Only one LTC policy available after life-changing diagnosis--worth it?

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Topic Author
ljgs
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Only one LTC policy available after life-changing diagnosis--worth it?

Post by ljgs »

I posted previously about my 56-year-old husband getting a potentially life-changing diagnosis. It is now almost certain that he has very early Parkinson's disease. He is not on any meds yet and has no limitations, but of course no one can tell us how this will go. He is the major breadwinner of the two of us. Fortunately, our kids are in their 20s and close to being entirely self sufficient.

Amazingly, he was recently approved for a hybrid life insurance policy with long-term care rider. We would pay 100K for it now, and it would provide 200K over several years when needed. There is a 90-day exclusionary period, and it operates under the reimbursable method (i.e., we pay upfront for care and submit receipts). It's the only policy he was able to get, given his likely diagnosis.

We currently have about $2.75 million in assets, most of which are taxable. We also own a home currently worth about $1.1 million.

Given our assets and knowing how much it can cost to care for Parkinson's, the policy doesn't seem like a great deal; however, I am very anxious about what the future holds and understand that this might be helpful for me psychologically. And we do have 100K liquid right now for purchase. On the other hand, that 100K could be invested and potentially yield more than 200K by the time it's needed--but who knows?

I applied for a hybrid policy with LTC for myself (I'm 57), and was denied due to a newish preexisting condition. I'm invited to apply again in one year once I've stabilized. The policy I'm pursuing would be about 163K upfront with a payout of $838K over six years, so definitely a better deal than my husband's. If I'm approved, I plan to buy it.

In the meantime, would you pull the trigger on the policy offered to my husband? Feels like an underwhelming choice, but maybe better than nothing at all.
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TomatoTomahto
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by TomatoTomahto »

I honestly don’t mean this in any snarky way, but I don’t always make myself understood on forums.

That LTC policy isn’t good. I understand that psychologically it might make you feel better, but I’d suggest putting the $100k towards therapy to help you both deal with his diagnosis. It will be money better spent, and you’ll probably have plenty left over to invest.

All the best.
I get the FI part but not the RE part of FIRE.
smitcat
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by smitcat »

No - I would not buy that policy or any policy near those numbers.
Take some time and better evaluate your future options and choices.
HomeStretch
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by HomeStretch »

I also don’t think it sounds like a good policy. Unfortunately the LTCi policies available don’t insure the upside (i.e., care costs > max policy benefit).

Have you and your spouse consulted with a trust and estate attorney or an elder law attorney? If your state does not have a right of refusal for a spouse’s care, you as the well spouse should consider protecting assets now in order to avoid your individual and joint assets from being spent down for your spouse’s potential future care. This varies by state but your stop-gap may be Medicaid LTC. But it has a 5-year lookback so the sooner the better to make changes to asset titling, set up a trust and/or revise Wills/POAs. Especially as you are both only in your 50s.

I went through this with my parents in their 80s who kept delaying making attorney-recommended changes. Their outcome was not optimal for the well spouse.
Last edited by HomeStretch on Sun Jun 09, 2024 9:17 am, edited 1 time in total.
Rex66
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by Rex66 »

I personally would not buy in that situation

Besides the limited protection, I wouldn’t deal with the insurance company to possibly “double my money “. You can likely double the 100k in under 10 years and then spend any way you want without exclusion or qualifying or worrying about denials.
goblue100
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by goblue100 »

Rex66 wrote: Sun Jun 09, 2024 9:15 am You can likely double the 100k in under 10 years and then spend any way you want without exclusion or qualifying or worrying about denials.
I know almost nothing about Parkinson's or the course of the disease but the above was my thought. If he not likely to require the 200k payback for some years you can double it yourself, along with some of your other assets. Good luck whatever you decide.
"Confusion has its cost" - Crosby, Stills and Nash
EricGold
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by EricGold »

You can read about the spectrum of rate of progression of PD. I recommend you do so, since a not small part of your anxiety is from lack of information.

You can model alternative savings. E.g., if a balanced investment portfolio averages returns of 8% (all in nominal dollars) then the break-even for a doubling in account dollars is solved by calculating or plugging numbers into an NPV function
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ljgs
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by ljgs »

TomatoTomahto wrote: Sun Jun 09, 2024 8:45 am I honestly don’t mean this in any snarky way, but I don’t always make myself understood on forums.

