Long term care insurance [looking for information]

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Topic Author
chickevans9
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Long term care insurance [looking for information]

Post by chickevans9 » Sat Oct 05, 2019 8:20 pm

Can you point me to good resources for reading up on long term care insurance? Thank you

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oldcomputerguy
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Re: Long term care insurance [looking for information]

Post by oldcomputerguy » Sat Oct 05, 2019 8:48 pm

This topic is now in the Personal Finance forum (insurance).
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

Silk McCue
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Joined: Thu Feb 25, 2016 7:11 pm

Re: Long term care insurance [looking for information]

Post by Silk McCue » Sat Oct 05, 2019 8:55 pm

Welcome to Bogleheads!

LTCi is a very contentious subject here. I’m a believer.

I recommend this book.

https://www.amazon.com/Simple-LTC-Solut ... 475&sr=8-1

Cheers

marcopolo
Posts: 2313
Joined: Sat Dec 03, 2016 10:22 am

Re: Long term care insurance [looking for information]

Post by marcopolo » Sat Oct 05, 2019 9:22 pm

Silk McCue wrote:
Sat Oct 05, 2019 8:55 pm
Welcome to Bogleheads!

LTCi is a very contentious subject here. I’m a believer.

I recommend this book.

https://www.amazon.com/Simple-LTC-Solut ... 475&sr=8-1

Cheers
I haven't read the linked book.
But, the fact that the author uses the word "simple" regarding anything to do with LTCi, would make me question anything else he has to say.
Once in a while you get shown the light, in the strangest of places if you look at it right.

TN_Boy
Posts: 1130
Joined: Sat Jan 17, 2009 12:51 pm

Re: Long term care insurance [looking for information]

Post by TN_Boy » Sat Oct 05, 2019 9:56 pm

chickevans9 wrote:
Sat Oct 05, 2019 8:20 pm
Can you point me to good resources for reading up on long term care insurance? Thank you
I'll give some things to learn about, instead of specific references.

1) Do your own research on how likely you are to need LTC, and for how long.
2) Do your own research on how many years you are likely to pay LTC premiums (i.e. age to get the insurance, when you might need it)
3) Get quotes on the insurance, understanding that premiums are likely to go up some (how much is not clear). Understand the coverage limits.
4) Multiply the answer you get for 2) with the quotes you get in 3) [How much will you pay for LTC insurance over a long period of time]
5) Understand the different types of LTC -- home health aides, assisted living, skilled nursing, etc. And how much they cost per year in your area.
6) Consider how well your income and investments in retirement (and possibly the equity in your house) could cover the costs you researched in 1) and 5). Compare that to the cost for insurance you came up with in 4).

If you have a decent understanding of those six things, I believe you can make an informed decision. You may find that the answer on whether to get LTC insurance is not obvious. But you will have most of the facts you need.

See for example https://longtermcare.acl.gov/the-basics ... -need.html

Small Savanna
Posts: 120
Joined: Sat Feb 09, 2019 2:27 am

Re: Long term care insurance [looking for information]

Post by Small Savanna » Sat Oct 05, 2019 10:45 pm

You will hear a diversity of opinions from people on this forum, but I'm a fan of having long term care insurance. The rationale for long term care insurance is the same as for any insurance - to make a potentially large and unpredictable expense predicable. My father needed a home health aide and eventually a nursing home, and the cost was significant. If I end up in the same boat, I don't want my family to have to worry about how to pay for my care.

I bought into the Federal employee long term care insurance program at age 50; I'm 59 now. Although the premiums aren't subsidized, they still seem to be very reasonably priced. Rates are a function of age when you enroll and benefits you select. The program is open not only to federal employees but also to their spouses, children, and parents, so if you have a Fed in your family it is worth checking into. Even if you aren't eligible, the rates may be a good benchmark for other providers.

Here are the details of my policy: Cost is $112 per month. After the first 90 days of spending on long term care, the plan pays up to $191 per day for up to five years. There is an inflation adjustment of some sort - I don't understand how it's calculated but the maximum daily benefit increases slightly each year. Cost and benefits aren't fully locked: two years ago there was a change in the actuarial assumptions and I had to choose between a reduced benefit or an increased premium, and I suppose there is a risk this could happen again. My wife is also covered, and her premium is $89 per month because she was younger when she signed up.

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calmaniac
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Re: Long term care insurance [looking for information]

Post by calmaniac » Sat Oct 05, 2019 10:47 pm

Check out the Bogleheads Wiki on Long term care insurance: https://www.bogleheads.org/wiki/Long-te ... _insurance

In the upper right hand corner of this screen is a search bar, type in "Long term care insurance" and read previous posts. Those posts will be full of additional resources and wisdom.

Silk McCue
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Re: Long term care insurance [looking for information]

Post by Silk McCue » Sun Oct 06, 2019 5:59 am

marcopolo wrote:
Sat Oct 05, 2019 9:22 pm
Silk McCue wrote:
Sat Oct 05, 2019 8:55 pm
Welcome to Bogleheads!

LTCi is a very contentious subject here. I’m a believer.

I recommend this book.

https://www.amazon.com/Simple-LTC-Solut ... 475&sr=8-1

Cheers
I haven't read the linked book.
But, the fact that the author uses the word "simple" regarding anything to do with LTCi, would make me question anything else he has to say.
Proving once again you can’t judge a book by its cover.

Cheers

Topic Author
chickevans9
Posts: 3
Joined: Sat Oct 05, 2019 8:17 pm

Re: Long term care insurance [looking for information]

Post by chickevans9 » Sun Oct 06, 2019 8:10 am

Thank you all. These are great places to start.

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

Re: Long term care insurance [looking for information]

Post by WoW2012 » Sun Oct 06, 2019 5:26 pm

marcopolo wrote:
Sat Oct 05, 2019 9:22 pm
Silk McCue wrote:
Sat Oct 05, 2019 8:55 pm
Welcome to Bogleheads!

LTCi is a very contentious subject here. I’m a believer.

I recommend this book.

https://www.amazon.com/Simple-LTC-Solut ... 475&sr=8-1

Cheers
I haven't read the linked book.
But, the fact that the author uses the word "simple" regarding anything to do with LTCi, would make me question anything else he has to say.

Did you read the reviews?

WoW2012
Posts: 584
Joined: Sun Dec 23, 2012 11:28 am

Re: Long term care insurance [looking for information]

Post by WoW2012 » Sun Oct 06, 2019 5:30 pm

TN_Boy wrote:
Sat Oct 05, 2019 9:56 pm
chickevans9 wrote:
Sat Oct 05, 2019 8:20 pm
Can you point me to good resources for reading up on long term care insurance? Thank you
I'll give some things to learn about, instead of specific references.

1) Do your own research on how likely you are to need LTC, and for how long.
2) Do your own research on how many years you are likely to pay LTC premiums (i.e. age to get the insurance, when you might need it)
3) Get quotes on the insurance, understanding that premiums are likely to go up some (how much is not clear). Understand the coverage limits.
4) Multiply the answer you get for 2) with the quotes you get in 3) [How much will you pay for LTC insurance over a long period of time]
5) Understand the different types of LTC -- home health aides, assisted living, skilled nursing, etc. And how much they cost per year in your area.
6) Consider how well your income and investments in retirement (and possibly the equity in your house) could cover the costs you researched in 1) and 5). Compare that to the cost for insurance you came up with in 4).

If you have a decent understanding of those six things, I believe you can make an informed decision. You may find that the answer on whether to get LTC insurance is not obvious. But you will have most of the facts you need.

See for example https://longtermcare.acl.gov/the-basics ... -need.html

1) Do your own research on how likely you are to need LTC, and for how long.
Unknowable

2) Do your own research on how many years you are likely to pay LTC premiums (i.e. age to get the insurance, when you might need it)
Unknowable

3) Get quotes on the insurance, understanding that premiums are likely to go up some (how much is not clear). Understand the coverage limits.
Knowable

4) Multiply the answer you get for 2) with the quotes you get in 3) [How much will you pay for LTC insurance over a long period of time]
Unknowable

5) Understand the different types of LTC -- home health aides, assisted living, skilled nursing, etc. And how much they cost per year in your area.
Knowable

6) Consider how well your income and investments in retirement (and possibly the equity in your house) could cover the costs you researched in 1) and 5). Compare that to the cost for insurance you came up with in 4).
Unknowable.

TN_Boy
Posts: 1130
Joined: Sat Jan 17, 2009 12:51 pm

Re: Long term care insurance [looking for information]

Post by TN_Boy » Sun Oct 06, 2019 7:31 pm

WoW2012 wrote:
Sun Oct 06, 2019 5:30 pm
TN_Boy wrote:
Sat Oct 05, 2019 9:56 pm
chickevans9 wrote:
Sat Oct 05, 2019 8:20 pm
Can you point me to good resources for reading up on long term care insurance? Thank you
I'll give some things to learn about, instead of specific references.

