Long-Term Care Decision

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

Re: Long-Term Care Decision

Post by WoW2012 » Sun Aug 04, 2019 11:00 pm

willthrill81 wrote:
Sun Aug 04, 2019 8:42 pm
WoW2012 wrote:
Sat Aug 03, 2019 3:50 pm
TomatoTomahto wrote:
Sat Aug 03, 2019 2:36 pm
WoW2012 wrote:
Sat Aug 03, 2019 2:30 pm
TomatoTomahto wrote:
Sat Aug 03, 2019 12:12 pm

Uh, yeah, because our umbrella policies require it.
Umbrella policies do not require collision insurance. Do you know what I mean by collusion insurance?
I assume you meant collision not collusion. I guess umbrella covers you regardless of whether you have collision or not, but whatever, you still haven’t answered “at what NW level one can self insure?” Simple question. You divert as much as another famous ... never mind. Just answer the question please.
Decamillionaires insure their $100,000 car even though they can buy 100 similar new cars tomorrow.
Decamillionaires own long-term care insurance for the same reason when the benefits-to-premium comparison is a good value.
I never said that everyone should own long-term care insurance. I tell consumers every day to NOT buy long-term care insurance. It all depends upon how much value they can get based upon their current age and health.
That still doesn't answer the question.

Unless they are able to write off the premiums as a business expense, I've never seen a situation where it was in a decamillionaire's best financial interest to buy LTC insurance. Even if their LTC cost $200k annually, that would be a grand total of 2% of their assets (assuming exactly $10 million net worth). There's zero need for LTC insurance at such a level. And just because some decamillionaires engage in an activity like buying LTC insurance does not make it a wise decision; that's an appeal to wealth.

Then why do decamillionaires buy long-term care insurance?
I know several.

ChrisC
Posts: 818
Joined: Tue Jun 19, 2012 9:10 am
Location: North Carolina

Re: Long-Term Care Decision

Post by ChrisC » Mon Aug 05, 2019 1:40 am

WoW2012 wrote:
Sun Aug 04, 2019 11:00 pm
willthrill81 wrote:
Sun Aug 04, 2019 8:42 pm
WoW2012 wrote:
Sat Aug 03, 2019 3:50 pm
TomatoTomahto wrote:
Sat Aug 03, 2019 2:36 pm
WoW2012 wrote:
Sat Aug 03, 2019 2:30 pm

Umbrella policies do not require collision insurance. Do you know what I mean by collusion insurance?
I assume you meant collision not collusion. I guess umbrella covers you regardless of whether you have collision or not, but whatever, you still haven’t answered “at what NW level one can self insure?” Simple question. You divert as much as another famous ... never mind. Just answer the question please.
Decamillionaires insure their $100,000 car even though they can buy 100 similar new cars tomorrow.
Decamillionaires own long-term care insurance for the same reason when the benefits-to-premium comparison is a good value.
I never said that everyone should own long-term care insurance. I tell consumers every day to NOT buy long-term care insurance. It all depends upon how much value they can get based upon their current age and health.
That still doesn't answer the question.

Unless they are able to write off the premiums as a business expense, I've never seen a situation where it was in a decamillionaire's best financial interest to buy LTC insurance. Even if their LTC cost $200k annually, that would be a grand total of 2% of their assets (assuming exactly $10 million net worth). There's zero need for LTC insurance at such a level. And just because some decamillionaires engage in an activity like buying LTC insurance does not make it a wise decision; that's an appeal to wealth.

Then why do decamillionaires buy long-term care insurance?
I know several.
Hmmm, I think we have someone here that conflates "need" for insurance with whether it's prudential, wise, or appropriate to have insurance. Some insurance is a bad deal but that depends mainly on personal circumstance -- I don't take out cell phone insurance but I have a cousin who is not very smart, borderline mentally slow, and cell phone insurance could be a good deal for him, as he is prone to damage or lose his phone and is below the poverty line! I will take an extended warranty on some products or services though in general these are bad deals. I just don't understand why some ppl feel the need to universalize their personal experience -- it kinda get annoying to hear " I self insure and this is best for ppl who can afford to self insure."

smitcat
Posts: 4017
Joined: Mon Nov 07, 2016 10:51 am

Re: Long-Term Care Decision

Post by smitcat » Mon Aug 05, 2019 8:07 am

willthrill81 wrote:
Sun Aug 04, 2019 8:42 pm
WoW2012 wrote:
Sat Aug 03, 2019 3:50 pm
TomatoTomahto wrote:
Sat Aug 03, 2019 2:36 pm
WoW2012 wrote:
Sat Aug 03, 2019 2:30 pm
TomatoTomahto wrote:
Sat Aug 03, 2019 12:12 pm

Uh, yeah, because our umbrella policies require it.
Umbrella policies do not require collision insurance. Do you know what I mean by collusion insurance?
I assume you meant collision not collusion. I guess umbrella covers you regardless of whether you have collision or not, but whatever, you still haven’t answered “at what NW level one can self insure?” Simple question. You divert as much as another famous ... never mind. Just answer the question please.
Decamillionaires insure their $100,000 car even though they can buy 100 similar new cars tomorrow.
Decamillionaires own long-term care insurance for the same reason when the benefits-to-premium comparison is a good value.
I never said that everyone should own long-term care insurance. I tell consumers every day to NOT buy long-term care insurance. It all depends upon how much value they can get based upon their current age and health.
That still doesn't answer the question.

Unless they are able to write off the premiums as a business expense, I've never seen a situation where it was in a decamillionaire's best financial interest to buy LTC insurance. Even if their LTC cost $200k annually, that would be a grand total of 2% of their assets (assuming exactly $10 million net worth). There's zero need for LTC insurance at such a level. And just because some decamillionaires engage in an activity like buying LTC insurance does not make it a wise decision; that's an appeal to wealth.
"Unless they are able to write off the premiums as a business expense,"
FWIW - you can have 2 rental units and write off as a business expense
- you can do tutoring and write off as a business expense
- you can be a 'handy man' and write it off
There are many ways to be in business in a low profile low impact way and do that.

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Ben Mathew
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Joined: Tue Mar 13, 2018 11:41 am
Location: Seattle
Contact:

Re: Long-Term Care Decision

Post by Ben Mathew » Mon Aug 05, 2019 8:43 am

Here are some calculations that can help inform your decision.

Current premium is $3,584. But assume premium will double to $7168 (nominal) 15 years into the policy.
Assume inflation is 2% per year.