That LTC policy isn’t good. I understand that psychologically it might make you feel better, but I’d suggest putting the $100k towards therapy to help you both deal with his diagnosis. It will be money better spent, and you’ll probably have plenty left over to invest.

All the best.
We are already receiving therapy. Thanks.
Topic Author
ljgs
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by ljgs »

HomeStretch wrote: Sun Jun 09, 2024 9:15 am I also don’t think it sounds like a good policy. Unfortunately the LTCi policies available don’t insure the upside (i.e., care costs > max policy benefit).

Have you and your spouse consulted with a trust and estate attorney or an elder law attorney? If your state does not have a right of refusal for a spouse’s care, you as the well spouse should consider protecting assets now in order to avoid your individual and joint assets from being spent down for your spouse’s potential future care. This varies by state but your stop-gap may be Medicaid LTC. But it has a 5-year lookback so the sooner the better to make changes to asset titling, set up a trust and/or revise Wills/POAs. Especially as you are both only in your 50s.

I went through this with my parents in their 80s who kept delaying making attorney-recommended changes. Their outcome was not optimal for the well spouse.
We met with an elder law attorney this week who said it was too early for us to make any changes other than making sure our POAs were up to date. He advised us not to put our assets in childrens' name at this point and assured us that there are steps we can take when things get to a more advanced point.
Topic Author
ljgs
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by ljgs »

EricGold wrote: Sun Jun 09, 2024 10:16 am You can read about the spectrum of rate of progression of PD. I recommend you do so, since a not small part of your anxiety is from lack of information.

You can model alternative savings. E.g., if a balanced investment portfolio averages returns of 8% (all in nominal dollars) then the break-even for a doubling in account dollars is solved by calculating or plugging numbers into an NPV function
I feel like I've done nothing *but* research rate of progression. Unfortunately, one of the hallmarks of Parkinson's is that the disease course truly is individual.
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ResearchMed
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by ResearchMed »

ljgs wrote: Sun Jun 09, 2024 8:40 am Amazingly, he was recently approved for a hybrid life insurance policy with long-term care rider. We would pay 100K for it now, and it would provide 200K over several years when needed. There is a 90-day exclusionary period, and it operates under the reimbursable method (i.e., we pay upfront for care and submit receipts). It's the only policy he was able to get, given his likely diagnosis.

We currently have about $2.75 million in assets, most of which are taxable. We also own a home currently worth about $1.1 million.

Very sorry about your news.

On one hand, the "amazingly" part of that hybrid life insurance policy: Insurers don't tend to give away prize money. They've looked at countless diagnoese and actuarial tables, and expect to make a profit on average. This is pretty much how all insurance works. "On average", there are no amazing features of the policies they sell.

On the other hand, this policy tops out by paying you $200k.
But are they really *paying* you $200k? $100k of that money was yours from the start, plus whatever interest you might have earned from it over however many years it lasts.

And on that elusive third hand, you already have $2.75 million plus ~$1.1 million in home equity.
Those amounts pretty much swamp the less-than-$100k that you'd "gain" from the policy.

Also, a couple of questions from your previous thread in April:
ljgs wrote: Wed Apr 03, 2024 12:27 pm DH and I are 56 and 57, me healthy and him potentially uninsurable pending a diagnosis. We have a net worth of $3.5 million, including our house, although a good chunk of it is taxable. Financial planner friend says we do not have enough to self-fund long-term care so looking into other options or considering foregoing LTC insurance altogether. Thoughts?
When you mention here (and in your original post on this thread) that much of your money is "taxable", what does that mean? Is the money mostly in tax-deferred accounts (e.g., TIRA, 401k, etc.), such that tax would need to be paid on the money when removed from the tax-deferred account? Or do you mean the money is in a "taxable" account, where only the gains are taxed?

If you are worried that tax-deferred money could be eaten away by taxes, keep in mind that for the most part (there are exceptions), medical care (which can include some or most, or even all, of custodial care is likely to be tax deductible. You could benefit from having tax deferred monies for this.