1) Do your own research on how likely you are to need LTC, and for how long.
2) Do your own research on how many years you are likely to pay LTC premiums (i.e. age to get the insurance, when you might need it)
3) Get quotes on the insurance, understanding that premiums are likely to go up some (how much is not clear). Understand the coverage limits.
4) Multiply the answer you get for 2) with the quotes you get in 3) [How much will you pay for LTC insurance over a long period of time]
5) Understand the different types of LTC -- home health aides, assisted living, skilled nursing, etc. And how much they cost per year in your area.
6) Consider how well your income and investments in retirement (and possibly the equity in your house) could cover the costs you researched in 1) and 5). Compare that to the cost for insurance you came up with in 4).

If you have a decent understanding of those six things, I believe you can make an informed decision. You may find that the answer on whether to get LTC insurance is not obvious. But you will have most of the facts you need.

See for example https://longtermcare.acl.gov/the-basics ... -need.html

1) Do your own research on how likely you are to need LTC, and for how long.
Unknowable

2) Do your own research on how many years you are likely to pay LTC premiums (i.e. age to get the insurance, when you might need it)
Unknowable

3) Get quotes on the insurance, understanding that premiums are likely to go up some (how much is not clear). Understand the coverage limits.
Knowable

4) Multiply the answer you get for 2) with the quotes you get in 3) [How much will you pay for LTC insurance over a long period of time]
Unknowable

5) Understand the different types of LTC -- home health aides, assisted living, skilled nursing, etc. And how much they cost per year in your area.
Knowable

6) Consider how well your income and investments in retirement (and possibly the equity in your house) could cover the costs you researched in 1) and 5). Compare that to the cost for insurance you came up with in 4).
Unknowable.
Sigh. OP, you are about to learn how important it is to do your own research. WoW2012 posts frequently on LTC insurance issues. He sells LTC insurances policies and passionately defends them.

With respect to 1). No, you cannot predict exactly how long you might need LTC, but you can look at likely outcomes, as I said. See the website I linked to: https://longtermcare.acl.gov/the-basics ... -need.html This gives you information to put together *likely* costs you might face. Another link is this one: https://www.morningstar.com/articles/82 ... gterm-care

With respect to 2). A typical recommendation is to get LTC insurance at age 60, or even before. Most people who go into LTC facilities are, well pretty old, at least 75. This means it is rational to assume that you will be paying LTC premiums for 15 to 20 years before you need care, if you need care.

4) This is really simple. Assume your LTC insurance is $4k/per year (after getting a quote in 3). At $4k per year, then 15 years costs $60k and it could easily be longer than that before you make a claim. $4k/year is a pretty low premium; it is not going to cover the $1,000,000 scenario I mention below. Asserting you cannot make a pretty good estimate here is ..... misleading. Well, the premiums won't go down and they might go up, which makes it a touch harder to estimate.

6) Very obviously, you can look at the information you've collected in 1) and 5) and come up with a range of costs, and importantly, know the difference between typical situations and worst case scenarios. And then look at your income and investments and see how they could handle the problem.

If you are worried about worst case scenarios -- say a decade in skilled nursing, which is going to cost $1,000,000 or more, then it might make sense, if you could afford it, to just pay for that (expensive) coverage and be done with it. Salespeople will naturally focus on the worst case scenarios. Do your own research.

But the reality, which some posters try hard to obscure, is that you can easily spend six figures on LTC insurance and and wind up needing only shorter (or no) stays in a care facility. And typical stays could easily be covered by your investments and income (SS, pension, etc). A common sales gambit is to focus on the yearly cost and ignore the lifetime cost of the insurance, while emphasizing the worst case scenarios.

Another thing you might want to do is read articles on whether to buy or not buy LTC insurance written by people not selling the insurance.

One other thing I forgot to mention. The LTC insurance industry went through a rough patch a view years ago; they under-priced their policies. Most of the companies got out of the game. The policies you can buy today are much more expensive than the polices you could buy 15 years ago. So if somebody tells you how great their LTC policy is, be sure it is not one of the older, under-priced ones.

I don't sell LTC insurance. I've dealt with multiple relatives in care facilities and also worked with LTC insurance on the policy-holder side (had no issues with the policy I wound up working with; claims were paid promptly and the company was easy to work with. Though I don't think they sell policies anymore).

I may bow out of this thread, since I doubt that either WoW2012 or I will say anything we have not said before in other threads on LTC insurance.

Small Savanna
Posts: 120
Joined: Sat Feb 09, 2019 2:27 am

Re: Long term care insurance [looking for information]

Post by Small Savanna » Sun Oct 06, 2019 8:00 pm

To say that something is "unknowable" is only partially true, and not very helpful. Nobody can predict the future, but you can certainly estimate the likelihood of needing to spend time in a long term care facility, and rank it against other things you might buy insurance for. It's much more likely that you will need to spend time in a nursing home than that you will be killed by a shark for example. So I'd rather buy long term care insurance than shark insurance, and I would expect the premiums on long term care insurance to be a lot higher than shark insurance. The links provided above seem helpful in bounding the problem.

smitcat
Posts: 4044
Joined: Mon Nov 07, 2016 10:51 am

Re: Long term care insurance [looking for information]

Post by smitcat » Mon Oct 07, 2019 8:50 am

TN_Boy wrote:
Sat Oct 05, 2019 9:56 pm
chickevans9 wrote:
Sat Oct 05, 2019 8:20 pm
Can you point me to good resources for reading up on long term care insurance? Thank you
I'll give some things to learn about, instead of specific references.

1) Do your own research on how likely you are to need LTC, and for how long.
2) Do your own research on how many years you are likely to pay LTC premiums (i.e. age to get the insurance, when you might need it)
3) Get quotes on the insurance, understanding that premiums are likely to go up some (how much is not clear). Understand the coverage limits.
4) Multiply the answer you get for 2) with the quotes you get in 3) [How much will you pay for LTC insurance over a long period of time]
5) Understand the different types of LTC -- home health aides, assisted living, skilled nursing, etc. And how much they cost per year in your area.
6) Consider how well your income and investments in retirement (and possibly the equity in your house) could cover the costs you researched in 1) and 5). Compare that to the cost for insurance you came up with in 4).

If you have a decent understanding of those six things, I believe you can make an informed decision. You may find that the answer on whether to get LTC insurance is not obvious. But you will have most of the facts you need.

See for example https://longtermcare.acl.gov/the-basics ... -need.html

"I'll give some things to learn about, instead of specific references.

1) Do your own research on how likely you are to need LTC, and for how long.
2) Do your own research on how many years you are likely to pay LTC premiums (i.e. age to get the insurance, when you might need it)
3) Get quotes on the insurance, understanding that premiums are likely to go up some (how much is not clear). Understand the coverage limits.
4) Multiply the answer you get for 2) with the quotes you get in 3) [How much will you pay for LTC insurance over a long period of time]
5) Understand the different types of LTC -- home health aides, assisted living, skilled nursing, etc. And how much they cost per year in your area.
6) Consider how well your income and investments in retirement (and possibly the equity in your house) could cover the costs you researched in 1) and 5). Compare that to the cost for insurance you came up with in 4)."

Interesting results would likely occur if you applied generally similar guidelines on other insurances...like home insurance for example.

smitcat
Posts: 4044
Joined: Mon Nov 07, 2016 10:51 am

Re: Long term care insurance [looking for information]

Post by smitcat » Mon Oct 07, 2019 8:52 am

Small Savanna wrote:
Sun Oct 06, 2019 8:00 pm
To say that something is "unknowable" is only partially true, and not very helpful. Nobody can predict the future, but you can certainly estimate the likelihood of needing to spend time in a long term care facility, and rank it against other things you might buy insurance for. It's much more likely that you will need to spend time in a nursing home than that you will be killed by a shark for example. So I'd rather buy long term care insurance than shark insurance, and I would expect the premiums on long term care insurance to be a lot higher than shark insurance. The links provided above seem helpful in bounding the problem.
Interestingly - I have been involved with an invention that deters shark attacks. You are exactly correct….the likelihood of being attacked by a shark are very small.

bsteiner
Posts: 4304
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Long term care insurance [looking for information]

Post by bsteiner » Mon Oct 07, 2019 9:46 am

The purpose of insurance is to protect against losses that would create a hardship if they were to occur, even if they're unlikely to occur. The less likely they are to occur, the less expensive it should cost to insure against them.

So I would look for a policy that covered the longest possible duration (lifetime if possible). I would look for the longest possible waiting period (deductible) for which I could afford to pay the cost of the care without it being a burden.

