant » Sat Apr 27, 2019 4:10 pm

You have been given the highest quote for LTC ever! Something is wrong here. Could this be some hybrid product designed to enrich your salesman?

We pay $2400 combined for a policy with better benefits. We started at 53, and the premiums haven't changed in 4 years.
Lincoln 3 EOW!

bsteiner
Posts: 4063
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Why I don't think I should get long term care insurance right now

Post by bsteiner » Sat Apr 27, 2019 4:14 pm

celia wrote:
Sat Apr 27, 2019 3:56 pm
...
Very, very few people need more than 3 years of care. So save your money and self-insure.
...
So the ideal policy wouldn't pay for the first 3 years but would pay for everything after 3 years. That would protect against the risk that you're the one who needs care for a very long time. Since that doesn't happen very often, the premium should be relatively modest.

I'm not aware of any such policies. Are there any?

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Sat Apr 27, 2019 4:21 pm

Here's the info for my wife:

53, Female
Initial Annual Contract Premium: $3,400
State of Execution: New York

Maximum Monthly Limit for:
100% Nursing Home Care: $10K
100% Home Health Care: $10K
100% Assisted Living Facility Care: $10K

Annual Premium: $3,400

Caregiver Training Benefit:
$2,000.00 (Lifetime)

Elimination period:
12 Weeks

Benefit period:
3 Year

Benefit Account Value:
$360,000

Annual
$3,400.00

Cash Outlay
Premium (5% infl), Max Monthly Limit, Age

$3,400 $10,000 53
3,576 10,500 54
3,769 11,025 55
3,979 11,576 56
4,208 12,155 57
4,462 12,763 58
4,741 13,401 59
5,049 14,071 60
5,389 14,775 61
5,765 15,514 62
11,162 22,923 70
33,233 37,339 80
58,372 47,654 90
58,372 47,654 100
Total Premium: $1,433,765
Mark

User avatar
celia
Posts: 9434
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Why I don't think I should get long term care insurance right now

Post by celia » Sat Apr 27, 2019 4:29 pm

bsteiner wrote:
Sat Apr 27, 2019 4:14 pm
celia wrote:
Sat Apr 27, 2019 3:56 pm
...
Very, very few people need more than 3 years of care. So save your money and self-insure.
...
So the ideal policy wouldn't pay for the first 3 years but would pay for everything after 3 years. That would protect against the risk that you're the one who needs care for a very long time. Since that doesn't happen very often, the premium should be relatively modest.

I'm not aware of any such policies. Are there any?
Very interesting idea! I doubt they would sell, as most people aren't Bogleheads and would probably think: "I have to pay a $360K+ deductible first (and wait 3 years) before I can collect anything?"

This almost sounds like earthquake insurance in California (which we also carry, but most homeowners here don't).

smitcat
Posts: 3563
Joined: Mon Nov 07, 2016 10:51 am

Re: Why I don't think I should get long term care insurance right now

Post by smitcat » Sat Apr 27, 2019 4:34 pm

JoeRetire wrote:
Sat Apr 27, 2019 4:05 pm
markcoop wrote:
Sat Apr 27, 2019 1:50 pm
I did not want to get too bogged down with numbers for this post. I had asked for a couple different alternatives. The original amount suggested was as follows:
Benefit amt: $360K
Inflation: 5% (stop increasing policy for inflation at 85)
Elimination period: 12 weeks
His total premium: $900K
Her total premium: $1,400K
Something's not right here.

My wife and I pay a combined $5400/year for similar benefits with a 90-day elimination period. We started at 59, and the premiums have stayed the same for 5 years now.

Do you both have significant health issues?
Agreed - our numbers are not to far off of yours.

smitcat
Posts: 3563
Joined: Mon Nov 07, 2016 10:51 am

Re: Why I don't think I should get long term care insurance right now

Post by smitcat » Sat Apr 27, 2019 4:38 pm

markcoop wrote:
Sat Apr 27, 2019 4:21 pm
Here's the info for my wife:

53, Female
Initial Annual Contract Premium: $3,400
State of Execution: New York

Maximum Monthly Limit for:
100% Nursing Home Care: $10K
100% Home Health Care: $10K
100% Assisted Living Facility Care: $10K

Annual Premium: $3,400

Caregiver Training Benefit:
$2,000.00 (Lifetime)

Elimination period:
12 Weeks

Benefit period:
3 Year

Benefit Account Value:
$360,000

Annual
$3,400.00

Cash Outlay
Premium (5% infl), Max Monthly Limit, Age

$3,400 $10,000 53
3,576 10,500 54
3,769 11,025 55
3,979 11,576 56
4,208 12,155 57
4,462 12,763 58
4,741 13,401 59
5,049 14,071 60
5,389 14,775 61
5,765 15,514 62
11,162 22,923 70
33,233 37,339 80
58,372 47,654 90
58,372 47,654 100
Total Premium: $1,433,765


$3,400 $10,000 53
3,576 10,500 54
3,769 11,025 55
3,979 11,576 56
4,208 12,155 57
4,462 12,763 58
4,741 13,401 59
5,049 14,071 60
5,389 14,775 61
5,765 15,514 62
11,162 22,923 70
33,233 37,339 80
58,372 47,654 90
58,372 47,654 100

Is this the rate you would pay if you started the insurance at that age?