For various ages, we can calculate:

Annual max / policy max in today's dollars if you didn't use any benefits yet
vs
Real investment balance you would have had if you had instead deposited the LTC premium into an investment account yielding 3.5% real growth.

Try to imagine whether you would rather have the LTC benefits or the investment balance at these ages. It's not a complete analysis, but it's a start.

AGE 60/57 (CURRENT)
Annual max = $60K / Policy max = $360K
Investment balance would be $3,584

AGE 70/67:
Annual max = $66K / Policy max = $397K
Investment balance would have grown to $43K

AGE 80/77:
Annual max = $73K / Policy max = $438K
Investment balance would have grown to $108K

AGE 90/87
Annual max = $80K / Policy max = $482K
Investment balance would have grown to $204K

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beyou
Posts: 2791
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: Long-Term Care Decision

Post by beyou » Mon Aug 05, 2019 9:39 am

TravelforFun wrote:
Sat Aug 03, 2019 11:02 am
Regarding LTC, why would we buy insurance to protect against our $300K home loss and hesitate to buy insurance to protect against our $300K LTC cost when the chance of us needing LTC is higher than the chance of us losing our entire home?

TravelforFun
Well I pay for home owners and not LTC and I think there is a huge difference.

1) I know about how much it would take to rebuild my home, and this risk is fully ensured.
I have no idea what the total lifetime cost is for LTC and therefore not sure how much to insure, and some policies will only sell you so much,
Insufficient for worst case scenarios. Isn't insurance to cover catastrophies, not prepaid expenses ? LTC Feels like a prepaid expense, like dental insurance.

2) I live close enough to the ocean, hurricanes are a realistic risk...I absolutely think the risk is higher than worst case nursing home care.
In fact we already had a major hurricane destroy many homes in my area years ago. I saw a neighbor with a tree that crushed his car and landed in his living room. How can you say the chance of losing your home is low ? Others face fires, tornadoes etc.

3) If my property insurer raises my rates, I can shop around every year. LTC insurers can raise your rates, but good luck shopping around when you are older. I have seen many had their rates raises after many years of paying when younger and healthier.

In summary, you have no idea what you will pay for LTC, but have limited coverage that will not cover a catastrophic loss.
For property insurance you know exactly what you are paying and the worst case is covered.

Similar logic for medical vs dental, one covers catastrophic losses and the other is prepaid care.
How many Bogleheads have medical vs dental from outside their employers ? If/when I leave my job (before Medicare)
I will continue with medical for sure but not dental most likely). If they ever improve dental and LTC to cover catastrophic losses at a reasonable cost, I am ready to buy both.

User avatar
willthrill81
Posts: 13186
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Long-Term Care Decision

Post by willthrill81 » Mon Aug 05, 2019 9:41 am

WoW2012 wrote:
Sun Aug 04, 2019 11:00 pm
willthrill81 wrote:
Sun Aug 04, 2019 8:42 pm
WoW2012 wrote:
Sat Aug 03, 2019 3:50 pm
TomatoTomahto wrote:
Sat Aug 03, 2019 2:36 pm
WoW2012 wrote:
Sat Aug 03, 2019 2:30 pm

Umbrella policies do not require collision insurance. Do you know what I mean by collusion insurance?
I assume you meant collision not collusion. I guess umbrella covers you regardless of whether you have collision or not, but whatever, you still haven’t answered “at what NW level one can self insure?” Simple question. You divert as much as another famous ... never mind. Just answer the question please.
Decamillionaires insure their $100,000 car even though they can buy 100 similar new cars tomorrow.
Decamillionaires own long-term care insurance for the same reason when the benefits-to-premium comparison is a good value.
I never said that everyone should own long-term care insurance. I tell consumers every day to NOT buy long-term care insurance. It all depends upon how much value they can get based upon their current age and health.
That still doesn't answer the question.

Unless they are able to write off the premiums as a business expense, I've never seen a situation where it was in a decamillionaire's best financial interest to buy LTC insurance. Even if their LTC cost $200k annually, that would be a grand total of 2% of their assets (assuming exactly $10 million net worth). There's zero need for LTC insurance at such a level. And just because some decamillionaires engage in an activity like buying LTC insurance does not make it a wise decision; that's an appeal to wealth.
Then why do decamillionaires buy long-term care insurance?
I know several.
Because someone sold it to them.
“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: 4017
Joined: Mon Nov 07, 2016 10:51 am

Re: Long-Term Care Decision

Post by smitcat » Mon Aug 05, 2019 9:55 am

beyou wrote:
Mon Aug 05, 2019 9:39 am
TravelforFun wrote:
Sat Aug 03, 2019 11:02 am
Regarding LTC, why would we buy insurance to protect against our $300K home loss and hesitate to buy insurance to protect against our $300K LTC cost when the chance of us needing LTC is higher than the chance of us losing our entire home?

TravelforFun
Well I pay for home owners and not LTC and I think there is a huge difference.

1) I know about how much it would take to rebuild my home, and this risk is fully ensured.
I have no idea what the total lifetime cost is for LTC and therefore not sure how much to insure, and some policies will only sell you so much,
Insufficient for worst case scenarios. Isn't insurance to cover catastrophies, not prepaid expenses ? LTC Feels like a prepaid expense, like dental insurance.

2) I live close enough to the ocean, hurricanes are a realistic risk...I absolutely think the risk is higher than worst case nursing home care.
In fact we already had a major hurricane destroy many homes in my area years ago. I saw a neighbor with a tree that crushed his car and landed in his living room. How can you say the chance of losing your home is low ? Others face fires, tornadoes etc.

3) If my property insurer raises my rates, I can shop around every year. LTC insurers can raise your rates, but good luck shopping around when you are older. I have seen many had their rates raises after many years of paying when younger and healthier.

In summary, you have no idea what you will pay for LTC, but have limited coverage that will not cover a catastrophic loss.
For property insurance you know exactly what you are paying and the worst case is covered.

Similar logic for medical vs dental, one covers catastrophic losses and the other is prepaid care.
How many Bogleheads have medical vs dental from outside their employers ? If/when I leave my job (before Medicare)
I will continue with medical for sure but not dental most likely). If they ever improve dental and LTC to cover catastrophic losses at a reasonable cost, I am ready to buy both.
While I agree with most of what you say there are a few things you might want to consider regarding home insurance....
"I know about how much it would take to rebuild my home, and this risk is fully ensured."
You may rebuild you home but its value may be seriously affected by the entire areas loss in value, insurance will not cover that

"2) I live close enough to the ocean, hurricanes are a realistic risk..."
These rates can go up greatly and quickly for all carriers in a specific area, and have.

