Should we purchase LTC insurance at age 40?

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JoeRetire
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Re: Should we purchase LTC insurance at age 40?

Post by JoeRetire »

MDfan wrote: Thu Oct 29, 2020 9:19 am I don't know. But, honestly, the policy we had (i think it paid $150/day with a max of three years) would probably not be sufficient if it happened tomorrow. We're pretty comfortable taking the risk that it won't happen tomorrow or any time soon. It's not like we didn't put a lot of thought into this. We just decided, after talking with our FA who we trust completely, to go without it.
So $160k isn't sufficient, thus you can save $4k per year. Of course other, more sufficient, policies are available, if that's the issue.

Good luck. For most, it will work out just fine (but of course that's why we buy any insurance).
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MDfan
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Re: Should we purchase LTC insurance at age 40?

Post by MDfan »

JoeRetire wrote: Thu Oct 29, 2020 9:21 am
MDfan wrote: Thu Oct 29, 2020 9:19 am I don't know. But, honestly, the policy we had (i think it paid $150/day with a max of three years) would probably not be sufficient if it happened tomorrow. We're pretty comfortable taking the risk that it won't happen tomorrow or any time soon. It's not like we didn't put a lot of thought into this. We just decided, after talking with our FA who we trust completely, to go without it.
So $160k isn't sufficient, thus you can save $4k per year. Of course other, more sufficient, policies are available, if that's the issue.

Good luck. For most, it will work out just fine (but of course that's why we buy any insurance).
Thanks for your comments. I understand what you're saying and it makes sense. When we got the policy, we reviewed many different types of policies with a LTC broker and that's the one that fit into our budget. I'm not sure there would be more "sufficient" policies for us but I'm certainly no LTC expert. That was also before we hired our FA who then basically convinced us it was not necessary and that made sense to us. Along with hearing some of the horror stories about hefty rate increases (like the federal LTC plan). Of course it's a gamble and we're ok with that. I completely understand that others feel differently about the risk.

I should add that of our 4 parents, only one of them needed any LTC and that was for a period of about 2 months. So we considered family history as well (obviously, that doesn't mean we won't need it for a longer period).
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JoeRetire
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Re: Should we purchase LTC insurance at age 40?

Post by JoeRetire »

MDfan wrote: Thu Oct 29, 2020 9:48 am Thanks for your comments. I understand what you're saying and it makes sense. When we got the policy, we reviewed many different types of policies with a LTC broker and that's the one that fit into our budget. I'm not sure there would be more "sufficient" policies for us but I'm certainly no LTC expert. That was also before we hired our FA who then basically convinced us it was not necessary and that made sense to us. Along with hearing some of the horror stories about hefty rate increases (like the federal LTC plan).
I don't know what a "federal LTC plan" is. But I assume your FA explained how the hefty rate increases have been for plans issued long ago, and not for recently-issued plans?

We purchased our plan about 7 years ago. No increases at all.
Of course it's a gamble and we're ok with that. I completely understand that others feel differently about the risk.
Yup. We all decide when and where to take our chances.
I should add that of our 4 parents, only one of them needed any LTC and that was for a period of about 2 months. So we considered family history as well (obviously, that doesn't mean we won't need it for a longer period).
Family history isn't really a great predictor of LTCi need.

Not trying to change your mind. I wish you well.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
MDfan
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Re: Should we purchase LTC insurance at age 40?

Post by MDfan »

JoeRetire wrote: Fri Oct 30, 2020 7:09 am
MDfan wrote: Thu Oct 29, 2020 9:48 am Thanks for your comments. I understand what you're saying and it makes sense. When we got the policy, we reviewed many different types of policies with a LTC broker and that's the one that fit into our budget. I'm not sure there would be more "sufficient" policies for us but I'm certainly no LTC expert. That was also before we hired our FA who then basically convinced us it was not necessary and that made sense to us. Along with hearing some of the horror stories about hefty rate increases (like the federal LTC plan).
I don't know what a "federal LTC plan" is. But I assume your FA explained how the hefty rate increases have been for plans issued long ago, and not for recently-issued plans?

We purchased our plan about 7 years ago. No increases at all.
Of course it's a gamble and we're ok with that. I completely understand that others feel differently about the risk.
Yup. We all decide when and where to take our chances.
I should add that of our 4 parents, only one of them needed any LTC and that was for a period of about 2 months. So we considered family history as well (obviously, that doesn't mean we won't need it for a longer period).
Family history isn't really a great predictor of LTCi need.

Not trying to change your mind. I wish you well.


Thanks. At what age did you purchase your plans?

By "federal plan" I meant the LCTFEDS plan for federal employees. I have a number of friends who dropped their coverage when they were hit with a 90% or more rate increase 5 or so years ago.

And I know family history isn't a great predictor of what we might need. But it was just another piece of the puzzle in making our decision to go it on our own.
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JoeRetire
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Re: Should we purchase LTC insurance at age 40?

Post by JoeRetire »

MDfan wrote: Fri Oct 30, 2020 9:13 amThanks. At what age did you purchase your plans?
I was 59. My wife was 58.
By "federal plan" I meant the LCTFEDS plan for federal employees. I have a number of friends who dropped their coverage when they were hit with a 90% or more rate increase 5 or so years ago.
Thanks. Never heard of it. I wonder what the new rate was.
And I know family history isn't a great predictor of what we might need. But it was just another piece of the puzzle in making our decision to go it on our own.
Yup. Makes sense.
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MDfan
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Re: Should we purchase LTC insurance at age 40?

Post by MDfan »

JoeRetire wrote: Fri Oct 30, 2020 9:35 am
MDfan wrote: Fri Oct 30, 2020 9:13 amThanks. At what age did you purchase your plans?
I was 59. My wife was 58.
By "federal plan" I meant the LCTFEDS plan for federal employees. I have a number of friends who dropped their coverage when they were hit with a 90% or more rate increase 5 or so years ago.
Thanks. Never heard of it. I wonder what the new rate was.
And I know family history isn't a great predictor of what we might need. But it was just another piece of the puzzle in making our decision to go it on our own.
Yup. Makes sense.

Here's an article that discusses the rate increase and the new plan the feds rolled out.

https://federalnewsnetwork.com/benefits ... an-option/
xb7
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Re: Should we purchase LTC insurance at age 40?

Post by xb7 »

My own experience suggests that it's better to wait.

I'm mid-60's now, but in my early 50's I read multiple financial articles that opined that it's good to start LTC insurance relatively early while you're healthy, and lock in a lower overall rate. With the bonus that should something happen along the way and you needed it, it would be there for you.

What actually happened is that we coasted along for quite a few years, then at some point our LTC company (Genworth) was purchased by a Chinese company. I can't claim that the two things were related, but not long after that (3 years ago I think maybe?), we got a notice that the company felt that they couldn't make an adequate profit given the premium rates and that they had been given the go-ahead to raise rates very substantially over the subsequent 3 years. We were given two or three options, none of which was terribly palatable. We ended up downgrading our level of coverage but keeping insurance with them.

This was somewhat disillusioning. In our case, at least --- we're still healthy --- it certainly would have been much better to wait . Even if the large rate increase hadn't occurred. But keep this scenario in mind should someone suggest that you want to "lock in" low rates. There is no certain "lock in" when it comes to future premium rates.
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