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Sat Apr 27, 2019 4:40 pm

celia wrote:
Sat Apr 27, 2019 4:29 pm
bsteiner wrote:
Sat Apr 27, 2019 4:14 pm
celia wrote:
Sat Apr 27, 2019 3:56 pm
...
Very, very few people need more than 3 years of care. So save your money and self-insure.
...
So the ideal policy wouldn't pay for the first 3 years but would pay for everything after 3 years. That would protect against the risk that you're the one who needs care for a very long time. Since that doesn't happen very often, the premium should be relatively modest.

I'm not aware of any such policies. Are there any?
Very interesting idea! I doubt they would sell, as most people aren't Bogleheads and would probably think: "I have to pay a $360K+ deductible first (and wait 3 years) before I can collect anything?"

This almost sounds like earthquake insurance in California (which we also carry, but most homeowners here don't).
I suggested something like this, but was told they don't offer it. The best I came up with was a 1 year waiting period (that's the max) and a smaller benefit (because I would pay the rest out of of pocket). If I do end up getting this insurance, I will do something like that - so partial insurance and partial self-insure.
Mark

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Sat Apr 27, 2019 4:42 pm

smitcat wrote:
Sat Apr 27, 2019 4:38 pm
Is this the rate you would pay if you started the insurance at that age?
No. That is the premium in each year. It goes up because of the inflation rider.

Edit: I believe that is the big difference with what is being compared here to other people's policies and why mine sounds so high.
Last edited by markcoop on Sat Apr 27, 2019 5:20 pm, edited 1 time in total.
Mark

smitcat
Posts: 3563
Joined: Mon Nov 07, 2016 10:51 am

Re: Why I don't think I should get long term care insurance right now

Post by smitcat » Sat Apr 27, 2019 4:45 pm

markcoop wrote:
Sat Apr 27, 2019 4:42 pm
smitcat wrote:
Sat Apr 27, 2019 4:38 pm
Is this the rate you would pay if you started the insurance at that age?
No. That is the premium in each year. It goes up because of the inflation rider.

Edit: I believe that is the big difference with would is being compared here to other people's policies and why mine sounds so high.
Then I certainly would not purchase that.
FWIW - ours did not go up nearly that % over a 10 year time period.

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Sat Apr 27, 2019 4:49 pm

smitcat wrote:
Sat Apr 27, 2019 4:45 pm
markcoop wrote:
Sat Apr 27, 2019 4:42 pm
smitcat wrote:
Sat Apr 27, 2019 4:38 pm
Is this the rate you would pay if you started the insurance at that age?
No. That is the premium in each year. It goes up because of the inflation rider.

Edit: I believe that is the big difference with would is being compared here to other people's policies and why mine sounds so high.
Then I certainly would not purchase that.
FWIW - ours did not go up nearly that % over a 10 year time period.
I don't understand. If I choose a 5% inflation rider, that is approx that amount you should expect the premium to increase by. I could choose a lower inflation rider. The unit cost for the insurance is the same.
Mark

marcopolo
Posts: 2110
Joined: Sat Dec 03, 2016 10:22 am

Re: Why I don't think I should get long term care insurance right now

Post by marcopolo » Sat Apr 27, 2019 4:55 pm

smitcat wrote:
Sat Apr 27, 2019 4:38 pm
markcoop wrote:
Sat Apr 27, 2019 4:21 pm
Here's the info for my wife:

53, Female
Initial Annual Contract Premium: $3,400
State of Execution: New York

Maximum Monthly Limit for:
100% Nursing Home Care: $10K
100% Home Health Care: $10K
100% Assisted Living Facility Care: $10K

Annual Premium: $3,400

Caregiver Training Benefit:
$2,000.00 (Lifetime)

Elimination period:
12 Weeks

Benefit period:
3 Year

Benefit Account Value:
$360,000

Annual
$3,400.00

Cash Outlay
Premium (5% infl), Max Monthly Limit, Age

$3,400 $10,000 53
3,576 10,500 54
3,769 11,025 55
3,979 11,576 56
4,208 12,155 57
4,462 12,763 58
4,741 13,401 59
5,049 14,071 60
5,389 14,775 61
5,765 15,514 62
11,162 22,923 70
33,233 37,339 80
58,372 47,654 90
58,372 47,654 100
Total Premium: $1,433,765