"3) If my property insurer raises my rates, I can shop around every year. "
In many cases all carriers serving a specific area either raise rates or do not write in that area

"Similar logic for medical vs dental, one covers catastrophic losses and the other is prepaid care.
Medical is now a tax not an insurance so similarities do not apply

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beyou
Posts: 2791
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: Long-Term Care Decision

Post by beyou » Mon Aug 05, 2019 11:02 am

How is medical insurance a tax ?

User avatar
beyou
Posts: 2791
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: Long-Term Care Decision

Post by beyou » Mon Aug 05, 2019 11:32 am

smitcat wrote:
Mon Aug 05, 2019 9:55 am
beyou wrote:
Mon Aug 05, 2019 9:39 am
TravelforFun wrote:
Sat Aug 03, 2019 11:02 am
Regarding LTC, why would we buy insurance to protect against our $300K home loss and hesitate to buy insurance to protect against our $300K LTC cost when the chance of us needing LTC is higher than the chance of us losing our entire home?

TravelforFun
Well I pay for home owners and not LTC and I think there is a huge difference.

1) I know about how much it would take to rebuild my home, and this risk is fully ensured.
I have no idea what the total lifetime cost is for LTC and therefore not sure how much to insure, and some policies will only sell you so much,
Insufficient for worst case scenarios. Isn't insurance to cover catastrophies, not prepaid expenses ? LTC Feels like a prepaid expense, like dental insurance.

2) I live close enough to the ocean, hurricanes are a realistic risk...I absolutely think the risk is higher than worst case nursing home care.
In fact we already had a major hurricane destroy many homes in my area years ago. I saw a neighbor with a tree that crushed his car and landed in his living room. How can you say the chance of losing your home is low ? Others face fires, tornadoes etc.

3) If my property insurer raises my rates, I can shop around every year. LTC insurers can raise your rates, but good luck shopping around when you are older. I have seen many had their rates raises after many years of paying when younger and healthier.

In summary, you have no idea what you will pay for LTC, but have limited coverage that will not cover a catastrophic loss.
For property insurance you know exactly what you are paying and the worst case is covered.

Similar logic for medical vs dental, one covers catastrophic losses and the other is prepaid care.
How many Bogleheads have medical vs dental from outside their employers ? If/when I leave my job (before Medicare)
I will continue with medical for sure but not dental most likely). If they ever improve dental and LTC to cover catastrophic losses at a reasonable cost, I am ready to buy both.
While I agree with most of what you say there are a few things you might want to consider regarding home insurance....
"I know about how much it would take to rebuild my home, and this risk is fully ensured."
You may rebuild you home but its value may be seriously affected by the entire areas loss in value, insurance will not cover that

"2) I live close enough to the ocean, hurricanes are a realistic risk..."
These rates can go up greatly and quickly for all carriers in a specific area, and have.

"3) If my property insurer raises my rates, I can shop around every year. "
In many cases all carriers serving a specific area either raise rates or do not write in that area

"Similar logic for medical vs dental, one covers catastrophic losses and the other is prepaid care.
Medical is now a tax not an insurance so similarities do not apply

See my question above on medical.

Regarding property, good points. But note I can move away if I really want to avoid the possible decline in value of my area due to a natural disaster. Hard to understand why people live in a flood plain and keep rebuilding but they do. Their choice. I live just far enough from the ocean, that my area has individual houses damaged during a hurricane but never the entire street (as opposed to just 20 miles away where entire neighborhoods where destroyed). Note for the most part, people want to live where I live and my property values have gone up despite this risk.
Regarding LTC, there is nowhere to run. Is there somewhere safer I can live to avoid the risk ? With property I can shop around for policies, or move to a lower risk area. With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most.

smitcat
Posts: 4017
Joined: Mon Nov 07, 2016 10:51 am

Re: Long-Term Care Decision

Post by smitcat » Mon Aug 05, 2019 11:41 am

beyou wrote:
Mon Aug 05, 2019 11:02 am
How is medical insurance a tax ?
When you purchase insurance the costs are related to the risk and mitigation of that risk on the insured based on losses.
In the past we had medical insurance that worked that same way ...now we have the ACA which is a tax.
Just some examples of the ACA tax vs insurance:
- more people under the ACA the rates drop , more cars it goes up
- healthy choices have no bearing on the ACA but safety features on cars and it goes down
- the ACA rates are also based on income and with cars income does not matter

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willthrill81
Posts: 13186
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Long-Term Care Decision

Post by willthrill81 » Mon Aug 05, 2019 11:42 am

beyou wrote:
Mon Aug 05, 2019 11:32 am
With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most.
Many states have now imposed limits on how much insurers can increase LTC insurance premiums. But there seem to me to be a fairly narrow window with regard to your age when your health is still good enough to buy LTC and it can be purchased for a somewhat reasonable price, age 55-60. Beyond that, the premiums increase sharply and/or your health is likely to degrade to the point that you cannot buy it at all. You then have to weigh whether it's worthwhile to own LTC for a 10-15 year period when 95.5% of LTC insurance claims don't begin until the claimant is at least age 70, according to the American Association for Long-Term Care Insurance.
“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: 4017
Joined: Mon Nov 07, 2016 10:51 am

Re: Long-Term Care Decision

Post by smitcat » Mon Aug 05, 2019 11:46 am

beyou wrote:
Mon Aug 05, 2019 11:32 am
smitcat wrote:
Mon Aug 05, 2019 9:55 am
beyou wrote:
Mon Aug 05, 2019 9:39 am
TravelforFun wrote:
Sat Aug 03, 2019 11:02 am
Regarding LTC, why would we buy insurance to protect against our $300K home loss and hesitate to buy insurance to protect against our $300K LTC cost when the chance of us needing LTC is higher than the chance of us losing our entire home?

TravelforFun
Well I pay for home owners and not LTC and I think there is a huge difference.

1) I know about how much it would take to rebuild my home, and this risk is fully ensured.
I have no idea what the total lifetime cost is for LTC and therefore not sure how much to insure, and some policies will only sell you so much,
Insufficient for worst case scenarios. Isn't insurance to cover catastrophies, not prepaid expenses ? LTC Feels like a prepaid expense, like dental insurance.

2) I live close enough to the ocean, hurricanes are a realistic risk...I absolutely think the risk is higher than worst case nursing home care.
In fact we already had a major hurricane destroy many homes in my area years ago. I saw a neighbor with a tree that crushed his car and landed in his living room. How can you say the chance of losing your home is low ? Others face fires, tornadoes etc.