And finally, that "financial planner" who told you you do not have "enough" money... it that the person suggesting the LTC policy by any chance?

Best wishes to both of you.
(We've "been there, done that" with immediate family.)

RM
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JPM
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by JPM »

Sorry to learn of OP's husband's dx of early onset Parkinsonism.

If OP is healthy herself, she may be able to care for him personally if she is willing and her own health holds up. Such care is a big responsibility and carries significant psychological pressure. Caring for advanced Parkinsonism at home can be challenging in its later stages. Deterioration of the patient is usually slow and gradual. Loss of ability to perform the activities of daily living to a point where eligibility for LTCI coverage occurs is usually in the last year or two of life. Some wives enlist help from hospice at or near that point if there is no LTCI. No LTCI is needed for hospice.

Given the age and diagnosis of the patient, it's unlikely that an LTCI policy is available that is a good value.
WoW2012
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by WoW2012 »

ljgs wrote: Sun Jun 09, 2024 8:40 am I posted previously about my 56-year-old husband getting a potentially life-changing diagnosis. It is now almost certain that he has very early Parkinson's disease. He is not on any meds yet and has no limitations, but of course no one can tell us how this will go. He is the major breadwinner of the two of us. Fortunately, our kids are in their 20s and close to being entirely self sufficient.

Amazingly, he was recently approved for a hybrid life insurance policy with long-term care rider. We would pay 100K for it now, and it would provide 200K over several years when needed. There is a 90-day exclusionary period, and it operates under the reimbursable method (i.e., we pay upfront for care and submit receipts). It's the only policy he was able to get, given his likely diagnosis.

We currently have about $2.75 million in assets, most of which are taxable. We also own a home currently worth about $1.1 million.

Given our assets and knowing how much it can cost to care for Parkinson's, the policy doesn't seem like a great deal; however, I am very anxious about what the future holds and understand that this might be helpful for me psychologically. And we do have 100K liquid right now for purchase. On the other hand, that 100K could be invested and potentially yield more than 200K by the time it's needed--but who knows?

I applied for a hybrid policy with LTC for myself (I'm 57), and was denied due to a newish preexisting condition. I'm invited to apply again in one year once I've stabilized. The policy I'm pursuing would be about 163K upfront with a payout of $838K over six years, so definitely a better deal than my husband's. If I'm approved, I plan to buy it.

In the meantime, would you pull the trigger on the policy offered to my husband? Feels like an underwhelming choice, but maybe better than nothing at all.
As a long-term care insurance specialist, here are my thoughts:

1) Don't buy that annuity for your husband. That's a horrible value especially since it would probably pay out only $2,778 per month (in other words, it would take 3 years of benefits just for you to get your $100K back).

2) Depending upon your state of residence there are MUCH better long-term care annuities that would provide much richer benefits (e.g 3x the deposit by year 4, 4x the deposit by year 11, nearly 5x the deposit by year 20, etc...)

3) If most of your $2.75 million is in traditional retirement accounts, plan on using those funds to pay for his care because his care expenses would offset most of the taxes due on the withdrawals.

4) The hybrid you were quoted for yourself is OK. There are better hybrids than you've described.

5) If you're healthy enough to qualify for a traditional LTCi policy, you may be better off paying a small annual premium for your policy rather than a $163K lump sum.


wow
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Topic Author
ljgs
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by ljgs »

WoW2012 wrote: Mon Jun 10, 2024 9:37 am
ljgs wrote: Sun Jun 09, 2024 8:40 am I posted previously about my 56-year-old husband getting a potentially life-changing diagnosis. It is now almost certain that he has very early Parkinson's disease. He is not on any meds yet and has no limitations, but of course no one can tell us how this will go. He is the major breadwinner of the two of us. Fortunately, our kids are in their 20s and close to being entirely self sufficient.

Amazingly, he was recently approved for a hybrid life insurance policy with long-term care rider. We would pay 100K for it now, and it would provide 200K over several years when needed. There is a 90-day exclusionary period, and it operates under the reimbursable method (i.e., we pay upfront for care and submit receipts). It's the only policy he was able to get, given his likely diagnosis.