$3,400 $10,000 53
3,576 10,500 54
3,769 11,025 55
3,979 11,576 56
4,208 12,155 57
4,462 12,763 58
4,741 13,401 59
5,049 14,071 60
5,389 14,775 61
5,765 15,514 62
11,162 22,923 70
33,233 37,339 80
58,372 47,654 90
58,372 47,654 100

Is this the rate you would pay if you started the insurance at that age?
It appears the premiums are increasing at the same 5% rate as the benefit. So, the $1.4M in premiums is in today's dollars, but the $360k of benefits is inflation adjusted at 5%.
Once in a while you get shown the light, in the strangest of places if you look at it right.

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Sat Apr 27, 2019 5:00 pm

JoeRetire wrote:
Sat Apr 27, 2019 4:05 pm
markcoop wrote:
Sat Apr 27, 2019 1:50 pm
I did not want to get too bogged down with numbers for this post. I had asked for a couple different alternatives. The original amount suggested was as follows:
Benefit amt: $360K
Inflation: 5% (stop increasing policy for inflation at 85)
Elimination period: 12 weeks
His total premium: $900K
Her total premium: $1,400K
Something's not right here.

My wife and I pay a combined $5400/year for similar benefits with a 90-day elimination period. We started at 59, and the premiums have stayed the same for 5 years now.

Do you both have significant health issues?
No health issues at all. He also quoted me a policy starting at age 59. Combined $6,000/yr. I imagine the extra cost is due to premium increases in the past 5 years. Alot has changed. If your premiums stayed the same, then I guess you don't have an inflation rider??
Mark

smitcat
Posts: 3563
Joined: Mon Nov 07, 2016 10:51 am

Re: Why I don't think I should get long term care insurance right now

Post by smitcat » Sat Apr 27, 2019 5:20 pm

markcoop wrote:
Sat Apr 27, 2019 4:49 pm
smitcat wrote:
Sat Apr 27, 2019 4:45 pm
markcoop wrote:
Sat Apr 27, 2019 4:42 pm
smitcat wrote:
Sat Apr 27, 2019 4:38 pm
Is this the rate you would pay if you started the insurance at that age?
No. That is the premium in each year. It goes up because of the inflation rider.

Edit: I believe that is the big difference with would is being compared here to other people's policies and why mine sounds so high.
Then I certainly would not purchase that.
FWIW - ours did not go up nearly that % over a 10 year time period.
I don't understand. If I choose a 5% inflation rider, that is approx that amount you should expect the premium to increase by. I could choose a lower inflation rider. The unit cost for the insurance is the same.
I will be home tomorrow and look it up - we did buy ours more than 10 years ago.

Trader Joe
Posts: 800
Joined: Fri Apr 25, 2014 6:38 pm

Re: Why I don't think I should get long term care insurance right now

Post by Trader Joe » Sat Apr 27, 2019 5:35 pm

markcoop wrote:
Sat Apr 27, 2019 12:50 pm
My wife and myself are both 53 years old. I have been talking to an insurance salesperson about long term care insurance. At this point, I am leaning against getting it for the following reasons:

1. The total cost difference is about $20K total to not buy it now, but instead buy at age 59. Since I view this cost difference not very large relative to the total cost, I think waiting to pay for something I don't need for a few years a good option.

2. Total cost right now is close to 2 million. Companies have been raising rates over the last decade above inflation. So it could end up being alot more. That is alot of money to commit (really not committing but getting it now to keep the prices down) to a product that seems to be in a state of chaos. On the flip side, if policies continue to become more restrictive as to what is being offered, the possibility exists that policies will get less favorable going forward.

3. The premiums for these policies increase as one ages. In our 80s, I was told they really start to become cost prohibitive. My insurance salesman claims that many stop the inflation rider once they hit 80. The idea of lowering coverage in my 80s, when I need it the most, seems crazy to me. To spend 2 million dollars and still not have full coverage seems crazy.

4. The policy quoted to me, which he said was typical, only covers 3 years worth claims (you can use it over a longer period). This also seems crazy. Again, if true catastrophe strikes, the reason why one buys insurance, the insurance is not there.

5. I have concerns about these companies being able to pay in 30 years. They may even just cancel policies at some point. Or even issues getting them to pay.

6. I do feel I can self-insure for a few years (say 3). I have seen some of the statistics that show the odds of needing it for greater than 3 years is not great.