3) If my property insurer raises my rates, I can shop around every year. LTC insurers can raise your rates, but good luck shopping around when you are older. I have seen many had their rates raises after many years of paying when younger and healthier.

In summary, you have no idea what you will pay for LTC, but have limited coverage that will not cover a catastrophic loss.
For property insurance you know exactly what you are paying and the worst case is covered.

Similar logic for medical vs dental, one covers catastrophic losses and the other is prepaid care.
How many Bogleheads have medical vs dental from outside their employers ? If/when I leave my job (before Medicare)
I will continue with medical for sure but not dental most likely). If they ever improve dental and LTC to cover catastrophic losses at a reasonable cost, I am ready to buy both.
While I agree with most of what you say there are a few things you might want to consider regarding home insurance....
"I know about how much it would take to rebuild my home, and this risk is fully ensured."
You may rebuild you home but its value may be seriously affected by the entire areas loss in value, insurance will not cover that

"2) I live close enough to the ocean, hurricanes are a realistic risk..."
These rates can go up greatly and quickly for all carriers in a specific area, and have.

"3) If my property insurer raises my rates, I can shop around every year. "
In many cases all carriers serving a specific area either raise rates or do not write in that area

"Similar logic for medical vs dental, one covers catastrophic losses and the other is prepaid care.
Medical is now a tax not an insurance so similarities do not apply

See my question above on medical.

Regarding property, good points. But note I can move away if I really want to avoid the possible decline in value of my area due to a natural disaster. Hard to understand why people live in a flood plain and keep rebuilding but they do. Their choice. I live just far enough from the ocean, that my area has individual houses damaged during a hurricane but never the entire street (as opposed to just 20 miles away where entire neighborhoods where destroyed). Note for the most part, people want to live where I live and my property values have gone up despite this risk.
Regarding LTC, there is nowhere to run. Is there somewhere safer I can live to avoid the risk ? With property I can shop around for policies, or move to a lower risk area. With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most.
"Note for the most part, people want to live where I live and my property values have gone up despite this risk."
And some areas have gone down due to the resultant affects.

"Regarding LTC, there is nowhere to run. Is there somewhere safer I can live to avoid the risk ?"
Other countries

"With property I can shop around for policies, or move to a lower risk area."
Assuming you dump the property you have now at the then value.

"With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most."
Their are limits and laws in place to keep this within the parameters of what you purchase at the time. Our policies have them and they have not risen more than other insurances.

smitcat
Posts: 4017
Joined: Mon Nov 07, 2016 10:51 am

Re: Long-Term Care Decision

Post by smitcat » Mon Aug 05, 2019 11:56 am

willthrill81 wrote:
Mon Aug 05, 2019 11:42 am
beyou wrote:
Mon Aug 05, 2019 11:32 am
With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most.
Many states have now imposed limits on how much insurers can increase LTC insurance premiums. But there seem to me to be a fairly narrow window with regard to your age when your health is still good enough to buy LTC and it can be purchased for a somewhat reasonable price, age 55-60. Beyond that, the premiums increase sharply and/or your health is likely to degrade to the point that you cannot buy it at all. You then have to weigh whether it's worthwhile to own LTC for a 10-15 year period when 95.5% of LTC insurance claims don't begin until the claimant is at least age 70, according to the American Association for Long-Term Care Insurance.
Hello Widthrill81,
If I read this right the data seems to chart when claims begin on LTCi policies.
If you did not have LTCi until a later age the claims could not have occurred earlier - correct?

User avatar
willthrill81
Posts: 13186
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Long-Term Care Decision

Post by willthrill81 » Mon Aug 05, 2019 12:10 pm

smitcat wrote:
Mon Aug 05, 2019 11:56 am
willthrill81 wrote:
Mon Aug 05, 2019 11:42 am
beyou wrote:
Mon Aug 05, 2019 11:32 am
With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most.
Many states have now imposed limits on how much insurers can increase LTC insurance premiums. But there seem to me to be a fairly narrow window with regard to your age when your health is still good enough to buy LTC and it can be purchased for a somewhat reasonable price, age 55-60. Beyond that, the premiums increase sharply and/or your health is likely to degrade to the point that you cannot buy it at all. You then have to weigh whether it's worthwhile to own LTC for a 10-15 year period when 95.5% of LTC insurance claims don't begin until the claimant is at least age 70, according to the American Association for Long-Term Care Insurance.
Hello Widthrill81,
If I read this right the data seems to chart when claims begin on LTCi policies.
If you did not have LTCi until a later age the claims could not have occurred earlier - correct?
Correct, although WoW2012 has said the following.
WoW2012 wrote:
Mon Jul 29, 2019 9:01 pm
Very few people at the age of 70 are healthy enough to qualify for long-term care insurance.
“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: 4017
Joined: Mon Nov 07, 2016 10:51 am

Re: Long-Term Care Decision

Post by smitcat » Mon Aug 05, 2019 12:15 pm

willthrill81 wrote:
Mon Aug 05, 2019 12:10 pm
smitcat wrote:
Mon Aug 05, 2019 11:56 am
willthrill81 wrote:
Mon Aug 05, 2019 11:42 am
beyou wrote:
Mon Aug 05, 2019 11:32 am
With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most.
Many states have now imposed limits on how much insurers can increase LTC insurance premiums. But there seem to me to be a fairly narrow window with regard to your age when your health is still good enough to buy LTC and it can be purchased for a somewhat reasonable price, age 55-60. Beyond that, the premiums increase sharply and/or your health is likely to degrade to the point that you cannot buy it at all. You then have to weigh whether it's worthwhile to own LTC for a 10-15 year period when 95.5% of LTC insurance claims don't begin until the claimant is at least age 70, according to the American Association for Long-Term Care Insurance.
Hello Widthrill81,
If I read this right the data seems to chart when claims begin on LTCi policies.
If you did not have LTCi until a later age the claims could not have occurred earlier - correct?
Correct, although WoW2012 has said the following.
WoW2012 wrote:
Mon Jul 29, 2019 9:01 pm
Very few people at the age of 70 are healthy enough to qualify for long-term care insurance.
I have not seen any reliable data for folks that require long term care either early or later in life.

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

Re: Long-Term Care Decision

Post by WoW2012 » Mon Aug 05, 2019 12:22 pm

Ben Mathew wrote:
Mon Aug 05, 2019 8:43 am

Current premium is $3,584. But assume premium will double to $7168 (nominal) 15 years into the policy.