Soon2BXProgrammer
Posts: 677
Joined: Mon Nov 24, 2014 11:30 pm

Re: Long term care insurance [looking for information]

Post by Soon2BXProgrammer » Mon Oct 07, 2019 9:51 am

TN_Boy wrote:
Sun Oct 06, 2019 7:31 pm
WoW2012 wrote:
Sun Oct 06, 2019 5:30 pm
TN_Boy wrote:
Sat Oct 05, 2019 9:56 pm
chickevans9 wrote:
Sat Oct 05, 2019 8:20 pm
Can you point me to good resources for reading up on long term care insurance? Thank you
I'll give some things to learn about, instead of specific references.

1) Do your own research on how likely you are to need LTC, and for how long.
2) Do your own research on how many years you are likely to pay LTC premiums (i.e. age to get the insurance, when you might need it)
3) Get quotes on the insurance, understanding that premiums are likely to go up some (how much is not clear). Understand the coverage limits.
4) Multiply the answer you get for 2) with the quotes you get in 3) [How much will you pay for LTC insurance over a long period of time]
5) Understand the different types of LTC -- home health aides, assisted living, skilled nursing, etc. And how much they cost per year in your area.
6) Consider how well your income and investments in retirement (and possibly the equity in your house) could cover the costs you researched in 1) and 5). Compare that to the cost for insurance you came up with in 4).

If you have a decent understanding of those six things, I believe you can make an informed decision. You may find that the answer on whether to get LTC insurance is not obvious. But you will have most of the facts you need.

See for example https://longtermcare.acl.gov/the-basics ... -need.html

1) Do your own research on how likely you are to need LTC, and for how long.
Unknowable

2) Do your own research on how many years you are likely to pay LTC premiums (i.e. age to get the insurance, when you might need it)
Unknowable

3) Get quotes on the insurance, understanding that premiums are likely to go up some (how much is not clear). Understand the coverage limits.
Knowable

4) Multiply the answer you get for 2) with the quotes you get in 3) [How much will you pay for LTC insurance over a long period of time]
Unknowable

5) Understand the different types of LTC -- home health aides, assisted living, skilled nursing, etc. And how much they cost per year in your area.
Knowable

6) Consider how well your income and investments in retirement (and possibly the equity in your house) could cover the costs you researched in 1) and 5). Compare that to the cost for insurance you came up with in 4).
Unknowable.
Sigh. OP, you are about to learn how important it is to do your own research. WoW2012 posts frequently on LTC insurance issues. He sells LTC insurances policies and passionately defends them.

With respect to 1). No, you cannot predict exactly how long you might need LTC, but you can look at likely outcomes, as I said. See the website I linked to: https://longtermcare.acl.gov/the-basics ... -need.html This gives you information to put together *likely* costs you might face. Another link is this one: https://www.morningstar.com/articles/82 ... gterm-care

With respect to 2). A typical recommendation is to get LTC insurance at age 60, or even before. Most people who go into LTC facilities are, well pretty old, at least 75. This means it is rational to assume that you will be paying LTC premiums for 15 to 20 years before you need care, if you need care.

4) This is really simple. Assume your LTC insurance is $4k/per year (after getting a quote in 3). At $4k per year, then 15 years costs $60k and it could easily be longer than that before you make a claim. $4k/year is a pretty low premium; it is not going to cover the $1,000,000 scenario I mention below. Asserting you cannot make a pretty good estimate here is ..... misleading. Well, the premiums won't go down and they might go up, which makes it a touch harder to estimate.

6) Very obviously, you can look at the information you've collected in 1) and 5) and come up with a range of costs, and importantly, know the difference between typical situations and worst case scenarios. And then look at your income and investments and see how they could handle the problem.

If you are worried about worst case scenarios -- say a decade in skilled nursing, which is going to cost $1,000,000 or more, then it might make sense, if you could afford it, to just pay for that (expensive) coverage and be done with it. Salespeople will naturally focus on the worst case scenarios. Do your own research.

But the reality, which some posters try hard to obscure, is that you can easily spend six figures on LTC insurance and and wind up needing only shorter (or no) stays in a care facility. And typical stays could easily be covered by your investments and income (SS, pension, etc). A common sales gambit is to focus on the yearly cost and ignore the lifetime cost of the insurance, while emphasizing the worst case scenarios.

Another thing you might want to do is read articles on whether to buy or not buy LTC insurance written by people not selling the insurance.

One other thing I forgot to mention. The LTC insurance industry went through a rough patch a view years ago; they under-priced their policies. Most of the companies got out of the game. The policies you can buy today are much more expensive than the polices you could buy 15 years ago. So if somebody tells you how great their LTC policy is, be sure it is not one of the older, under-priced ones.

I don't sell LTC insurance. I've dealt with multiple relatives in care facilities and also worked with LTC insurance on the policy-holder side (had no issues with the policy I wound up working with; claims were paid promptly and the company was easy to work with. Though I don't think they sell policies anymore).

I may bow out of this thread, since I doubt that either WoW2012 or I will say anything we have not said before in other threads on LTC insurance.
If i was going to look for a long term care insurance policy, I would be looking for something with a really large waiting period (years?) then insured for life. I am willing to self-fund a few years, but would like insurance for the catastrophic tail. I haven't looked to see if policies like this exist.

I would not be interested in the policies that fund " 2-3 years of expenses" since that is something that could be saved for (in my mind).

TN_Boy
Posts: 1130
Joined: Sat Jan 17, 2009 12:51 pm

Re: Long term care insurance [looking for information]

Post by TN_Boy » Mon Oct 07, 2019 11:56 am

smitcat wrote:
Mon Oct 07, 2019 8:50 am
snip
Interesting results would likely occur if you applied generally similar guidelines on other insurances...like home insurance for example.
In fact, we've had more than one thread from people considering dropping their homeowners once the mortgage was paid off. We could afford to replace our house out of pocket if it burned down. Rather not ... but could afford it. You also have to look at how easy it is in retirement to pull out a large lump sum, or get a mortgage for the replacement, etc. That is, you have to pay for the house to be rebuilt, plus living somewhere else for a while, and if you pulled out a big lump sum you might take a large tax hit, etc ... the costs are higher than simply the assessed value of your house, should you have to rebuild.

However, it's slightly more complex than that. I'd still want the homeowner's liability protection (we also have umbrella coverage) even if we didn't insure to cover the cost of the house replacement. Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be.

But yes, people should look at overall cost of their insurance.

smitcat
Posts: 4044
Joined: Mon Nov 07, 2016 10:51 am

Re: Long term care insurance [looking for information]

Post by smitcat » Mon Oct 07, 2019 4:05 pm

TN_Boy wrote:
Mon Oct 07, 2019 11:56 am
smitcat wrote:
Mon Oct 07, 2019 8:50 am
snip
Interesting results would likely occur if you applied generally similar guidelines on other insurances...like home insurance for example.
In fact, we've had more than one thread from people considering dropping their homeowners once the mortgage was paid off. We could afford to replace our house out of pocket if it burned down. Rather not ... but could afford it. You also have to look at how easy it is in retirement to pull out a large lump sum, or get a mortgage for the replacement, etc. That is, you have to pay for the house to be rebuilt, plus living somewhere else for a while, and if you pulled out a big lump sum you might take a large tax hit, etc ... the costs are higher than simply the assessed value of your house, should you have to rebuild.

However, it's slightly more complex than that. I'd still want the homeowner's liability protection (we also have umbrella coverage) even if we didn't insure to cover the cost of the house replacement. Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be.

But yes, people should look at overall cost of their insurance.
"Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be."
FWIW our current LTCi policy is about the same as our home policy.
We have paid our home policy for about 35 years with no claims, we have paid out LTCi for about 11 with one claim.

TN_Boy
Posts: 1130
Joined: Sat Jan 17, 2009 12:51 pm

Re: Long term care insurance [looking for information]

Post by TN_Boy » Mon Oct 07, 2019 6:12 pm

smitcat wrote:
Mon Oct 07, 2019 4:05 pm
TN_Boy wrote:
Mon Oct 07, 2019 11:56 am
smitcat wrote:
Mon Oct 07, 2019 8:50 am
snip
Interesting results would likely occur if you applied generally similar guidelines on other insurances...like home insurance for example.
In fact, we've had more than one thread from people considering dropping their homeowners once the mortgage was paid off. We could afford to replace our house out of pocket if it burned down. Rather not ... but could afford it. You also have to look at how easy it is in retirement to pull out a large lump sum, or get a mortgage for the replacement, etc. That is, you have to pay for the house to be rebuilt, plus living somewhere else for a while, and if you pulled out a big lump sum you might take a large tax hit, etc ... the costs are higher than simply the assessed value of your house, should you have to rebuild.