7. I feel waiting to see what alternatives come out in the future seems prudent as I feel this may (is?) a major issue for many people. If policies become less favorable due to the consolidating industry, I have to believe something will happen. Who knows, perhaps our government may have solutions.

I'd appreciate any comments.
I am near your own ages. Long-term care does not even enter my mind. For myself this is not a consideration.

I am currently health. This, of course, could change in a minute.

We all know the end result. Everyone has an expiration date.

I wish you all the best.

Katietsu
Posts: 2077
Joined: Sun Sep 22, 2013 1:48 am

Re: Why I don't think I should get long term care insurance right now

Post by Katietsu » Sat Apr 27, 2019 5:38 pm

I do not think the numbers sound that crazy. It is just that most people do not calculate total premiums to age 100 along with a 5% increase every year in both premiums and benefits.

User avatar
beyou
Posts: 2639
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: Why I don't think I should get long term care insurance right now

Post by beyou » Sat Apr 27, 2019 6:00 pm

I would not assume you would keep paying to age 100. Almost all other financial planning for retirement does not assume living past 100. SWR of 4% is safe for 30 years ? So that’s 89 (you policy starts at 59).

And once you go into a facility, you stop paying.

I am not sure of the correct way to calculate but this seems an overestimate. And given rates can be increased, even if you assume less years to pay, if the rates increase it will still be very expensive insurance. But what to assume ? What are typical increases ? Past what age might one conclude you can cancel ?

I am not seriously considering buying due to the uncertain increases and limited duration of 3 year coverage. I know people who had much more than need for help beyond 3 years. This feels more like prepaid services than catastrophic coverage.

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Sat Apr 27, 2019 6:02 pm

Katietsu wrote:
Sat Apr 27, 2019 5:38 pm
I do not think the numbers sound that crazy. It is just that most people do not calculate total premiums to age 100 along with a 5% increase every year in both premiums and benefits.
The numbers quoted stop the inflation rider at 85. I also asked to show me a policy with a 3% inflation rider, although it is easy to compute it myself. Why wouldn't one calculate the total premiums till I hope to live?

As for going to age 100 with an inflation rider (I think it should really not stop at 85), as you get older you are increasing the chance of needing the insurance. I would hate to live to 90, need the insurance, but stopped paying premiums at 85. Or stopped increasing the premium for inflation and then I can't afford the care. If I am buying long-term care, wouldn't I want it when I need it most? This point is one of the reasons I think I don't want to buy it yet...because as currently structured, it seems many policies won't pay the amount needed (adjusted for inflation after 85) or when it is needed (much later in life).
Mark

User avatar
beyou
Posts: 2639
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: Why I don't think I should get long term care insurance right now

Post by beyou » Sat Apr 27, 2019 6:53 pm

I can't get my head around paying so much yet not knowing how much I'll actually pay (premium increases).
I happily bought term insurance when kids were young, knowing exactly what it costs and what benefit.
When my auto insurance is raised, I can shop around and switch, can't here.

This is just so expensive and complex, it smells of the rule "if too complicated to explain don't buy it" like many financial products.
Until I understand it, I wont buy it, and I don't understand what I would be getting into...or maybe I do understand it and don't like it.
Not really sure.

jminv
Posts: 893
Joined: Tue Jan 02, 2018 10:58 pm

Re: Why I don't think I should get long term care insurance right now

Post by jminv » Sat Apr 27, 2019 7:27 pm

markcoop wrote:
Sat Apr 27, 2019 1:50 pm
I do understand there is a risk to waiting. I do feel it's a low risk as we don't have any family history of long-term care needs and feel we are both very healthy. Of course, a risk is still a risk.
That's a very small sample size, relatively speaking. It's interesting how the decision to buy long term care insurance is normally based on the experience of your immediate family members, though, even if it's not a great way to approach the decision. People who don't buy tend to be people whose parents never needed it while people that do had a parent that did.

I recently helped someone buy it who had a pre-existing condition that emerged in their late 50s. The process to get approval for coverage despite the condition took 6 months (medical underwriting). This is a form of group insurance so the underwriting standards are somewhat more lax but it was still very thorough. They obtained all medical records. The person was, however, concerned about be denied. Most insurers would just deny for individual coverage. Also, they will go through all your medical history. Lots of people develop issues in their 50s that aren't debilitating but will get you denied for insurance.

If you want coverage, shop around. What you were quoting seemed quite expensive.

pshonore
Posts: 6666
Joined: Sun Jun 28, 2009 2:21 pm

Re: Why I don't think I should get long term care insurance right now

Post by pshonore » Sat Apr 27, 2019 8:20 pm

markcoop wrote:
Sat Apr 27, 2019 4:49 pm
smitcat wrote:
Sat Apr 27, 2019 4:45 pm
markcoop wrote:
Sat Apr 27, 2019 4:42 pm
smitcat wrote:
Sat Apr 27, 2019 4:38 pm
Is this the rate you would pay if you started the insurance at that age?
No. That is the premium in each year. It goes up because of the inflation rider.