If LTCi policies available for sale today had the same pricing regulations and methods as policies sold 20 years ago, then your assumption would be correct.

Today's policies will not have the same rate increases as the old policies because the old rate increases are ALREADY INCLUDED in the new pricing.

For an insurance company to be allowed to sell a new long-term care policy today, the new policy must include all of the company’s prior rate increases in the new pricing, and include an additional “cushion” (about 10% to 15%) as extra protection from future rate increases.

In 41 states, if they seek a rate increase on these newer policies they have to reduce their profits! There's no longer a profit incentive in rate increases. That's why today's policies are priced so much higher than the older policies because the insurers don't want any rate increases on these new policies because they don't want to reduce their profits in the future if they seek a rate increase.

User avatar
beyou
Posts: 2791
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Location: Northeastern US

Re: Long-Term Care Decision

Post by beyou » Mon Aug 05, 2019 12:24 pm

willthrill81 wrote:
Mon Aug 05, 2019 11:42 am
beyou wrote:
Mon Aug 05, 2019 11:32 am
With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most.
Many states have now imposed limits on how much insurers can increase LTC insurance premiums. But there seem to me to be a fairly narrow window with regard to your age when your health is still good enough to buy LTC and it can be purchased for a somewhat reasonable price, age 55-60. Beyond that, the premiums increase sharply and/or your health is likely to degrade to the point that you cannot buy it at all. You then have to weigh whether it's worthwhile to own LTC for a 10-15 year period when 95.5% of LTC insurance claims don't begin until the claimant is at least age 70, according to the American Association for Long-Term Care Insurance.
No I will not pay for 10-15 years. For every anecdote here that says "they haven't raised mine much, I see others who had such huge raises, they are given the choice of cutting already low benefits even lower or they can't afford to keep what they had in place when they didn't need it (55-70).
At 70 you need it and have spent down some of your assets, and the cost can suddenly rise. Yes states have to approve the rate increase, but they have done so regularly in the recent past.

To me there is just as much chance of my house burning today or going to the hospital today as there is in 15 years.
But there is little chance I need LTC now, but I have to pay now and for 1-2 decades before I need it ?
And with state gov officials allowing rate increases all the while ? And no catastrophic coverage for worst case needs.
Seems like a very different decision from most other forms of insurance. I have bought good coverage for all other things I felt needed insurance,
but not this. I want insurance but the policies seem overpriced and will under-deliver.

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Re: Long-Term Care Decision

Post by WoW2012 » Mon Aug 05, 2019 12:32 pm

beyou wrote:
Mon Aug 05, 2019 12:24 pm


No I will not pay for 10-15 years. For every anecdote here that says "they haven't raised mine much, I see others who had such huge raises, they are given the choice of cutting already low benefits even lower or they can't afford to keep what they had in place when they didn't need it (55-70).
At 70 you need it and have spent down some of your assets, and the cost can suddenly rise. Yes states have to approve the rate increase, but they have done so regularly in the recent past.
Beyou: At 70 you need it and have spent down some of your assets, and the cost can suddenly rise.
Wow: That is false. Rates canNOT increase based upon your age. If a 70-year old gets a rate increase, that rate increase was shared with everyone who purchased that same policy regardless of their age.

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beyou
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Re: Long-Term Care Decision

Post by beyou » Mon Aug 05, 2019 12:57 pm

WoW2012 wrote:
Mon Aug 05, 2019 12:32 pm
beyou wrote:
Mon Aug 05, 2019 12:24 pm


No I will not pay for 10-15 years. For every anecdote here that says "they haven't raised mine much, I see others who had such huge raises, they are given the choice of cutting already low benefits even lower or they can't afford to keep what they had in place when they didn't need it (55-70).
At 70 you need it and have spent down some of your assets, and the cost can suddenly rise. Yes states have to approve the rate increase, but they have done so regularly in the recent past.
Beyou: At 70 you need it and have spent down some of your assets, and the cost can suddenly rise.
Wow: That is false. Rates canNOT increase based upon your age. If a 70-year old gets a rate increase, that rate increase was shared with everyone who purchased that same policy regardless of their age.
You are being too literal. Yes I know rates are not age specific. But there are many in their 70s and up who bought policies years earlier, have been on a fixed budget for many years, and this is one of the biggest sources of cost increases. Yes it's shared by all policy holders, but the younger ones are still working and can better afford what they don't perceive they need, and the older ones who need it perceive they can't afford it. Classic case of a death spiral of a situation.

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Re: Long-Term Care Decision

Post by WoW2012 » Mon Aug 05, 2019 1:01 pm

beyou wrote:
Mon Aug 05, 2019 12:57 pm

You are being too literal. Yes I know rates are not age specific. But there are many in their 70s and up who bought policies years earlier, have been on a fixed budget for many years, and this is one of the biggest sources of cost increases. Yes it's shared by all policy holders, but the younger ones are still working and can better afford what they don't perceive they need, and the older ones who need it perceive they can't afford it. Classic case of a death spiral of a situation.
If it's a classic case of a death spiral, then why has no long-term care insurer ever experienced a death spiral?
Less than 5% of LTCi policyholders drop their policy after a rate increase.

And, please, keep in mind, we're talking about someone buying a policy TODAY, not 20 years ago.
Policies for sale today have very different rules and pricing regulations from the policies that had the huge rate increases.

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Re: Long-Term Care Decision

Post by ncbill » Mon Aug 05, 2019 1:15 pm

willthrill81 wrote:
Mon Aug 05, 2019 11:42 am
beyou wrote:
Mon Aug 05, 2019 11:32 am
With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most.
Many states have now imposed limits on how much insurers can increase LTC insurance premiums. But there seem to me to be a fairly narrow window with regard to your age when your health is still good enough to buy LTC and it can be purchased for a somewhat reasonable price, age 55-60. Beyond that, the premiums increase sharply and/or your health is likely to degrade to the point that you cannot buy it at all. You then have to weigh whether it's worthwhile to own LTC for a 10-15 year period when 95.5% of LTC insurance claims don't begin until the claimant is at least age 70, according to the American Association for Long-Term Care Insurance.
Maybe that's the reason for the popularity of hybrid plans, even though they are more expensive...a lump-sum payment (or a fixed premium for a decade) then no additional payments...IIRC, it may be easier to medically qualify for a hybrid as well.

