Should we get the Mutual of Omaha LTC Policy?

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Topic Author
Wenonah
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Joined: Sat Nov 24, 2012 1:30 pm

Should we get the Mutual of Omaha LTC Policy?

Post by Wenonah » Thu Feb 07, 2019 12:11 pm

I got a broker with a strong reputation to find us the best policy, but 4500 is a large chunk of change to put down each year. If one of us is debilitated and the other can't do anything, then I don't want either of us to never be able to leave home and/or be full time caregivers with no help. I have a tall husband and wouldn't be able to move him. Although we are both healthy, we have a history of dementia, stroke, heart disease in our families. Husband will get a monthly pension of 1900 and I will get 1443 @ 65. SS a@ 66/10 months for me and maybe wait till 70 for his. We have 1.1 million in Brokerage account, Roth, Regular IRA at Vanguard and the defined portion of our Teachers retirement. Paid off house. Using Vanguard advisors we are mostly retired, (side jobs of 1000 a month total) but using our own investments till 65 (8000 a month, but trying to cut expenses)
Would you get this policy? Would love your opinion as it is mostly the last piece of our retirement puzzle (or "The Grand Experiment" as DH says)
He: 61/Her: 59
Policy Limit: 125,000
Cash Benefits (40% of HHC) 1600 per month
Reimbursement Benefits:
Nursing Home --Up to 4000 per month
Assisted Living---Up to 4000 per month
Home Health Care--Up to 4000 per month
Elimination period: 30 days
Benefit Duration: 2.6 years each (partner qualified; shared benefit)
Inflation Protection: 3% compound lifetime with buy up option
TOTAL PREMIUM: Annual: 4525.00 Thanks so much.

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JoeRetire
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Re: Should we get the Mutual of Omaha LTC Policy?

Post by JoeRetire » Thu Feb 07, 2019 12:29 pm

I would keep shopping for a better plan.
And you might consider a longer elimination period than just 30 days.
What state are you in?

$4500 is a lot. And the policy limit is kind of low. But much of that depends on the health of you and your husband. Some conditions (such as high blood sugar or obesity) will result in higher premiums. Other conditions will not.
Don't be a lemming.

Topic Author
Wenonah
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Joined: Sat Nov 24, 2012 1:30 pm

Re: Should we get the Mutual of Omaha LTC Policy?

Post by Wenonah » Thu Feb 07, 2019 12:38 pm

We are in Washington. So the longer elimination period would make it cheaper? What is sort of the standard? 60 or 90 days?

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JoeRetire
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Re: Should we get the Mutual of Omaha LTC Policy?

Post by JoeRetire » Thu Feb 07, 2019 12:39 pm

Wenonah wrote:
Thu Feb 07, 2019 12:38 pm
So the longer elimination period would make it cheaper?
Yes. Talk to your broker about it.
Don't be a lemming.

adamthesmythe
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Re: Should we get the Mutual of Omaha LTC Policy?

Post by adamthesmythe » Thu Feb 07, 2019 12:46 pm

JoeRetire wrote:
Thu Feb 07, 2019 12:29 pm
I would keep shopping for a better plan.
And you might consider a longer elimination period than just 30 days.
What state are you in?

$4500 is a lot. And the policy limit is kind of low. But much of that depends on the health of you and your husband. Some conditions (such as high blood sugar or obesity) will result in higher premiums. Other conditions will not.
It's not kinda low, it's very low.

Given the policy limits think about this as insurance for medium-term care, when used up you are into your other assets. Maybe you should look into trusts or medicare annuities, so a spouse not in care still has some assets left.

Topic Author
Wenonah
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Joined: Sat Nov 24, 2012 1:30 pm

Re: Should we get the Mutual of Omaha LTC Policy?

Post by Wenonah » Thu Feb 07, 2019 6:52 pm

Is the price reasonable for what we are getting? I know I need to do more research. We dont think we need the Cadillac version as we should still have assets and pensions.

seychellois_lib
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Re: Should we get the Mutual of Omaha LTC Policy?

Post by seychellois_lib » Thu Feb 07, 2019 8:09 pm

I had a very similar decision to make about one year ago (same provider). I decided to pass. While other factors entered the decision, my biggest concern was the open ended premium. While LTC insurance actuaries think they have a better handle on the insured population than they did 20 years ago, I am not so sure. Inflation seems to have run amok in the care industry so I have low confidence in premium affordability over time. I just decided the risk of having to give up the insurance due to long term affordability was greater than the risk of needing the insurance.

NoHeat
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Re: Should we get the Mutual of Omaha LTC Policy?