Edit: I believe that is the big difference with would is being compared here to other people's policies and why mine sounds so high.
Then I certainly would not purchase that.
FWIW - ours did not go up nearly that % over a 10 year time period.
I don't understand. If I choose a 5% inflation rider, that is approx that amount you should expect the premium to increase by. I could choose a lower inflation rider. The unit cost for the insurance is the same.
Not really; the stated rates were supposed to cover the inflation factors. A policy with no inflation would be much cheaper but would not return nearly the benefit. Unfortunately most companies made some bad assumptions and are asking for rate increases.

User avatar
celia
Posts: 9434
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Why I don't think I should get long term care insurance right now

Post by celia » Sat Apr 27, 2019 10:33 pm

Here's the big problem, I believe:
markcoop wrote:
Sat Apr 27, 2019 4:21 pm
Maximum Monthly Limit for:
100% Nursing Home Care: $10K
100% Home Health Care: $10K
100% Assisted Living Facility Care: $10K

Annual Premium: $3,400
Their definition of "Long Term Care Insurance" is strange. I wouldn't consider Home Care or Assisted Living as Long Term Care as "medical" is not "required" as part of their definition. I know of people who have moved to Assisted Living because they don't want to live alone or do housework/meal prep/laundry. There are no health issues for them. They are free to come and go as they wish, even to work, shopping, or drive a car to visit friends. I also know someone who has a "caretaker" come to their house as they gave up driving. The Caregiver does laundry, some meal prep, and drives them where they want to go. There's no way you would pay $10K a month for either of these services unless you are generous and live in a HCOL area. (I also know of a nearby Nursing Home that has parking for their residents but don't know any of the patients there.) For example, I have a relative who pays $2K a month for Assisted Living, but most of the people there are probably being covered by a state program. Living in a group home that also provides medical monitoring, is also around the same cost.

Yet, you are being quoted premiums for something you can get for much less, even if you start there (Home Care or Assisted Living) because of medical needs. If you went to Assisted Living for 3 years for the "convenience" it offers and were there for 5 years before going to a Nursing Home, per your doctor's recommendation, you would have used up your benefit just to make your life "convenient". Then when it really matters and you need a nurse to monitor your health needs in a Nursing Home (after the Medicare benefit runs out), you would no longer have coverage for it--the phase that really matters.

If you want LTC insurance, just get something that covers your medical needs when you are no longer able to perform your Activities of Daily Living. Start by getting quotes from other insurance agents.

In addition, because of how interest compounds, don't even think of 5% inflation. Go with 2% instead. Half of the quote you got was for applying inflation factors to previous inflation factors, and at a high rate, as well.

ABQ4804
Posts: 407
Joined: Sun Jul 24, 2011 4:08 pm

Re: Why I don't think I should get long term care insurance right now

Post by ABQ4804 » Sat Apr 27, 2019 11:03 pm

Markcoop, I think your math error is in applying the 5% inflation rider to your PREMIUM. My understanding is that inflation rider only applies to you COVERAGE. Annual premiums stay the same each year, unless raised for everyone in your class of coverage. That’s the advantage of buying LTC earlier, with lower premiums, plus maybe not qualifying medically in your 60’s. Hope this is helpful.

MtnBiker
Posts: 178
Joined: Sun Nov 16, 2014 4:43 pm

Re: Why I don't think I should get long term care insurance right now

Post by MtnBiker » Sat Apr 27, 2019 11:21 pm

markcoop wrote:
Sat Apr 27, 2019 4:21 pm
Here's the info for my wife:

Cash Outlay
Premium (5% infl), Max Monthly Limit, Age

$3,400 $10,000 53
3,576 10,500 54
3,769 11,025 55
3,979 11,576 56
4,208 12,155 57
4,462 12,763 58
4,741 13,401 59
5,049 14,071 60
5,389 14,775 61
5,765 15,514 62
11,162 22,923 70
33,233 37,339 80
58,372 47,654 90
58,372 47,654 100
Total Premium: $1,433,765
Are you sure those quoted premiums are what you would have to pay if you started the policy at age 53? It makes no sense to me. Those premiums are actually increasing at a rate greater than 5% per year! It looks more like a list of what the premium would be if you started the policy at those other ages.

As ABQ4804 said, isn't your quote for a level premium policy? I have a LTCi policy with 5% inflation rider. My annual premiums are level (same every year - only exception is when and if the insurance company is able to justifiably push a rate increase past the state insurance commissioner.)