We currently have about $2.75 million in assets, most of which are taxable. We also own a home currently worth about $1.1 million.

Given our assets and knowing how much it can cost to care for Parkinson's, the policy doesn't seem like a great deal; however, I am very anxious about what the future holds and understand that this might be helpful for me psychologically. And we do have 100K liquid right now for purchase. On the other hand, that 100K could be invested and potentially yield more than 200K by the time it's needed--but who knows?

I applied for a hybrid policy with LTC for myself (I'm 57), and was denied due to a newish preexisting condition. I'm invited to apply again in one year once I've stabilized. The policy I'm pursuing would be about 163K upfront with a payout of $838K over six years, so definitely a better deal than my husband's. If I'm approved, I plan to buy it.

In the meantime, would you pull the trigger on the policy offered to my husband? Feels like an underwhelming choice, but maybe better than nothing at all.
As a long-term care insurance specialist, here are my thoughts:

1) Don't buy that annuity for your husband. That's a horrible value especially since it would probably pay out only $2,778 per month (in other words, it would take 3 years of benefits just for you to get your $100K back).

2) Depending upon your state of residence there are MUCH better long-term care annuities that would provide much richer benefits (e.g 3x the deposit by year 4, 4x the deposit by year 11, nearly 5x the deposit by year 20, etc...)

3) If most of your $2.75 million is in traditional retirement accounts, plan on using those funds to pay for his care because his care expenses would offset most of the taxes due on the withdrawals.

4) The hybrid you were quoted for yourself is OK. There are better hybrids than you've described.

5) If you're healthy enough to qualify for a traditional LTCi policy, you may be better off paying a small annual premium for your policy rather than a $163K lump sum.


wow
Wow, thank you (and, wow!). We live in NJ and are interested in hearing more about the long-term care annuities, as well as other LTC policies that might be suitable for me. Our elder law attorney mentioned annuities but didn't think they were something we needed to pull the trigger on right now.
Interestingly, he suggested we look into a civil divorce as a method of enabling me to retain sufficient assets to ensure my own care in old age.
WoW2012
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by WoW2012 »

ljgs wrote: Mon Jun 10, 2024 11:02 am
WoW2012 wrote: Mon Jun 10, 2024 9:37 am
ljgs wrote: Sun Jun 09, 2024 8:40 am I posted previously about my 56-year-old husband getting a potentially life-changing diagnosis. It is now almost certain that he has very early Parkinson's disease. He is not on any meds yet and has no limitations, but of course no one can tell us how this will go. He is the major breadwinner of the two of us. Fortunately, our kids are in their 20s and close to being entirely self sufficient.

Amazingly, he was recently approved for a hybrid life insurance policy with long-term care rider. We would pay 100K for it now, and it would provide 200K over several years when needed. There is a 90-day exclusionary period, and it operates under the reimbursable method (i.e., we pay upfront for care and submit receipts). It's the only policy he was able to get, given his likely diagnosis.

We currently have about $2.75 million in assets, most of which are taxable. We also own a home currently worth about $1.1 million.

Given our assets and knowing how much it can cost to care for Parkinson's, the policy doesn't seem like a great deal; however, I am very anxious about what the future holds and understand that this might be helpful for me psychologically. And we do have 100K liquid right now for purchase. On the other hand, that 100K could be invested and potentially yield more than 200K by the time it's needed--but who knows?

I applied for a hybrid policy with LTC for myself (I'm 57), and was denied due to a newish preexisting condition. I'm invited to apply again in one year once I've stabilized. The policy I'm pursuing would be about 163K upfront with a payout of $838K over six years, so definitely a better deal than my husband's. If I'm approved, I plan to buy it.

In the meantime, would you pull the trigger on the policy offered to my husband? Feels like an underwhelming choice, but maybe better than nothing at all.
As a long-term care insurance specialist, here are my thoughts:

1) Don't buy that annuity for your husband. That's a horrible value especially since it would probably pay out only $2,778 per month (in other words, it would take 3 years of benefits just for you to get your $100K back).