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Re: Long-Term Care Decision

Post by smitcat » Mon Aug 05, 2019 1:50 pm

beyou wrote:
Mon Aug 05, 2019 12:57 pm
WoW2012 wrote:
Mon Aug 05, 2019 12:32 pm
beyou wrote:
Mon Aug 05, 2019 12:24 pm


No I will not pay for 10-15 years. For every anecdote here that says "they haven't raised mine much, I see others who had such huge raises, they are given the choice of cutting already low benefits even lower or they can't afford to keep what they had in place when they didn't need it (55-70).
At 70 you need it and have spent down some of your assets, and the cost can suddenly rise. Yes states have to approve the rate increase, but they have done so regularly in the recent past.
Beyou: At 70 you need it and have spent down some of your assets, and the cost can suddenly rise.
Wow: That is false. Rates canNOT increase based upon your age. If a 70-year old gets a rate increase, that rate increase was shared with everyone who purchased that same policy regardless of their age.
You are being too literal. Yes I know rates are not age specific. But there are many in their 70s and up who bought policies years earlier, have been on a fixed budget for many years, and this is one of the biggest sources of cost increases. Yes it's shared by all policy holders, but the younger ones are still working and can better afford what they don't perceive they need, and the older ones who need it perceive they can't afford it. Classic case of a death spiral of a situation.
"but the younger ones are still working and can better afford what they don't perceive they need, and the older ones who need it perceive they can't afford it. Classic case of a death spiral of a situation."
Interestingly we bought our policies mostly for when we were younger and could not afford a LTC event before we had enough saved and would not be working. In our view long term care costs you more when you are young and need both the care and the paycheck is affected before you have saved enough in life.

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Re: Long-Term Care Decision

Post by beyou » Mon Aug 05, 2019 1:59 pm

ncbill wrote:
Mon Aug 05, 2019 1:15 pm
willthrill81 wrote:
Mon Aug 05, 2019 11:42 am
beyou wrote:
Mon Aug 05, 2019 11:32 am
With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most.
Many states have now imposed limits on how much insurers can increase LTC insurance premiums. But there seem to me to be a fairly narrow window with regard to your age when your health is still good enough to buy LTC and it can be purchased for a somewhat reasonable price, age 55-60. Beyond that, the premiums increase sharply and/or your health is likely to degrade to the point that you cannot buy it at all. You then have to weigh whether it's worthwhile to own LTC for a 10-15 year period when 95.5% of LTC insurance claims don't begin until the claimant is at least age 70, according to the American Association for Long-Term Care Insurance.
Maybe that's the reason for the popularity of hybrid plans, even though they are more expensive...a lump-sum payment (or a fixed premium for a decade) then no additional payments...IIRC, it may be easier to medically qualify for a hybrid as well.
I checked out this option, hoping it was better than traditional policies. Well documented that few carriers remain for traditional policies, but there are even fewer selling the hybrid polices. In my state I think there are 1 or 2 carriers. Can't be competitive.

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Re: Long-Term Care Decision

Post by willthrill81 » Mon Aug 05, 2019 2:57 pm

smitcat wrote:
Mon Aug 05, 2019 12:15 pm
willthrill81 wrote:
Mon Aug 05, 2019 12:10 pm
smitcat wrote:
Mon Aug 05, 2019 11:56 am
willthrill81 wrote:
Mon Aug 05, 2019 11:42 am
beyou wrote:
Mon Aug 05, 2019 11:32 am
With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most.
Many states have now imposed limits on how much insurers can increase LTC insurance premiums. But there seem to me to be a fairly narrow window with regard to your age when your health is still good enough to buy LTC and it can be purchased for a somewhat reasonable price, age 55-60. Beyond that, the premiums increase sharply and/or your health is likely to degrade to the point that you cannot buy it at all. You then have to weigh whether it's worthwhile to own LTC for a 10-15 year period when 95.5% of LTC insurance claims don't begin until the claimant is at least age 70, according to the American Association for Long-Term Care Insurance.
Hello Widthrill81,
If I read this right the data seems to chart when claims begin on LTCi policies.
If you did not have LTCi until a later age the claims could not have occurred earlier - correct?
Correct, although WoW2012 has said the following.
WoW2012 wrote:
Mon Jul 29, 2019 9:01 pm
Very few people at the age of 70 are healthy enough to qualify for long-term care insurance.
I have not seen any reliable data for folks that require long term care either early or later in life.
I've not been able to find much either. This table comes from the Congressional Budget Office's 2014 report on LTC.
Image
https://www.cbo.gov/sites/default/files ... 63-ltc.pdf

That and the AALCI report I linked to above is all I can find for when people consume LTC, and both of those only apply to LTC provided in facilities.
“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 Decision

Post by WoW2012 » Mon Aug 05, 2019 3:10 pm

beyou wrote:
Mon Aug 05, 2019 1:59 pm

I checked out this option, hoping it was better than traditional policies. Well documented that few carriers remain for traditional policies, but there are even fewer selling the hybrid polices. In my state I think there are 1 or 2 carriers. Can't be competitive.
You're correct that hybrids are rarely a better value than traditional long-term care insurance.

There are 13 different companies selling traditional long-term care insurance (NOT including the fraternal organizations or the self-funded groups).

There are 5 companies that sell real hybrids. (There are dozens that sell "fake hybrids").

If you live in NY, cut those numbers in half.

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Re: Long-Term Care Decision

Post by willthrill81 » Mon Aug 05, 2019 3:11 pm

ncbill wrote:
Mon Aug 05, 2019 1:15 pm
willthrill81 wrote:
Mon Aug 05, 2019 11:42 am
beyou wrote:
Mon Aug 05, 2019 11:32 am
With LTC you buy and no matter what you do, you can have your rates raised to the point of not being affordable when you need it most.
Many states have now imposed limits on how much insurers can increase LTC insurance premiums. But there seem to me to be a fairly narrow window with regard to your age when your health is still good enough to buy LTC and it can be purchased for a somewhat reasonable price, age 55-60. Beyond that, the premiums increase sharply and/or your health is likely to degrade to the point that you cannot buy it at all. You then have to weigh whether it's worthwhile to own LTC for a 10-15 year period when 95.5% of LTC insurance claims don't begin until the claimant is at least age 70, according to the American Association for Long-Term Care Insurance.
Maybe that's the reason for the popularity of hybrid plans, even though they are more expensive...a lump-sum payment (or a fixed premium for a decade) then no additional payments...IIRC, it may be easier to medically qualify for a hybrid as well.
Part of the issue is that 'hybrid plans' are really 'whole life insurance policies with LTC riders'. Poster nisiprius said the following about it, which I believe sums up both hybrid plans and LTC in general very well.
nisiprius wrote:
Mon Aug 28, 2017 2:32 pm
I'm going to give an honest but somewhat flip answer. We have "real" LTCi which we bought some years ago when things were more favorable than they are now. I don't have any very good answers on LTCi today.