However, it's slightly more complex than that. I'd still want the homeowner's liability protection (we also have umbrella coverage) even if we didn't insure to cover the cost of the house replacement. Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be.

But yes, people should look at overall cost of their insurance.
"Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be."
FWIW our current LTCi policy is about the same as our home policy.
We have paid our home policy for about 35 years with no claims, we have paid out LTCi for about 11 with one claim.
My homeowners insurance is about $900 a year. How much LTC insurance you reckon that will buy for a couple?

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willthrill81
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Re: Long term care insurance [looking for information]

Post by willthrill81 » Mon Oct 07, 2019 7:04 pm

TN_Boy wrote:
Mon Oct 07, 2019 6:12 pm
smitcat wrote:
Mon Oct 07, 2019 4:05 pm
TN_Boy wrote:
Mon Oct 07, 2019 11:56 am
smitcat wrote:
Mon Oct 07, 2019 8:50 am
snip
Interesting results would likely occur if you applied generally similar guidelines on other insurances...like home insurance for example.
In fact, we've had more than one thread from people considering dropping their homeowners once the mortgage was paid off. We could afford to replace our house out of pocket if it burned down. Rather not ... but could afford it. You also have to look at how easy it is in retirement to pull out a large lump sum, or get a mortgage for the replacement, etc. That is, you have to pay for the house to be rebuilt, plus living somewhere else for a while, and if you pulled out a big lump sum you might take a large tax hit, etc ... the costs are higher than simply the assessed value of your house, should you have to rebuild.

However, it's slightly more complex than that. I'd still want the homeowner's liability protection (we also have umbrella coverage) even if we didn't insure to cover the cost of the house replacement. Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be.

But yes, people should look at overall cost of their insurance.
"Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be."
FWIW our current LTCi policy is about the same as our home policy.
We have paid our home policy for about 35 years with no claims, we have paid out LTCi for about 11 with one claim.
My homeowners insurance is about $900 a year. How much LTC insurance you reckon that will buy for a couple?
In my state (WA), a Genworth policy with a $100 daily maximum benefit (i.e. $36,500 annually) for an opposite-sex couple aged 55 with a maximum benefit period of 5 years would be $931.50. If that doesn't sound like much benefit, that's because it isn't.
“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

smitcat
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Re: Long term care insurance [looking for information]

Post by smitcat » Mon Oct 07, 2019 7:32 pm

willthrill81 wrote:
Mon Oct 07, 2019 7:04 pm
TN_Boy wrote:
Mon Oct 07, 2019 6:12 pm
smitcat wrote:
Mon Oct 07, 2019 4:05 pm
TN_Boy wrote:
Mon Oct 07, 2019 11:56 am
smitcat wrote:
Mon Oct 07, 2019 8:50 am
snip
Interesting results would likely occur if you applied generally similar guidelines on other insurances...like home insurance for example.
In fact, we've had more than one thread from people considering dropping their homeowners once the mortgage was paid off. We could afford to replace our house out of pocket if it burned down. Rather not ... but could afford it. You also have to look at how easy it is in retirement to pull out a large lump sum, or get a mortgage for the replacement, etc. That is, you have to pay for the house to be rebuilt, plus living somewhere else for a while, and if you pulled out a big lump sum you might take a large tax hit, etc ... the costs are higher than simply the assessed value of your house, should you have to rebuild.

However, it's slightly more complex than that. I'd still want the homeowner's liability protection (we also have umbrella coverage) even if we didn't insure to cover the cost of the house replacement. Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be.

But yes, people should look at overall cost of their insurance.
"Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be."
FWIW our current LTCi policy is about the same as our home policy.
We have paid our home policy for about 35 years with no claims, we have paid out LTCi for about 11 with one claim.
My homeowners insurance is about $900 a year. How much LTC insurance you reckon that will buy for a couple?
In my state (WA), a Genworth policy with a $100 daily maximum benefit (i.e. $36,500 annually) for an opposite-sex couple aged 55 with a maximum benefit period of 5 years would be $931.50. If that doesn't sound like much benefit, that's because it isn't.
So does that say you get about $182.5K max for $931.50 annually per person?

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Re: Long term care insurance [looking for information]

Post by willthrill81 » Mon Oct 07, 2019 7:37 pm

smitcat wrote:
Mon Oct 07, 2019 7:32 pm
willthrill81 wrote:
Mon Oct 07, 2019 7:04 pm
TN_Boy wrote:
Mon Oct 07, 2019 6:12 pm
smitcat wrote:
Mon Oct 07, 2019 4:05 pm
TN_Boy wrote:
Mon Oct 07, 2019 11:56 am


In fact, we've had more than one thread from people considering dropping their homeowners once the mortgage was paid off. We could afford to replace our house out of pocket if it burned down. Rather not ... but could afford it. You also have to look at how easy it is in retirement to pull out a large lump sum, or get a mortgage for the replacement, etc. That is, you have to pay for the house to be rebuilt, plus living somewhere else for a while, and if you pulled out a big lump sum you might take a large tax hit, etc ... the costs are higher than simply the assessed value of your house, should you have to rebuild.

However, it's slightly more complex than that. I'd still want the homeowner's liability protection (we also have umbrella coverage) even if we didn't insure to cover the cost of the house replacement. Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be.

But yes, people should look at overall cost of their insurance.
"Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be."
FWIW our current LTCi policy is about the same as our home policy.
We have paid our home policy for about 35 years with no claims, we have paid out LTCi for about 11 with one claim.
My homeowners insurance is about $900 a year. How much LTC insurance you reckon that will buy for a couple?
In my state (WA), a Genworth policy with a $100 daily maximum benefit (i.e. $36,500 annually) for an opposite-sex couple aged 55 with a maximum benefit period of 5 years would be $931.50. If that doesn't sound like much benefit, that's because it isn't.
So does that say you get about $182.5K max for $931.50 annually per person?
Yes, that's $931.50 per person in the couple, $1,863 annually for both. For a single 55 year old male, it would be $1,138.50 for the same policy, and $1,630.93 for a single 55 year old female.
“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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Re: Long term care insurance [looking for information]

Post by TheDDC » Mon Oct 07, 2019 7:42 pm

LTCi policies are really money wasted, and you will always gladly find someone who is more than glad to take your money! Instead of sending it to your friendly insurance salesman, could you consider sending to me instead? :D

If you are really that obsessed with the almightly tail risk then buy a "life care" type policy at CCRC for about 50k each and enjoy the amenities and your new friends! If not, just cash flow the risk it like, well, normal. Also, consider the services of an elder law attorney who has a proven track record of sheltering assets to keep in the family.

Also retain the services of a good PI attorney in case of "medical risk"/malpractice which greatly increases when one turns 70. Also make sure your kids are trained in the art of being a bulldog when it comes to advocating on your behalf.

-TheDDC
Refreshingly, a double barrel shotgun blast of truth...

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Re: Long term care insurance [looking for information]

Post by TN_Boy » Mon Oct 07, 2019 9:37 pm

willthrill81 wrote:
Mon Oct 07, 2019 7:37 pm
smitcat wrote:
Mon Oct 07, 2019 7:32 pm
willthrill81 wrote:
Mon Oct 07, 2019 7:04 pm
TN_Boy wrote:
Mon Oct 07, 2019 6:12 pm
smitcat wrote:
Mon Oct 07, 2019 4:05 pm


"Plus the homeowners is lot less expensive (for our house in our area) than a really good LTC policy would be."
FWIW our current LTCi policy is about the same as our home policy.
We have paid our home policy for about 35 years with no claims, we have paid out LTCi for about 11 with one claim.
My homeowners insurance is about $900 a year. How much LTC insurance you reckon that will buy for a couple?
In my state (WA), a Genworth policy with a $100 daily maximum benefit (i.e. $36,500 annually) for an opposite-sex couple aged 55 with a maximum benefit period of 5 years would be $931.50. If that doesn't sound like much benefit, that's because it isn't.
So does that say you get about $182.5K max for $931.50 annually per person?
Yes, that's $931.50 per person in the couple, $1,863 annually for both. For a single 55 year old male, it would be $1,138.50 for the same policy, and $1,630.93 for a single 55 year old female.
Just to close the loop, bump the daily benefit up to $300 (to cover skilled nursing costs) for five years and the costs start looking more like $6,000/year for a couple. It looks like this is with the 90 day exclusion period and *no* inflation adjustment.

Of course you can get quotes from an insurance broker and it wouldn't surprise me if there were at least somewhat better deals available.

As I said, my homeowner's insurance is a lot cheaper.

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Re: Long term care insurance [looking for information]

Post by krafty81 » Mon Oct 07, 2019 10:18 pm

I have two comments on LTCi.