User avatar
Artful Dodger
Posts: 655
Joined: Thu Oct 20, 2016 12:56 pm

Re: Why I don't think I should get long term care insurance right now

Post by Artful Dodger » Sat Apr 27, 2019 11:58 pm

ABQ4804 wrote:
Sat Apr 27, 2019 11:03 pm
Markcoop, I think your math error is in applying the 5% inflation rider to your PREMIUM. My understanding is that inflation rider only applies to you COVERAGE. Annual premiums stay the same each year, unless raised for everyone in your class of coverage. That’s the advantage of buying LTC earlier, with lower premiums, plus maybe not qualifying medically in your 60’s. Hope this is helpful.
This was the case for every plan I considered. The premiums were planned to be stable, and not go up. We did experience an increase after nine years, but that was due to higher loss ratio for the pool of buyers and the greatly reduced long term bond rates that supplement the future reserves of the company.

I think if you contact your agent to confirm, you'll find the premiums are level, and the benefit increases 5% per year.

I'm not saying you won't get a premium increase in the future. But, most companies have corrected their pricing to account for greater utilization within their pool and their portfolio investment results.

pshonore
Posts: 6666
Joined: Sun Jun 28, 2009 2:21 pm

Re: Why I don't think I should get long term care insurance right now

Post by pshonore » Sun Apr 28, 2019 8:09 am

celia wrote:
Sat Apr 27, 2019 10:33 pm
Here's the big problem, I believe:
markcoop wrote:
Sat Apr 27, 2019 4:21 pm
Maximum Monthly Limit for:
100% Nursing Home Care: $10K
100% Home Health Care: $10K
100% Assisted Living Facility Care: $10K

Annual Premium: $3,400
Their definition of "Long Term Care Insurance" is strange. I wouldn't consider Home Care or Assisted Living as Long Term Care as "medical" is not "required" as part of their definition. I know of people who have moved to Assisted Living because they don't want to live alone or do housework/meal prep/laundry. There are no health issues for them. They are free to come and go as they wish, even to work, shopping, or drive a car to visit friends. I also know someone who has a "caretaker" come to their house as they gave up driving. The Caregiver does laundry, some meal prep, and drives them where they want to go. There's no way you would pay $10K a month for either of these services unless you are generous and live in a HCOL area. (I also know of a nearby Nursing Home that has parking for their residents but don't know any of the patients there.) For example, I have a relative who pays $2K a month for Assisted Living, but most of the people there are probably being covered by a state program. Living in a group home that also provides medical monitoring, is also around the same cost.

Yet, you are being quoted premiums for something you can get for much less, even if you start there (Home Care or Assisted Living) because of medical needs. If you went to Assisted Living for 3 years for the "convenience" it offers and were there for 5 years before going to a Nursing Home, per your doctor's recommendation, you would have used up your benefit just to make your life "convenient". Then when it really matters and you need a nurse to monitor your health needs in a Nursing Home (after the Medicare benefit runs out), you would no longer have coverage for it--the phase that really matters.

If you want LTC insurance, just get something that covers your medical needs when you are no longer able to perform your Activities of Daily Living. Start by getting quotes from other insurance agents.

In addition, because of how interest compounds, don't even think of 5% inflation. Go with 2% instead. Half of the quote you got was for applying inflation factors to previous inflation factors, and at a high rate, as well.
I doubt most LTC policies will pay a benefit unless you meet the criteria. Something like "needs assistance with X number of the Daily Living activities". "Convenience" is not one of them.

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Sun Apr 28, 2019 11:22 am

I will inquire about the increasing premiums.

One point, however, is that the increasing premiums due to inflation is not necessarily the reason for buying earlier. Without the inflation rider, the cost would be stable. And if I bought it at a later age, say 59, the cost would be still be stable but more expensive. The inflation rider is what is causing the cost to go up, but at the same unit price as the year I started to buy the insurance (it doesn't seem to be exactly 5% increase in both, but it's pretty close).

Two thoughts enter my mind:
1) I misunderstood him. I thought he was pretty clear but I am open to that possibility.
2) The industry has changed and that is how it is done (maybe that depends on the company too).
Mark

Kennedy
Posts: 250
Joined: Mon Nov 10, 2014 2:47 pm

Re: Why I don't think I should get long term care insurance right now

Post by Kennedy » Sun Apr 28, 2019 12:02 pm

celia wrote:
Sat Apr 27, 2019 10:33 pm
Here's the big problem, I believe:
markcoop wrote:
Sat Apr 27, 2019 4:21 pm
Maximum Monthly Limit for:
100% Nursing Home Care: $10K
100% Home Health Care: $10K
100% Assisted Living Facility Care: $10K