The whole-life-insurance-with-LTC-rider makes no sense at all to me, and here's my reasoning. Most people don't need whole life insurance at all. If you need whole life insurance, presumably you have a good, coherent reason why you need the death benefit. If you don't need the death benefit, then you shouldn't be buying whole life insurance at all.

Now, the policy probably says clearly on it that the LTC rider is not long-term-care insurance. The insurance company isn't really taking any risk. All they are doing is giving you permission to raid the death benefit in advance of death. But we have already said you shouldn't buy the policy if you don't need the death benefit, and if you have an LTC rider and you raid the death benefit, then it won't be there when you need it. The money you spent on LTC comes out of the death benefit.

The question you need to ask is: if it's OK with me if the bad luck of my needing long-term care deprives my beneficiaries of, say, half the death benefit, why did I think I needed that big a death benefit in the first place?

There's no easy answer on long-term care. It's a very unpleasant thing and a very unpleasant product. It's very expensive because the risk of using it is large, much larger than the risk of a house fire. There's no cheap way to deal with it. Anything that looks like an easy, cheap, convenient alternative has got to have gotchas.
“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 Decision

Post by WoW2012 » Mon Aug 05, 2019 3:29 pm

willthrill81 wrote:
Mon Aug 05, 2019 3:11 pm

nisiprius wrote:
Mon Aug 28, 2017 2:32 pm
I'm going to give an honest but somewhat flip answer. We have "real" LTCi which we bought some years ago when things were more favorable than they are now. I don't have any very good answers on LTCi today.

The whole-life-insurance-with-LTC-rider makes no sense at all to me, and here's my reasoning. Most people don't need whole life insurance at all. If you need whole life insurance, presumably you have a good, coherent reason why you need the death benefit. If you don't need the death benefit, then you shouldn't be buying whole life insurance at all.

Now, the policy probably says clearly on it that the LTC rider is not long-term-care insurance. The insurance company isn't really taking any risk. All they are doing is giving you permission to raid the death benefit in advance of death. But we have already said you shouldn't buy the policy if you don't need the death benefit, and if you have an LTC rider and you raid the death benefit, then it won't be there when you need it. The money you spent on LTC comes out of the death benefit.

The question you need to ask is: if it's OK with me if the bad luck of my needing long-term care deprives my beneficiaries of, say, half the death benefit, why did I think I needed that big a death benefit in the first place?

There's no easy answer on long-term care. It's a very unpleasant thing and a very unpleasant product. It's very expensive because the risk of using it is large, much larger than the risk of a house fire. There's no cheap way to deal with it. Anything that looks like an easy, cheap, convenient alternative has got to have gotchas.

I'm not a fan of hybrids, but nisiprius explanation is seriously flawed.
nisiprius wrote:
Mon Aug 28, 2017 2:32 pm
I'm going to give an honest but somewhat flip answer. We have "real" LTCi which we bought some years ago when things were more favorable than they are now. I don't have any very good answers on LTCi today.
WOW: LTCi policies available for sale today are better than the policies sold 20 years ago. Today's policies offer asset protection from Medicaid even if the policy runs out of benefits. New policies also contain strict pricing regulations to prevent the kinds of rate increases the older policies had.

The whole-life-insurance-with-LTC-rider makes no sense at all to me, and here's my reasoning. Most people don't need whole life insurance at all. If you need whole life insurance, presumably you have a good, coherent reason why you need the death benefit. If you don't need the death benefit, then you shouldn't be buying whole life insurance at all.
Wow: No one buys these whole life policies with LTC riders for the death benefit. Everyone who buys it buys it solely for the LTC insurance protection.

Now, the policy probably says clearly on it that the LTC rider is not long-term-care insurance.
Wow: The best hybrid has an LTC rider which IS long-term care insurance and specifically states it is. The LTC rider has tax-free benefits and tax-deductible premium, just like traditional LTC insurance. And this policy is not new. It's been around for about 30 years.


The insurance company isn't really taking any risk. All they are doing is giving you permission to raid the death benefit in advance of death.
WOW: Incorrect. The best hybrids (and there are 5 of them) have long-term care benefits that are significantly larger than the death benefit. One of them has unlimited long-term care benefits.


But we have already said you shouldn't buy the policy if you don't need the death benefit, and if you have an LTC rider and you raid the death benefit, then it won't be there when you need it. The money you spent on LTC comes out of the death benefit.
Wow: This is correct. But nobody buys hybrids for the death benefit. Everyone buys it for LTCi benefits.


The question you need to ask is: if it's OK with me if the bad luck of my needing long-term care deprives my beneficiaries of, say, half the death benefit, why did I think I needed that big a death benefit in the first place?
Wow: Again, nobody buys hybrids for the death benefit. Everyone buys it for LTCi benefits.


There's no easy answer on long-term care. It's a very unpleasant thing and a very unpleasant product. It's very expensive because the risk of using it is large, much larger than the risk of a house fire.
Wow: The most cost-effective way to plan for long-term care is with a long-term care partnership policy IF you're young enough and healthy enough to get a worthwhile policy.


There's no cheap way to deal with it. Anything that looks like an easy, cheap, convenient alternative has got to have gotchas.
Wow: True.

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ResearchMed
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Re: Long-Term Care Decision

Post by ResearchMed » Mon Aug 05, 2019 6:41 pm

WoW2012 wrote:
Mon Aug 05, 2019 3:29 pm
willthrill81 wrote:
Mon Aug 05, 2019 3:11 pm

nisiprius wrote:
Mon Aug 28, 2017 2:32 pm
I'm going to give an honest but somewhat flip answer. We have "real" LTCi which we bought some years ago when things were more favorable than they are now. I don't have any very good answers on LTCi today.

The whole-life-insurance-with-LTC-rider makes no sense at all to me, and here's my reasoning. Most people don't need whole life insurance at all. If you need whole life insurance, presumably you have a good, coherent reason why you need the death benefit. If you don't need the death benefit, then you shouldn't be buying whole life insurance at all.