2) Depending upon your state of residence there are MUCH better long-term care annuities that would provide much richer benefits (e.g 3x the deposit by year 4, 4x the deposit by year 11, nearly 5x the deposit by year 20, etc...)

3) If most of your $2.75 million is in traditional retirement accounts, plan on using those funds to pay for his care because his care expenses would offset most of the taxes due on the withdrawals.

4) The hybrid you were quoted for yourself is OK. There are better hybrids than you've described.

5) If you're healthy enough to qualify for a traditional LTCi policy, you may be better off paying a small annual premium for your policy rather than a $163K lump sum.


wow
Wow, thank you (and, wow!). We live in NJ and are interested in hearing more about the long-term care annuities, as well as other LTC policies that might be suitable for me. Our elder law attorney mentioned annuities but didn't think they were something we needed to pull the trigger on right now.
Interestingly, he suggested we look into a civil divorce as a method of enabling me to retain sufficient assets to ensure my own care in old age.
When you stated, "We currently have about $2.75 million in assets, most of which are taxable" please clarify what you mean by "taxable".

Are you referring to retirement accounts like a 401k or traditional IRA?
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Topic Author
ljgs
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by ljgs »

I meant that about $2M of that money is in traditional IRAs and brokerage accounts, so withdrawals will incur taxes. The rest is in Roth accounts, an after-tax HSA, and checking accounts.
bsteiner
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by bsteiner »

ljgs wrote: Mon Jun 10, 2024 11:02 am ...
Wow, thank you (and, wow!). We live in NJ and are interested in hearing more about the long-term care annuities, as well as other LTC policies that might be suitable for me. Our elder law attorney mentioned annuities but didn't think they were something we needed to pull the trigger on right now.
Interestingly, he suggested we look into a civil divorce as a method of enabling me to retain sufficient assets to ensure my own care in old age.
With close to $4 million, a trusts and estates lawyer would probably be a better fit.
WoW2012
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by WoW2012 »

bsteiner wrote: Mon Jun 10, 2024 12:04 pm
ljgs wrote: Mon Jun 10, 2024 11:02 am ...
Wow, thank you (and, wow!). We live in NJ and are interested in hearing more about the long-term care annuities, as well as other LTC policies that might be suitable for me. Our elder law attorney mentioned annuities but didn't think they were something we needed to pull the trigger on right now.
Interestingly, he suggested we look into a civil divorce as a method of enabling me to retain sufficient assets to ensure my own care in old age.
With close to $4 million, a trusts and estates lawyer would probably be a better fit.
The $2 million in traditional IRAs canNOT be protected by a trust.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Topic Author
ljgs
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by ljgs »

bsteiner wrote: Mon Jun 10, 2024 12:04 pm
ljgs wrote: Mon Jun 10, 2024 11:02 am ...
Wow, thank you (and, wow!). We live in NJ and are interested in hearing more about the long-term care annuities, as well as other LTC policies that might be suitable for me. Our elder law attorney mentioned annuities but didn't think they were something we needed to pull the trigger on right now.
Interestingly, he suggested we look into a civil divorce as a method of enabling me to retain sufficient assets to ensure my own care in old age.
With close to $4 million, a trusts and estates lawyer would probably be a better fit.
We have an estate lawyer already, so our wills and POAs are all up to date.
WoW2012
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by WoW2012 »

ljgs wrote: Mon Jun 10, 2024 11:40 am I meant that about $2M of that money is in traditional IRAs and brokerage accounts, so withdrawals will incur taxes. The rest is in Roth accounts, an after-tax HSA, and checking accounts.
Plan on using some/most/all of your husband's traditional IRAs to pay for his care.

I, personally, would not work with an elder law attorney who says "divorce" is something to consider.

The annuities the attorney is talking about are immediate annuities purchased after care is needed in order to help your husband qualify for Medicaid. With your assets I would not work with an elder law attorney who thinks Medicaid is an option for your husband. You want to keep your husband off of Medicaid so that he can get the best care possible.

There is that one good deferred annuity available in NJ that your husband could probably qualify for. It would provide good benefits (e.g 3x the deposit by year 4, 4x the deposit by year 11, nearly 5x the deposit by year 20, etc...)