Annual Premium: $3,400
Their definition of "Long Term Care Insurance" is strange. I wouldn't consider Home Care or Assisted Living as Long Term Care as "medical" is not "required" as part of their definition. I know of people who have moved to Assisted Living because they don't want to live alone or do housework/meal prep/laundry. There are no health issues for them. They are free to come and go as they wish, even to work, shopping, or drive a car to visit friends. I also know someone who has a "caretaker" come to their house as they gave up driving. The Caregiver does laundry, some meal prep, and drives them where they want to go. There's no way you would pay $10K a month for either of these services unless you are generous and live in a HCOL area. (I also know of a nearby Nursing Home that has parking for their residents but don't know any of the patients there.) For example, I have a relative who pays $2K a month for Assisted Living, but most of the people there are probably being covered by a state program. Living in a group home that also provides medical monitoring, is also around the same cost.

Yet, you are being quoted premiums for something you can get for much less, even if you start there (Home Care or Assisted Living) because of medical needs. If you went to Assisted Living for 3 years for the "convenience" it offers and were there for 5 years before going to a Nursing Home, per your doctor's recommendation, you would have used up your benefit just to make your life "convenient". Then when it really matters and you need a nurse to monitor your health needs in a Nursing Home (after the Medicare benefit runs out), you would no longer have coverage for it--the phase that really matters.

If you want LTC insurance, just get something that covers your medical needs when you are no longer able to perform your Activities of Daily Living. Start by getting quotes from other insurance agents.

In addition, because of how interest compounds, don't even think of 5% inflation. Go with 2% instead. Half of the quote you got was for applying inflation factors to previous inflation factors, and at a high rate, as well.
Celia, perhaps you are confusing Assisted Living facilities with Independent Living facilities. Most people living in a facility who work, go shopping on their own or drive a car are living in Independent Living. Assisted Living facilities are for those who generally need help with one or more of the activities of daily living (toileting, dressing, eating, transferring, bathing, continence care) but who do not need skilled nursing. I'm sure there are those who start in Assisted Living who do live more independently but who anticipate needing help with the ADL soon. Nursing home residents need skilled nursing and require a higher level of care, such as IVs, wound care and the like.

FBN2014
Posts: 629
Joined: Sat Mar 08, 2014 3:07 pm

Re: Why I don't think I should get long term care insurance right now

Post by FBN2014 » Sun Apr 28, 2019 3:14 pm

Have you looked at hybrid LTCi policies with a death benefit? One America, Nationwide, and Lincoln Financial offer these type of policies.
"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

JoeRetire
Posts: 2548
Joined: Tue Jan 16, 2018 2:44 pm

Re: Why I don't think I should get long term care insurance right now

Post by JoeRetire » Sun Apr 28, 2019 6:53 pm

markcoop wrote:
Sat Apr 27, 2019 4:42 pm
smitcat wrote:
Sat Apr 27, 2019 4:38 pm
Is this the rate you would pay if you started the insurance at that age?
No. That is the premium in each year. It goes up because of the inflation rider.

Edit: I believe that is the big difference with what is being compared here to other people's policies and why mine sounds so high.

No health issues at all. He also quoted me a policy starting at age 59. Combined $6,000/yr. I imagine the extra cost is due to premium increases in the past 5 years. Alot has changed. If your premiums stayed the same, then I guess you don't have an inflation rider??
I have an inflation rider. My premiums are nowhere near as high as yours.
And our premiums haven't increased at all in the 5 years we've had the insurance.

Premiums haven't increased that much in the past 5 years - I have relatives who have taken out similar policies (one 4 years ago, one last year) that don't have automatic premium increases as you are presenting, yet do have an inflation rider.

Sorry, I think you are confused.
1) I misunderstood him. I thought he was pretty clear but I am open to that possibility.
2) The industry has changed and that is how it is done (maybe that depends on the company too).
I'm pretty sure it's 1). Because that's not how it is done, unless you are dealing with some outlier company that doesn't really want to be in the business.

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Mon Apr 29, 2019 8:43 am

The company is Northwestern Mutual.
Mark

pintail07
Posts: 367
Joined: Fri Nov 04, 2016 5:07 pm

Re: Why I don't think I should get long term care insurance right now

Post by pintail07 » Mon Apr 29, 2019 11:28 am

Northwestern has one of the most expensive plans available. I sell LTC and show clients the rates of all companies. You need to speak with an independent broker. I rarely suggest 5% inflation, stay at 3%.