My parents are both using their CNA LTCi policies now. Very easy to file and execute. One in skilled nursing and one going to assisted living. Very glad my Dad got the policy as costs are nearly 200 per day here in CA.

I have LTCi and sleep well at night. I researched for three years before pulling the string. Take a look at company ratings, amount of complaints in your state, cost and medical exam requirements. I used a broker which helped.

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willthrill81
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Re: Long term care insurance [looking for information]

Post by willthrill81 » Mon Oct 07, 2019 10:27 pm

krafty81 wrote:
Mon Oct 07, 2019 10:18 pm
I have two comments on LTCi.

My parents are both using their CNA LTCi policies now. Very easy to file and execute. One in skilled nursing and one going to assisted living. Very glad my Dad got the policy as costs are nearly 200 per day here in CA.

I have LTCi and sleep well at night. I researched for three years before pulling the string. Take a look at company ratings, amount of complaints in your state, cost and medical exam requirements. I used a broker which helped.
While I have a bit of a reputation around here for eschewing LTCi, I have always said that there are situations where it makes financial sense. But many people just feel better with it as opposed to relying on other means, and the emotional value of that should not be discounted too much. There's a lot of value in sleeping well at night.
“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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Re: Long term care insurance [looking for information]

Post by abuss368 » Mon Oct 07, 2019 10:39 pm

If you sleep well at night then you have done the right thing.
John C. Bogle: "Simplicity is the master key to financial success."

smitcat
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Re: Long term care insurance [looking for information]

Post by smitcat » Tue Oct 08, 2019 6:39 am

TN_Boy wrote:
Mon Oct 07, 2019 9:37 pm
willthrill81 wrote:
Mon Oct 07, 2019 7:37 pm
smitcat wrote:
Mon Oct 07, 2019 7:32 pm
willthrill81 wrote:
Mon Oct 07, 2019 7:04 pm
TN_Boy wrote:
Mon Oct 07, 2019 6:12 pm


My homeowners insurance is about $900 a year. How much LTC insurance you reckon that will buy for a couple?
In my state (WA), a Genworth policy with a $100 daily maximum benefit (i.e. $36,500 annually) for an opposite-sex couple aged 55 with a maximum benefit period of 5 years would be $931.50. If that doesn't sound like much benefit, that's because it isn't.
So does that say you get about $182.5K max for $931.50 annually per person?
Yes, that's $931.50 per person in the couple, $1,863 annually for both. For a single 55 year old male, it would be $1,138.50 for the same policy, and $1,630.93 for a single 55 year old female.
Just to close the loop, bump the daily benefit up to $300 (to cover skilled nursing costs) for five years and the costs start looking more like $6,000/year for a couple. It looks like this is with the 90 day exclusion period and *no* inflation adjustment.

Of course you can get quotes from an insurance broker and it wouldn't surprise me if there were at least somewhat better deals available.

As I said, my homeowner's insurance is a lot cheaper.
"Of course you can get quotes from an insurance broker and it wouldn't surprise me if there were at least somewhat better deals available."
I have no idea if better deals are available now, I can assure you that much better deals were available in the past but that serves no purpose for folks looking at this time.

"As I said, my homeowner's insurance is a lot cheaper."
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.

Mr.BB
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Re: Long term care insurance [looking for information]

Post by Mr.BB » Tue Oct 08, 2019 7:23 am

We had a long discussion on this topic here (you will find numerous threads on this). We got all different points of views on it which actually really was very helpful whether I agree with them or not. What it really came down to is the final numbers.

What is the coverage (total payout of the insurance) for the next 5-10 years for you and your spouse, and what is the number for the next 25 years? The bottom line is can you absorb the cost usually about $200 225,000 over the next 10 years. And do you think you'll have about half a million that the insurance would have covered in the next 25 years? (Depending on the level of policy you choose).
We plan to pay ourselves the premiums and of course it obviously won't do much the first 10 years but if we end up continuing to pay ourselves like we would have had to pay into the plan in 20-25 years it will probably of covered at least 40% of what the plan would have covered in the future. And there's also the unknown.
They show you what the monthly rates currently are and in 25 years; however that does not take in any rate increases that might occur. Also if you do choose to do the insurance make sure you get an inflation Ryder with it, otherwise in 20 years, value of your policy won't be much.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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Re: Long term care insurance [looking for information]

Post by TN_Boy » Tue Oct 08, 2019 7:54 am

smitcat wrote:
Tue Oct 08, 2019 6:39 am
TN_Boy wrote:
Mon Oct 07, 2019 9:37 pm
willthrill81 wrote:
Mon Oct 07, 2019 7:37 pm
smitcat wrote:
Mon Oct 07, 2019 7:32 pm
willthrill81 wrote:
Mon Oct 07, 2019 7:04 pm


In my state (WA), a Genworth policy with a $100 daily maximum benefit (i.e. $36,500 annually) for an opposite-sex couple aged 55 with a maximum benefit period of 5 years would be $931.50. If that doesn't sound like much benefit, that's because it isn't.
So does that say you get about $182.5K max for $931.50 annually per person?
Yes, that's $931.50 per person in the couple, $1,863 annually for both. For a single 55 year old male, it would be $1,138.50 for the same policy, and $1,630.93 for a single 55 year old female.
Just to close the loop, bump the daily benefit up to $300 (to cover skilled nursing costs) for five years and the costs start looking more like $6,000/year for a couple. It looks like this is with the 90 day exclusion period and *no* inflation adjustment.

Of course you can get quotes from an insurance broker and it wouldn't surprise me if there were at least somewhat better deals available.

As I said, my homeowner's insurance is a lot cheaper.
"Of course you can get quotes from an insurance broker and it wouldn't surprise me if there were at least somewhat better deals available."
I have no idea if better deals are available now, I can assure you that much better deals were available in the past but that serves no purpose for folks looking at this time.

"As I said, my homeowner's insurance is a lot cheaper."
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.
I live in a MCOL of living area. Our is house is not huge, but it's not tiny either, and the location is very good.

My larger point was that I believe for most people not living in big homes in HCOL areas, decent LTC insurance would be a lot more than homeowners. I'm glad we have some current numbers on the table for people to chew on.

TN_Boy
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Re: Long term care insurance [looking for information]

Post by TN_Boy » Tue Oct 08, 2019 8:02 am

abuss368 wrote:
Mon Oct 07, 2019 10:39 pm
If you sleep well at night then you have done the right thing.
I think we overuse that phrase here "if you sleep well at night you've done the right thing*" but for LTC insurance that is almost certainly true. If somebody feels that they can spend $4k to $6k a year (for many years I will repeat ....) to mitigate the risk of a disastrous long term stay, well, that money is perhaps well spent. One should think long and hard about that purchase, but it is unlikely to cause a disaster.

* we do have posters that want to get out of the market entirely, go to an all fixed income portfolio even when they might need growth, etc ... those actions might make a person sleep well at night, but are almost certainly objectively wrong.

smitcat
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Re: Long term care insurance [looking for information]

Post by smitcat » Tue Oct 08, 2019 8:14 am

TN_Boy wrote:
Tue Oct 08, 2019 7:54 am
smitcat wrote:
Tue Oct 08, 2019 6:39 am
TN_Boy wrote:
Mon Oct 07, 2019 9:37 pm
willthrill81 wrote:
Mon Oct 07, 2019 7:37 pm
smitcat wrote:
Mon Oct 07, 2019 7:32 pm


So does that say you get about $182.5K max for $931.50 annually per person?
Yes, that's $931.50 per person in the couple, $1,863 annually for both. For a single 55 year old male, it would be $1,138.50 for the same policy, and $1,630.93 for a single 55 year old female.
Just to close the loop, bump the daily benefit up to $300 (to cover skilled nursing costs) for five years and the costs start looking more like $6,000/year for a couple. It looks like this is with the 90 day exclusion period and *no* inflation adjustment.

Of course you can get quotes from an insurance broker and it wouldn't surprise me if there were at least somewhat better deals available.

As I said, my homeowner's insurance is a lot cheaper.
"Of course you can get quotes from an insurance broker and it wouldn't surprise me if there were at least somewhat better deals available."
I have no idea if better deals are available now, I can assure you that much better deals were available in the past but that serves no purpose for folks looking at this time.

"As I said, my homeowner's insurance is a lot cheaper."
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.
I live in a MCOL of living area. Our is house is not huge, but it's not tiny either, and the location is very good.

My larger point was that I believe for most people not living in big homes in HCOL areas, decent LTC insurance would be a lot more than homeowners. I'm glad we have some current numbers on the table for people to chew on.
We do not have a large home either - but when utilizing the detailed worksheets for coverage we always found that the real costs to remove debris, site prep and rebuild to the current codes to be more expensive than most would gather. That plus the coverage we choose to be able to also maintain a decent umbrella policy costs much more than $900/yr.
On the other hand our LTCi rates are much better than posted here and our OOP expenses after deductions make them even more palatable.