Post by NoHeat » Fri Feb 08, 2019 8:19 pm

I have a policy from Mutual of Omaha, which I compare to the OP's, below. I chose the Omaha policy over bids from MassMutual, Genworth, and Transamerica, when I bought it a few years ago, when I got a small discount for being a member of IEEE (a professional society for engineers).

He: 61/Her: 59 ME: 57, when the policy was issued a few years ago, for just one person, not for two people -- that's a big difference
Policy Limit: 125,000 ME: $256,000k
Cash Benefits (40% of HHC) 1600 per month ME: $1278 per month
Reimbursement Benefits:
Nursing Home --Up to 4000 per month ME: $4,262/month
Assisted Living---Up to 4000 per month ME: $4,262/month
Home Health Care--Up to 4000 per month ME: $4,262/month
Elimination period: 30 days ME: 90 days because I have savings, so I can afford 3 months in a nursing home out of pocket; maybe I should have asked about making it even longer
Benefit Duration: 2.6 years each (partner qualified; shared benefit) ME: this isn't important by itself, as it's just the ratio of policy limit / max monthly HHC benefit
Inflation Protection: 3% compound lifetime with buy up option ME: benefits increase 3% every year (this is important but costs a lot more than if benefits remain constant)
TOTAL PREMIUM: Annual: 4525.00 ME: $1,431 per year, for one person

FBN2014
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Re: Should we get the Mutual of Omaha LTC Policy?

Post by FBN2014 » Fri Feb 08, 2019 10:39 pm

You might consider a short term policy. I believe it goes up to one year of coverage. Aetna is the company that I know has this. It would give you more time to arrange your financial affairs if a long term crisis occurs and protect a portion of your assets.
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Taylor Larimore
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Re: Should we get the Mutual of Omaha LTC Policy?

Post by Taylor Larimore » Fri Feb 08, 2019 10:53 pm

Wenonah:

There are important facts that have not been mentioned:

1. Most Long Term Care policies can have the premium increased by the insurance company. This means that the beginning premium is often misleading and should not be relied upon.

2. Read the fine-print in the actual policy and understand every word (especially the company's definition of "disability") before making this large, lifetime commitment.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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abuss368
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Re: Should we get the Mutual of Omaha LTC Policy?

Post by abuss368 » Sat Feb 09, 2019 4:31 pm

I do not know enough about long term care policies. I understand any inflation riders usually include a much higher premium. It appears since the financial crisis that the number of insurance companies offering LTC policies has declined.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

ralph124cf
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Re: Should we get the Mutual of Omaha LTC Policy?

Post by ralph124cf » Sat Feb 09, 2019 6:40 pm

The elimination period is too short. Try for one year. You have enough money to pay that out of pocket. This will allow for AT LEAST a 60-70% reduction in premium.

The $4,000 max per month payment is on the low side. In my area a nursing homes cost close to $10,000/month. You will have to come up with the difference out of pocket.

The $125,000 max benefit will be gone in 31 months at $4000/month. You need a higher max benefit. I know that the majority of people are dead within 1 year of nursing home admittance, but this is insurance against unlikely events (living too long in a nursing home and running out of money).

You are actually in exactly the category of people that can most benefit from LTCI, not enough money to self insure, but too much to depend on Medicaid.

Keep checking out other policies and providers. Look for a 1 year elimination period, and a higher monthly benefit and benefit cap. You do not need to buy enough to pay the entire monthly cost of nursing home care, but you do need something that will pay a bigger chunk of it.

Ralph

Topic Author
Wenonah
Posts: 78
Joined: Sat Nov 24, 2012 1:30 pm

Re: Should we get the Mutual of Omaha LTC Policy?

Post by Wenonah » Sun Feb 10, 2019 5:07 pm

He: 61/Her: 59
Policy Limit: 125,000
Cash Benefits (40% of HHC) 1600 per month
Reimbursement Benefits:
Nursing Home --Up to 4000 per month
Assisted Living---Up to 4000 per month
Home Health Care--Up to 4000 per month
Elimination period: 30 days
Benefit Duration: 2.6 years each (partner qualified; shared benefit)
Inflation Protection: 3% compound lifetime with buy up option
TOTAL PREMIUM: Annual: 4525.00 Thanks so much.

O.K. I forgot something.... Under Cash Benefits it says"
Benefit Duration 6.5 years (78.1 months)
But under Reimbursement Benefits it ways 2.6 years. My husband just pointed out to me that there are two columns: one for me and one for him, so maybe we each get 6.5 years? I am going to call the broker again. Sorry about my lack of information.

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