User avatar
sergeant
Posts: 1128
Joined: Tue Dec 04, 2007 11:13 pm

Re: Why I don't think I should get long term care insurance right now

Post by sergeant » Mon Apr 29, 2019 1:03 pm

markcoop wrote:
Sat Apr 27, 2019 5:00 pm
JoeRetire wrote:
Sat Apr 27, 2019 4:05 pm
markcoop wrote:
Sat Apr 27, 2019 1:50 pm
I did not want to get too bogged down with numbers for this post. I had asked for a couple different alternatives. The original amount suggested was as follows:
Benefit amt: $360K
Inflation: 5% (stop increasing policy for inflation at 85)
Elimination period: 12 weeks
His total premium: $900K
Her total premium: $1,400K
Something's not right here.

My wife and I pay a combined $5400/year for similar benefits with a 90-day elimination period. We started at 59, and the premiums have stayed the same for 5 years now.

Do you both have significant health issues?
No health issues at all. He also quoted me a policy starting at age 59. Combined $6,000/yr. I imagine the extra cost is due to premium increases in the past 5 years. Alot has changed. If your premiums stayed the same, then I guess you don't have an inflation rider??
I have 5% just like yours but only for the first 15 years, There are no rate increases built in to my policy. The company would need approval from the state insurance commission to raise rates. Shop around.
Lincoln 3 EOW!

User avatar
celia
Posts: 9434
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Why I don't think I should get long term care insurance right now

Post by celia » Mon Apr 29, 2019 1:10 pm

Kennedy wrote:
Sun Apr 28, 2019 12:02 pm
Celia, perhaps you are confusing Assisted Living facilities with Independent Living facilities. Most people living in a facility who work, go shopping on their own or drive a car are living in Independent Living. Assisted Living facilities are for those who generally need help with one or more of the activities of daily living (toileting, dressing, eating, transferring, bathing, continence care) but who do not need skilled nursing. I'm sure there are those who start in Assisted Living who do live more independently but who anticipate needing help with the ADL soon. Nursing home residents need skilled nursing and require a higher level of care, such as IVs, wound care and the like.
I completely agree and understand the differences. I was surprised to see a few people who did not need any medical assistance at all, but still lived there. I know someone who was moved to Assisted Living only because they would fall occasionally. Rather than using a walker at home, she was moved to Assisted Living using the insurance paid for by the union plan (easier to collect benefits, thus the higher premiums).

My main point, however, was that Assisted Living usually doesn't cost $10K a month, but OP was looking to pay premiums as if it did. OP, I had an inflation rider and it was a fixed cost, quoted up front and paid for each month. The premiums didn't increase each year after that because of the inflation factor. But, usually it is only good for 15 or 20 years of inflation coverage, then the maximum monthly benefit freezes.

Vanguard Fan 1367
Posts: 939
Joined: Wed Feb 08, 2017 3:09 pm

Re: Why I don't think I should get long term care insurance right now

Post by Vanguard Fan 1367 » Mon Apr 29, 2019 1:12 pm

Dave Ramsey suggested that I should get long term care insurance. I kept it for a couple of years or so but then decided to not keep it when I got significant increases in the premiums.

Topic Author
markcoop
Posts: 974
Joined: Fri Mar 02, 2007 8:36 am

Re: Why I don't think I should get long term care insurance right now

Post by markcoop » Mon Apr 29, 2019 1:14 pm

So here's the scoop on what is being offered to me. They have many policies and many options. A fixed premium policy is an option as well as the inflation adjusted premium option I quoted earlier. I had mentioned one kind of policy I am considering, if I decide to do this, will be one with a longer holding period (max is 1 year) and less coverage. I also would consider a smaller inflation factor. So, here is the cost of such a policy with constant premiums.

53, male
State of Execution: New York

Maximum Monthly Limit for:
100% Nursing Home Care: $8K
100% Home Health Care: $8K
100% Assisted Living Facility Care: $8K

Caregiver Training Benefit:
$1,600.00 (Lifetime)

Elimination period:
52 Weeks

Benefit period:
3 Year

Benefit Account Value:
$288,000

Constant premiums: $2,960. Total paid at age 100: $142K

Now, it is hard to compare this to the previous quoted numbers because a number of variables have changed. The closest comparison I have is a variable inflation premium but with a 5% inflation factor. For that, the premiums start at $1,331 but eventually climb to $21,602 at age 100. Total paid at age 100 is $535K. My take is the extra 2% inflation factor makes a large difference here and in the numbers quoted above.

So, my conclusions from all this is that Northwestern Mutual offers many different kind of policies. They may very well be more expensive. To really compare prices, I would need to look at the ratings and financial strength of the insurance companies. Again, when I make the decision to buy, I would do my due diligence and get more than one quote.

My big question at this point is whether to get this insurance now at age 53, wait a few years till my late 50s or self insure. For the purpose of this thread, I was hoping just to compare the first two options - get it now or get it in my late 50s.
Mark

Post Reply