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Re: Long term care insurance [looking for information]

Post by Silk McCue » Tue Oct 08, 2019 8:19 am

TN_Boy wrote:
Tue Oct 08, 2019 8:02 am
abuss368 wrote:
Mon Oct 07, 2019 10:39 pm
If you sleep well at night then you have done the right thing.
I think we overuse that phrase here "if you sleep well at night you've done the right thing*" but for LTC insurance that is almost certainly true. If somebody feels that they can spend $4k to $6k a year (for many years I will repeat ....) to mitigate the risk of a disastrous long term stay, well, that money is perhaps well spent. One should think long and hard about that purchase, but it is unlikely to cause a disaster.

* we do have posters that want to get out of the market entirely, go to an all fixed income portfolio even when they might need growth, etc ... those actions might make a person sleep well at night, but are almost certainly objectively wrong.
There is no need to refute every point made that is in conflict with your strong opposition to LTCi.

As the former owner of a private duty home health agency providing care to the elderly in their homes, or wherever they resided, I can tell you how critical these policies are for those that had them and the stress and strain, financially and physically, on those that did not. I've seen the exhausted spouse,the overwhelmed adult children, and the needs not being properly met for those that required the help.

Cheers

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Watty
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Re: Long term care insurance [looking for information]

Post by Watty » Tue Oct 08, 2019 9:05 am

Silk McCue wrote:
Sat Oct 05, 2019 8:55 pm
LTCi is a very contentious subject here. I’m a believer.
Yikes, already a lot of wildly varying responses to a simple request for a good source to read up on it.

One of the reasons that there are so many different points of view are that the cost of LTC varies a lot by where you live. Here is a website where you can see what the current costs typically are where you live.

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

I happen to live in an area where it is a lot lower than average so it is a lot less of a concern for me than many other people.

It is also very important to distinguish between the different levels of LTC. Assisted living is a LOT less expensive than full Nursing care.

It is important to remember than most of your other costs will stop when you go into long term care so that you really need to be concerned about the gap between your normal retirement budget and what it would cost to live in long term care.

For me the biggest risk is that LTC might be needed while my wife and I are both still alive and the other costs would not decrease much if one of us went into LTC.

My Mom outlived my Dad and she always said that her paid off house was her LTC insurance policy. She made sure that my siblings and I had the paperwork to sell her house if needed and we had instructions to sell it and and put her in the best place possible. She did not live a terribly expensive house but along with her normal retirement budget her numbers were sound even though she never needed LTC.

Between having a paid off house and living in an area where LTC costs are lower I decided not to buy LTC insurance. I was also very concerned that I could pay into a LTC policy for years but then have them raise the rates a lot.

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Re: Long term care insurance [looking for information]

Post by willthrill81 » Tue Oct 08, 2019 10:18 am

smitcat wrote:
Tue Oct 08, 2019 6:39 am
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.
I don't know how the thread morphed into a discussion of homeowners insurance, but we pay about $400 for it for our $300k home. Living in an area with virtually no natural disasters is a big plus in many regards. We have family in hurricane and tornado country, and they pay at least 4x what we do in relation to property values.
“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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Re: Long term care insurance [looking for information]

Post by willthrill81 » Tue Oct 08, 2019 10:28 am

Watty wrote:
Tue Oct 08, 2019 9:05 am
It is also very important to distinguish between the different levels of LTC. Assisted living is a LOT less expensive than full Nursing care.
Good point. Assisted living is much more common than nursing home care as well. In our area, AL often runs about $30-$40k vs. $100k for nursing home care.
Watty wrote:
Tue Oct 08, 2019 9:05 am
It is important to remember than most of your other costs will stop when you go into long term care so that you really need to be concerned about the gap between your normal retirement budget and what it would cost to live in long term care.
That would certainly be the case for us. At least half of our anticipated retirement spending will be on discretionary items that would largely, if not entirely cease as soon as either my DW or myself needed LTC. We could very likely cover assisted living expenses without changing our portfolio withdrawals at all.
Watty wrote:
Tue Oct 08, 2019 9:05 am
My Mom outlived my Dad and she always said that her paid off house was her LTC insurance policy. She made sure that my siblings and I had the paperwork to sell her house if needed and we had instructions to sell it and and put her in the best place possible. She did not live a terribly expensive house but along with her normal retirement budget her numbers were sound even though she never needed LTC.

Between having a paid off house and living in an area where LTC costs are lower I decided not to buy LTC insurance. I was also very concerned that I could pay into a LTC policy for years but then have them raise the rates a lot.
That sounds very reasonable to me.

LTCi is certainly not a one-size-fits-all tool. Those with relatively few assets usually can't afford it, and those with significant assets don't need it. Those in the middle may need one, but many factors come into play.
“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

smitcat
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Re: Long term care insurance [looking for information]

Post by smitcat » Tue Oct 08, 2019 10:35 am

willthrill81 wrote:
Tue Oct 08, 2019 10:18 am
smitcat wrote:
Tue Oct 08, 2019 6:39 am
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.
I don't know how the thread morphed into a discussion of homeowners insurance, but we pay about $400 for it for our $300k home. Living in an area with virtually no natural disasters is a big plus in many regards. We have family in hurricane and tornado country, and they pay at least 4x what we do in relation to property values.
That is great as long as it fully covers cleanup, site prep and reconstruction.
You do not need to insure the 'land' only the structure.
Perhaps you do not currently have a liability umbrella policy either?

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willthrill81
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Re: Long term care insurance [looking for information]

Post by willthrill81 » Tue Oct 08, 2019 11:11 am

smitcat wrote:
Tue Oct 08, 2019 10:35 am
willthrill81 wrote:
Tue Oct 08, 2019 10:18 am
smitcat wrote:
Tue Oct 08, 2019 6:39 am
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.
I don't know how the thread morphed into a discussion of homeowners insurance, but we pay about $400 for it for our $300k home. Living in an area with virtually no natural disasters is a big plus in many regards. We have family in hurricane and tornado country, and they pay at least 4x what we do in relation to property values.
That is great as long as it fully covers cleanup, site prep and reconstruction.
You do not need to insure the 'land' only the structure.
Perhaps you do not currently have a liability umbrella policy either?
Yes, all of that is covered as well as six months of relocation expenses while the structure is rebuilt.

We do not have an umbrella policy because our home is the only asset to speak of that can be touched by creditors, and almost half of its value is protected by our state's law. Everything else is in ERISA accounts or IRAs that are protected to the same extent by our state's law. So we're pretty close to judgment proof.
“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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friar1610
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Joined: Sat Nov 29, 2008 9:52 pm
Location: MA South Shore

Re: Long term care insurance [looking for information]

Post by friar1610 » Tue Oct 08, 2019 11:23 am

Small Savanna wrote:
Sat Oct 05, 2019 10:45 pm

I bought into the Federal employee long term care insurance program at age 50; I'm 59 now. Although the premiums aren't subsidized, they still seem to be very reasonably priced. Rates are a function of age when you enroll and benefits you select. The program is open not only to federal employees but also to their spouses, children, and parents, so if you have a Fed in your family it is worth checking into. Even if you aren't eligible, the rates may be a good benchmark for other providers.
Just want to point out that retired military and their spouses are also eligible. That was my basis for eligibility.
Friar1610

RudyS
Posts: 1581
Joined: Tue Oct 27, 2015 10:11 am

Re: Long term care insurance [looking for information]

Post by RudyS » Tue Oct 08, 2019 12:51 pm

TheDDC wrote:
Mon Oct 07, 2019 7:42 pm
LTCi policies are really money wasted, and you will always gladly find someone who is more than glad to take your money! Instead of sending it to your friendly insurance salesman, could you consider sending to me instead? :D

If you are really that obsessed with the almightly tail risk then buy a "life care" type policy at CCRC for about 50k each and enjoy the amenities and your new friends! If not, just cash flow the risk it like, well, normal. Also, consider the services of an elder law attorney who has a proven track record of sheltering assets to keep in the family.

Also retain the services of a good PI attorney in case of "medical risk"/malpractice which greatly increases when one turns 70. Also make sure your kids are trained in the art of being a bulldog when it comes to advocating on your behalf.

-TheDDC
The suggestion to consider a CCRC (continuing care retirement community) as an alternative is excellent. But such a move typically happens when a couple is in the 70's, but would need to still be in "good health" to qualify to sign on. We did just that, and enjoy life here and figure the price we paid/pay is a good alternative to conventional LTC insurance. But the cost is much more than $50K each to buy in. Depending on location and type of apartment, buy-in could cost $20K - $30K per person, and the monthly fee could run $5K - $7K for a couple.