You should consider downsizing and moving into a single level, wheelchair friendly house with large bathroom/roll-in shower.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Topic Author
ljgs
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by ljgs »

WoW2012 wrote: Mon Jun 10, 2024 12:14 pm
ljgs wrote: Mon Jun 10, 2024 11:40 am I meant that about $2M of that money is in traditional IRAs and brokerage accounts, so withdrawals will incur taxes. The rest is in Roth accounts, an after-tax HSA, and checking accounts.
Plan on using some/most/all of your husband's traditional IRAs to pay for his care.

I, personally, would not work with an elder law attorney who says "divorce" is something to consider.

The annuities the attorney is talking about are immediate annuities purchased after care is needed in order to help your husband qualify for Medicaid. With your assets I would not work with an elder law attorney who thinks Medicaid is an option for your husband. You want to keep your husband off of Medicaid so that he can get the best care possible.

There is that one good deferred annuity available in NJ that your husband could probably qualify for. It would provide good benefits (e.g 3x the deposit by year 4, 4x the deposit by year 11, nearly 5x the deposit by year 20, etc...)
I'm getting another opinion from a different NJ elder lawyer. Is there any more info about the annuity you're referring to so I can look it up or discuss it with the next lawyer? Thank you!
Topic Author
ljgs
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by ljgs »

WoW2012 wrote: Mon Jun 10, 2024 12:14 pm
ljgs wrote: Mon Jun 10, 2024 11:40 am I meant that about $2M of that money is in traditional IRAs and brokerage accounts, so withdrawals will incur taxes. The rest is in Roth accounts, an after-tax HSA, and checking accounts.
Plan on using some/most/all of your husband's traditional IRAs to pay for his care.

I, personally, would not work with an elder law attorney who says "divorce" is something to consider.

The annuities the attorney is talking about are immediate annuities purchased after care is needed in order to help your husband qualify for Medicaid. With your assets I would not work with an elder law attorney who thinks Medicaid is an option for your husband. You want to keep your husband off of Medicaid so that he can get the best care possible.

There is that one good deferred annuity available in NJ that your husband could probably qualify for. It would provide good benefits (e.g 3x the deposit by year 4, 4x the deposit by year 11, nearly 5x the deposit by year 20, etc...)

You should consider downsizing and moving into a single level, wheelchair friendly house with large bathroom/roll-in shower.
One other question for you: Given that the state of NJ has a Medicaid exemption of slightly more than $1M that allows the healthy spouse to stay in their home, it seems worth it to remain homeowners in some capacity rather than move into a wheelchair-friendly rental, correct?
WoW2012
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by WoW2012 »

ljgs wrote: Mon Jun 10, 2024 12:16 pm
WoW2012 wrote: Mon Jun 10, 2024 12:14 pm
ljgs wrote: Mon Jun 10, 2024 11:40 am I meant that about $2M of that money is in traditional IRAs and brokerage accounts, so withdrawals will incur taxes. The rest is in Roth accounts, an after-tax HSA, and checking accounts.
Plan on using some/most/all of your husband's traditional IRAs to pay for his care.

I, personally, would not work with an elder law attorney who says "divorce" is something to consider.

The annuities the attorney is talking about are immediate annuities purchased after care is needed in order to help your husband qualify for Medicaid. With your assets I would not work with an elder law attorney who thinks Medicaid is an option for your husband. You want to keep your husband off of Medicaid so that he can get the best care possible.

There is that one good deferred annuity available in NJ that your husband could probably qualify for. It would provide good benefits (e.g 3x the deposit by year 4, 4x the deposit by year 11, nearly 5x the deposit by year 20, etc...)
I'm getting another opinion from a different NJ elder lawyer. Is there any more info about the annuity you're referring to so I can look it up or discuss it with the next lawyer? Thank you!
https://www.equitrust.com/products/bridge-annuity/
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by WoW2012 »

ljgs wrote: Mon Jun 10, 2024 12:18 pm
One other question for you: Given that the state of NJ has a Medicaid exemption of slightly more than $1M that allows the healthy spouse to stay in their home, it seems worth it to remain homeowners in some capacity rather than move into a wheelchair-friendly rental, correct?
I didn't say rental.
The $1M home equity exemption does not protect the home from a lien. The state is required to reimburse itself after the sale of your "protected home". It's called Medicaid estate recovery. (That's why long-term care insurance partnership policies are so valuable. Partnership policies protect assets from Medicaid spend down AND Medicaid estate recovery.)
Clearly, you want to remain in your home. Then you should do whatever you can to modify it to make it easy to care for your husband.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Topic Author
ljgs
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by ljgs »