TN_Boy
Posts: 1130
Joined: Sat Jan 17, 2009 12:51 pm

Re: Long term care insurance [looking for information]

Post by TN_Boy » Tue Oct 08, 2019 2:06 pm

Silk McCue wrote:
Tue Oct 08, 2019 8:19 am
TN_Boy wrote:
Tue Oct 08, 2019 8:02 am
abuss368 wrote:
Mon Oct 07, 2019 10:39 pm
If you sleep well at night then you have done the right thing.
I think we overuse that phrase here "if you sleep well at night you've done the right thing*" but for LTC insurance that is almost certainly true. If somebody feels that they can spend $4k to $6k a year (for many years I will repeat ....) to mitigate the risk of a disastrous long term stay, well, that money is perhaps well spent. One should think long and hard about that purchase, but it is unlikely to cause a disaster.

* we do have posters that want to get out of the market entirely, go to an all fixed income portfolio even when they might need growth, etc ... those actions might make a person sleep well at night, but are almost certainly objectively wrong.
There is no need to refute every point made that is in conflict with your strong opposition to LTCi.

As the former owner of a private duty home health agency providing care to the elderly in their homes, or wherever they resided, I can tell you how critical these policies are for those that had them and the stress and strain, financially and physically, on those that did not. I've seen the exhausted spouse,the overwhelmed adult children, and the needs not being properly met for those that required the help.

Cheers
I'm probably less opposed to LTCi than you think. My apologies if I'm expressing my opinion too abrasively. But my vexation, and frankly puzzlement, is what I perceive (rightly or or wrongly) as a tendency to focus on the emotional issues rather than doing the math and only then letting emotions dictate the final decision.

For example -- and you are probably going to get annoyed with me again -- your post emphasizes the emotional aspects of not being able to afford needed care. But, well, nobody in these threads thinks it is okay if you have no money for needed care. That's kind of a red herring. The issue under discussion is whether LTCi, as it exists today, is the right solution to address that potential problem for a given individual or couple.

A couple of questions for you.

How long ago did you own and run a private duty health agency? It's well understood -- I don't believe that is under debate -- that the cost/benefit ratio of LTCi is not as good as it used to be. Policies have gotten a lot more expensive.

I put down a list of above of things I believe a prospective buyer of LTCi should do. Do you disagree with those suggestions? It seems to me that anyone doing those things should have a good idea of just how expensive LTC can be, along with a decent picture of how much the insurance will cost.

TN_Boy
Posts: 1130
Joined: Sat Jan 17, 2009 12:51 pm

Re: Long term care insurance [looking for information]

Post by TN_Boy » Tue Oct 08, 2019 2:10 pm

smitcat wrote:
Tue Oct 08, 2019 10:35 am
willthrill81 wrote:
Tue Oct 08, 2019 10:18 am
smitcat wrote:
Tue Oct 08, 2019 6:39 am
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.
I don't know how the thread morphed into a discussion of homeowners insurance, but we pay about $400 for it for our $300k home. Living in an area with virtually no natural disasters is a big plus in many regards. We have family in hurricane and tornado country, and they pay at least 4x what we do in relation to property values.
That is great as long as it fully covers cleanup, site prep and reconstruction.
You do not need to insure the 'land' only the structure.
Perhaps you do not currently have a liability umbrella policy either?
I'm not sure I'd lump in umbrella with homeowners policy. I'd have an umbrella policy if we rented an apartment (well, I'd have renters insurance in that case). I think we pay about $250 for umbrella, and we also had to up the liability coverage on our auto policy.

User avatar
willthrill81
Posts: 13225
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Long term care insurance [looking for information]

Post by willthrill81 » Tue Oct 08, 2019 2:38 pm

TN_Boy wrote:
Tue Oct 08, 2019 2:06 pm
Silk McCue wrote:
Tue Oct 08, 2019 8:19 am
TN_Boy wrote:
Tue Oct 08, 2019 8:02 am
abuss368 wrote:
Mon Oct 07, 2019 10:39 pm
If you sleep well at night then you have done the right thing.
I think we overuse that phrase here "if you sleep well at night you've done the right thing*" but for LTC insurance that is almost certainly true. If somebody feels that they can spend $4k to $6k a year (for many years I will repeat ....) to mitigate the risk of a disastrous long term stay, well, that money is perhaps well spent. One should think long and hard about that purchase, but it is unlikely to cause a disaster.

* we do have posters that want to get out of the market entirely, go to an all fixed income portfolio even when they might need growth, etc ... those actions might make a person sleep well at night, but are almost certainly objectively wrong.
There is no need to refute every point made that is in conflict with your strong opposition to LTCi.

As the former owner of a private duty home health agency providing care to the elderly in their homes, or wherever they resided, I can tell you how critical these policies are for those that had them and the stress and strain, financially and physically, on those that did not. I've seen the exhausted spouse,the overwhelmed adult children, and the needs not being properly met for those that required the help.

Cheers
I'm probably less opposed to LTCi than you think. My apologies if I'm expressing my opinion too abrasively. But my vexation, and frankly puzzlement, is what I perceive (rightly or or wrongly) as a tendency to focus on the emotional issues rather than doing the math and only then letting emotions dictate the final decision.

For example -- and you are probably going to get annoyed with me again -- your post emphasizes the emotional aspects of not being able to afford needed care. But, well, nobody in these threads thinks it is okay if you have no money for needed care. That's kind of a red herring. The issue under discussion is whether LTCi, as it exists today, is the right solution to address that potential problem for a given individual or couple.
I've had similar issues myself. While I do believe that there is something to be said for doing what let's you sleep well at night, this needs to be balanced with rationality and informed views. At the extreme, sleeping well at night because one is unaware of the risks one faces is not a place that we would recommend that anyone be in.

Some of the more ridiculous arguments for LTCi that we've seen in prior threads on this topic include "Are you okay with your wife spending $500k caring for you and only leaving her with $1.5 million" and "not having to write checks to pay for LTC was a great boon for a client of mine."

Most retirees don't need LTC because they will be forced to rely on Medicaid for LTC expenses. Retirees with ~$2 million or more in their portfolios can likely self-insure the risk. Those in the middle might be well-served with LTC.
TN_Boy wrote:
Tue Oct 08, 2019 2:10 pm
smitcat wrote:
Tue Oct 08, 2019 10:35 am
willthrill81 wrote:
Tue Oct 08, 2019 10:18 am
smitcat wrote:
Tue Oct 08, 2019 6:39 am
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.
I don't know how the thread morphed into a discussion of homeowners insurance, but we pay about $400 for it for our $300k home. Living in an area with virtually no natural disasters is a big plus in many regards. We have family in hurricane and tornado country, and they pay at least 4x what we do in relation to property values.
That is great as long as it fully covers cleanup, site prep and reconstruction.
You do not need to insure the 'land' only the structure.
Perhaps you do not currently have a liability umbrella policy either?
I'm not sure I'd lump in umbrella with homeowners policy. I'd have an umbrella policy if we rented an apartment (well, I'd have renters insurance in that case). I think we pay about $250 for umbrella, and we also had to up the liability coverage on our auto policy.
As I noted above, we're close to judgment proof and plan on keeping it that way, shoveling virtually all of our savings into accounts that are protected by federal and/or state law from creditors. We have significant liability protection on both our home and auto policies that would cover the relatively small amount of our assets that are not otherwise protected.
Last edited by willthrill81 on Tue Oct 08, 2019 2:46 pm, edited 1 time in total.
“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

smitcat
Posts: 4044
Joined: Mon Nov 07, 2016 10:51 am

Re: Long term care insurance [looking for information]

Post by smitcat » Tue Oct 08, 2019 2:44 pm

TN_Boy wrote:
Tue Oct 08, 2019 2:10 pm
smitcat wrote:
Tue Oct 08, 2019 10:35 am
willthrill81 wrote:
Tue Oct 08, 2019 10:18 am
smitcat wrote:
Tue Oct 08, 2019 6:39 am
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.
I don't know how the thread morphed into a discussion of homeowners insurance, but we pay about $400 for it for our $300k home. Living in an area with virtually no natural disasters is a big plus in many regards. We have family in hurricane and tornado country, and they pay at least 4x what we do in relation to property values.
That is great as long as it fully covers cleanup, site prep and reconstruction.
You do not need to insure the 'land' only the structure.
Perhaps you do not currently have a liability umbrella policy either?
I'm not sure I'd lump in umbrella with homeowners policy. I'd have an umbrella policy if we rented an apartment (well, I'd have renters insurance in that case). I think we pay about $250 for umbrella, and we also had to up the liability coverage on our auto policy.
An umbrella policy requires a specific amount of homeowners insurance and/or auto policy.

smitcat
Posts: 4044
Joined: Mon Nov 07, 2016 10:51 am

Re: Long term care insurance [looking for information]

Post by smitcat » Tue Oct 08, 2019 2:46 pm

willthrill81 wrote:
Tue Oct 08, 2019 11:11 am
smitcat wrote:
Tue Oct 08, 2019 10:35 am
willthrill81 wrote:
Tue Oct 08, 2019 10:18 am
smitcat wrote:
Tue Oct 08, 2019 6:39 am
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.
I don't know how the thread morphed into a discussion of homeowners insurance, but we pay about $400 for it for our $300k home. Living in an area with virtually no natural disasters is a big plus in many regards. We have family in hurricane and tornado country, and they pay at least 4x what we do in relation to property values.
That is great as long as it fully covers cleanup, site prep and reconstruction.
You do not need to insure the 'land' only the structure.
Perhaps you do not currently have a liability umbrella policy either?
Yes, all of that is covered as well as six months of relocation expenses while the structure is rebuilt.

We do not have an umbrella policy because our home is the only asset to speak of that can be touched by creditors, and almost half of its value is protected by our state's law. Everything else is in ERISA accounts or IRAs that are protected to the same extent by our state's law. So we're pretty close to judgment proof.
Understood - the insurance as a % of the assets being covered makes much more sense than just the price alone.

smitcat
Posts: 4044
Joined: Mon Nov 07, 2016 10:51 am

Re: Long term care insurance [looking for information]

Post by smitcat » Tue Oct 08, 2019 2:48 pm

willthrill81 wrote:
Tue Oct 08, 2019 2:38 pm
TN_Boy wrote:
Tue Oct 08, 2019 2:06 pm
Silk McCue wrote:
Tue Oct 08, 2019 8:19 am
TN_Boy wrote:
Tue Oct 08, 2019 8:02 am
abuss368 wrote:
Mon Oct 07, 2019 10:39 pm
If you sleep well at night then you have done the right thing.
I think we overuse that phrase here "if you sleep well at night you've done the right thing*" but for LTC insurance that is almost certainly true. If somebody feels that they can spend $4k to $6k a year (for many years I will repeat ....) to mitigate the risk of a disastrous long term stay, well, that money is perhaps well spent. One should think long and hard about that purchase, but it is unlikely to cause a disaster.

* we do have posters that want to get out of the market entirely, go to an all fixed income portfolio even when they might need growth, etc ... those actions might make a person sleep well at night, but are almost certainly objectively wrong.
There is no need to refute every point made that is in conflict with your strong opposition to LTCi.

As the former owner of a private duty home health agency providing care to the elderly in their homes, or wherever they resided, I can tell you how critical these policies are for those that had them and the stress and strain, financially and physically, on those that did not. I've seen the exhausted spouse,the overwhelmed adult children, and the needs not being properly met for those that required the help.

Cheers
I'm probably less opposed to LTCi than you think. My apologies if I'm expressing my opinion too abrasively. But my vexation, and frankly puzzlement, is what I perceive (rightly or or wrongly) as a tendency to focus on the emotional issues rather than doing the math and only then letting emotions dictate the final decision.

For example -- and you are probably going to get annoyed with me again -- your post emphasizes the emotional aspects of not being able to afford needed care. But, well, nobody in these threads thinks it is okay if you have no money for needed care. That's kind of a red herring. The issue under discussion is whether LTCi, as it exists today, is the right solution to address that potential problem for a given individual or couple.
I've had similar issues myself. While I do believe that there is something to be said for doing what let's you sleep well at night, this needs to be balanced with rationality and informed views. At the extreme, sleeping well at night because one is unaware of the risks one faces is not a place that we would recommend that anyone be in.

Some of the more ridiculous arguments for LTCi that we've seen in prior threads on this topic include "Are you okay with your wife spending $500k caring for you and only leaving her with $1.5 million" and "not having to write checks to pay for LTC was a great boon for a client of mine."

Most retirees don't need LTC because they will be forced to rely on Medicaid for LTC expenses. Retirees with ~$2 million or more in their portfolios can likely self-insure the risk. Those in the middle might be well-served with LTC.
TN_Boy wrote:
Tue Oct 08, 2019 2:10 pm
smitcat wrote:
Tue Oct 08, 2019 10:35 am
willthrill81 wrote:
Tue Oct 08, 2019 10:18 am
smitcat wrote:
Tue Oct 08, 2019 6:39 am
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.
I don't know how the thread morphed into a discussion of homeowners insurance, but we pay about $400 for it for our $300k home. Living in an area with virtually no natural disasters is a big plus in many regards. We have family in hurricane and tornado country, and they pay at least 4x what we do in relation to property values.
That is great as long as it fully covers cleanup, site prep and reconstruction.
You do not need to insure the 'land' only the structure.
Perhaps you do not currently have a liability umbrella policy either?
I'm not sure I'd lump in umbrella with homeowners policy. I'd have an umbrella policy if we rented an apartment (well, I'd have renters insurance in that case). I think we pay about $250 for umbrella, and we also had to up the liability coverage on our auto policy.
As I noted above, we're close to judgment proof and plan on keeping it that way, shoveling virtually all of our savings into accounts that are protected by federal and/or state law from creditors. We have significant liability protection on both our home and auto policies that would cover the relatively small amount of our assets that are not otherwise protected.
"As I noted above, we're close to judgment proof and plan on keeping it that way, shoveling virtually all of our savings into accounts that are protected by federal and/or state law from creditors."
That makes sense - not possible for us.

TN_Boy
Posts: 1130
Joined: Sat Jan 17, 2009 12:51 pm

Re: Long term care insurance [looking for information]

Post by TN_Boy » Tue Oct 08, 2019 7:07 pm

smitcat wrote:
Tue Oct 08, 2019 2:44 pm
TN_Boy wrote:
Tue Oct 08, 2019 2:10 pm
smitcat wrote:
Tue Oct 08, 2019 10:35 am
willthrill81 wrote:
Tue Oct 08, 2019 10:18 am
smitcat wrote:
Tue Oct 08, 2019 6:39 am
I am glad you can secure home insurance at $900/yr - we are unable to get suitable home insurance anywhere near that rate where we live.
I don't know how the thread morphed into a discussion of homeowners insurance, but we pay about $400 for it for our $300k home. Living in an area with virtually no natural disasters is a big plus in many regards. We have family in hurricane and tornado country, and they pay at least 4x what we do in relation to property values.
That is great as long as it fully covers cleanup, site prep and reconstruction.
You do not need to insure the 'land' only the structure.
Perhaps you do not currently have a liability umbrella policy either?
I'm not sure I'd lump in umbrella with homeowners policy. I'd have an umbrella policy if we rented an apartment (well, I'd have renters insurance in that case). I think we pay about $250 for umbrella, and we also had to up the liability coverage on our auto policy.
An umbrella policy requires a specific amount of homeowners insurance and/or auto policy.
Well, we have the auto policy, even if we didn't have a homeowner's policy.

Unlike willthrill81 we are not "judgement proof."

Topic Author
chickevans9
Posts: 3
Joined: Sat Oct 05, 2019 8:17 pm

Re: Long term care insurance [looking for information]

Post by chickevans9 » Tue Oct 08, 2019 8:48 pm

Thank you all again. As I learn more (from the resources you pointed out), I will reread the thread. The debate within the thread should make more sense to me then. :happy

WoW2012
Posts: 584
Joined: Sun Dec 23, 2012 11:28 am

Re: Long term care insurance [looking for information]

Post by WoW2012 » Tue Oct 08, 2019 10:19 pm

TheDDC wrote:
Mon Oct 07, 2019 7:42 pm
LTCi policies are really money wasted, and you will always gladly find someone who is more than glad to take your money! Instead of sending it to your friendly insurance salesman, could you consider sending to me instead? :D

If you are really that obsessed with the almightly tail risk then buy a "life care" type policy at CCRC for about 50k each and enjoy the amenities and your new friends! If not, just cash flow the risk it like, well, normal. Also, consider the services of an elder law attorney who has a proven track record of sheltering assets to keep in the family.

Also retain the services of a good PI attorney in case of "medical risk"/malpractice which greatly increases when one turns 70. Also make sure your kids are trained in the art of being a bulldog when it comes to advocating on your behalf.

-TheDDC

CCRC for $50K per person? Double that...at least!
No attorney can shelter your retirement accounts.
My MIL paid about $35,000 in LTCi premiums and she's already received over $100K in benefits. And she still has about a quarter million left in her policy. (Not to mention the $100K we saved in capital gains by not having to sell her rental properties).

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