WoW2012 wrote: Mon Jun 10, 2024 12:23 pm
ljgs wrote: Mon Jun 10, 2024 12:18 pm
One other question for you: Given that the state of NJ has a Medicaid exemption of slightly more than $1M that allows the healthy spouse to stay in their home, it seems worth it to remain homeowners in some capacity rather than move into a wheelchair-friendly rental, correct?
I didn't say rental.
The $1M home equity exemption does not protect the home from a lien. The state is required to reimburse itself after the sale of your "protected home". It's called Medicaid estate recovery. (That's why long-term care insurance partnership policies are so valuable. Partnership policies protect assets from Medicaid spend down AND Medicaid estate recovery.)
Clearly, you want to remain in your home. Then you should do whatever you can to modify it to make it easy to care for your husband.
We will not remain in our home if he becomes debilitated; it's simply too big and has stairs. We would downsize to something easier to manage. I'm not familiar with LTC partnership policies, but I take it he doesn't qualify anyway. I suppose I can look into it for myself.
BruDude
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Location: Las Vegas

Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by BruDude »

Does the LTC benefit in this scenario not have any increase and always locked at the $200k number even 20+ years from now? ?
WoW2012
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by WoW2012 »

BruDude wrote: Mon Jun 10, 2024 12:51 pm Does the LTC benefit in this scenario not have any increase and always locked at the $200k number even 20+ years from now? ?
Most LTC Annuities do not have any type of inflation growth.
A few do, but it's not always worth the cost.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
rogue_economist
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by rogue_economist »

Policy isn't worth it, far too little benefit for that expense. With the home value being what it is, and the fact that you probably have enough lead time to beat the claw back period looking into a medicaid protection trust ASAP would be the best move.
Society grows great when old men plant trees whose shade they shall never sit in
WoW2012
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by WoW2012 »

ljgs wrote: Mon Jun 10, 2024 12:35 pm
We will not remain in our home if he becomes debilitated; it's simply too big and has stairs. We would downsize to something easier to manage. I'm not familiar with LTC partnership policies, but I take it he doesn't qualify anyway. I suppose I can look into it for myself.
I'm sorry for not being more specific about the policies. I have to be careful what I post on this forum due to the "no solicitation" rules.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by WoW2012 »

rogue_economist wrote: Mon Jun 10, 2024 12:54 pm Policy isn't worth it, far too little benefit for that expense. With the home value being what it is, and the fact that you probably have enough lead time to beat the claw back period looking into a medicaid protection trust ASAP would be the best move.
Rogue,
Most of their net worth is in retirement accounts.
Trusts do NOT protect retirement accounts.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Chardo
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Joined: Fri Feb 18, 2022 12:16 pm

Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by Chardo »

What is the actual goal here? What would you like to accomplish?
rogue_economist
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Re: Only one LTC policy available after life-changing diagnosis--worth it?

Post by rogue_economist »

WoW2012 wrote: Mon Jun 10, 2024 1:00 pm
rogue_economist wrote: Mon Jun 10, 2024 12:54 pm Policy isn't worth it, far too little benefit for that expense. With the home value being what it is, and the fact that you probably have enough lead time to beat the claw back period looking into a medicaid protection trust ASAP would be the best move.
Rogue,
Most of their net worth is in retirement accounts.
Trusts do NOT protect retirement accounts.
I know that ("With the home value being what it is"), but you are still talking about a home worth $1.1 million. Worst come to worst if things hit the fan and medical costs drain the other accounts then the surviving spouse at least has the value of the home to live off. 4% draw down of $1.1 Million is 44k a year. Add social security and that is enough for a basic living which is not something to shake a stick at.
Society grows great when old men plant trees whose shade they shall never sit in
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