Now, the policy probably says clearly on it that the LTC rider is not long-term-care insurance. The insurance company isn't really taking any risk. All they are doing is giving you permission to raid the death benefit in advance of death. But we have already said you shouldn't buy the policy if you don't need the death benefit, and if you have an LTC rider and you raid the death benefit, then it won't be there when you need it. The money you spent on LTC comes out of the death benefit.

The question you need to ask is: if it's OK with me if the bad luck of my needing long-term care deprives my beneficiaries of, say, half the death benefit, why did I think I needed that big a death benefit in the first place?

There's no easy answer on long-term care. It's a very unpleasant thing and a very unpleasant product. It's very expensive because the risk of using it is large, much larger than the risk of a house fire. There's no cheap way to deal with it. Anything that looks like an easy, cheap, convenient alternative has got to have gotchas.

I'm not a fan of hybrids, but nisiprius explanation is seriously flawed.
nisiprius wrote:
Mon Aug 28, 2017 2:32 pm
I'm going to give an honest but somewhat flip answer. We have "real" LTCi which we bought some years ago when things were more favorable than they are now. I don't have any very good answers on LTCi today.
WOW: LTCi policies available for sale today are better than the policies sold 20 years ago. Today's policies offer asset protection from Medicaid even if the policy runs out of benefits. New policies also contain strict pricing regulations to prevent the kinds of rate increases the older policies had.

RM: This is NOT true for all policies, and indeed, in some states, there are NO such policies.
WoW2012 gave a list of states that do not have this arrangement at all, just a few days ago.


The whole-life-insurance-with-LTC-rider makes no sense at all to me, and here's my reasoning. Most people don't need whole life insurance at all. If you need whole life insurance, presumably you have a good, coherent reason why you need the death benefit. If you don't need the death benefit, then you shouldn't be buying whole life insurance at all.
Wow: No one buys these whole life policies with LTC riders for the death benefit. Everyone who buys it buys it solely for the LTC insurance protection.

RM: How do you know this? How do you know how well *everyone" who buys these even understands them, or what their own personal rationales are?


Now, the policy probably says clearly on it that the LTC rider is not long-term-care insurance.
Wow: The best hybrid has an LTC rider which IS long-term care insurance and specifically states it is. The LTC rider has tax-free benefits and tax-deductible premium, just like traditional LTC insurance. And this policy is not new. It's been around for about 30 years.


The insurance company isn't really taking any risk. All they are doing is giving you permission to raid the death benefit in advance of death.
WOW: Incorrect. The best hybrids (and there are 5 of them) have long-term care benefits that are significantly larger than the death benefit. One of them has unlimited long-term care benefits.

RM: Are all of these policies available in each of the 50 states? How many states do have all five of these available for purchase? How many states have an "unlimited policy" available?

But we have already said you shouldn't buy the policy if you don't need the death benefit, and if you have an LTC rider and you raid the death benefit, then it won't be there when you need it. The money you spent on LTC comes out of the death benefit.
Wow: This is correct. But nobody buys hybrids for the death benefit. Everyone buys it for LTCi benefits.


The question you need to ask is: if it's OK with me if the bad luck of my needing long-term care deprives my beneficiaries of, say, half the death benefit, why did I think I needed that big a death benefit in the first place?
Wow: Again, nobody buys hybrids for the death benefit. Everyone buys it for LTCi benefits.


There's no easy answer on long-term care. It's a very unpleasant thing and a very unpleasant product. It's very expensive because the risk of using it is large, much larger than the risk of a house fire.
Wow: The most cost-effective way to plan for long-term care is with a long-term care partnership policy IF you're young enough and healthy enough to get a worthwhile policy.


There's no cheap way to deal with it. Anything that looks like an easy, cheap, convenient alternative has got to have gotchas.
Wow: True.
This signature is a placebo. You are in the control group.

WoW2012
Posts: 584
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Re: Long-Term Care Decision

Post by WoW2012 » Mon Aug 05, 2019 9:36 pm

ResearchMed wrote:
Mon Aug 05, 2019 6:41 pm
WoW2012 wrote:
Mon Aug 05, 2019 3:29 pm
willthrill81 wrote:
Mon Aug 05, 2019 3:11 pm

nisiprius wrote:
Mon Aug 28, 2017 2:32 pm
I'm going to give an honest but somewhat flip answer. We have "real" LTCi which we bought some years ago when things were more favorable than they are now. I don't have any very good answers on LTCi today.

The whole-life-insurance-with-LTC-rider makes no sense at all to me, and here's my reasoning. Most people don't need whole life insurance at all. If you need whole life insurance, presumably you have a good, coherent reason why you need the death benefit. If you don't need the death benefit, then you shouldn't be buying whole life insurance at all.

Now, the policy probably says clearly on it that the LTC rider is not long-term-care insurance. The insurance company isn't really taking any risk. All they are doing is giving you permission to raid the death benefit in advance of death. But we have already said you shouldn't buy the policy if you don't need the death benefit, and if you have an LTC rider and you raid the death benefit, then it won't be there when you need it. The money you spent on LTC comes out of the death benefit.

The question you need to ask is: if it's OK with me if the bad luck of my needing long-term care deprives my beneficiaries of, say, half the death benefit, why did I think I needed that big a death benefit in the first place?

There's no easy answer on long-term care. It's a very unpleasant thing and a very unpleasant product. It's very expensive because the risk of using it is large, much larger than the risk of a house fire. There's no cheap way to deal with it. Anything that looks like an easy, cheap, convenient alternative has got to have gotchas.

I'm not a fan of hybrids, but nisiprius explanation is seriously flawed.
nisiprius wrote:
Mon Aug 28, 2017 2:32 pm
I'm going to give an honest but somewhat flip answer. We have "real" LTCi which we bought some years ago when things were more favorable than they are now. I don't have any very good answers on LTCi today.
WOW: LTCi policies available for sale today are better than the policies sold 20 years ago. Today's policies offer asset protection from Medicaid even if the policy runs out of benefits. New policies also contain strict pricing regulations to prevent the kinds of rate increases the older policies had.

RM: This is NOT true for all policies, and indeed, in some states, there are NO such policies.
WoW2012 gave a list of states that do not have this arrangement at all, just a few days ago.


The whole-life-insurance-with-LTC-rider makes no sense at all to me, and here's my reasoning. Most people don't need whole life insurance at all. If you need whole life insurance, presumably you have a good, coherent reason why you need the death benefit. If you don't need the death benefit, then you shouldn't be buying whole life insurance at all.
Wow: No one buys these whole life policies with LTC riders for the death benefit. Everyone who buys it buys it solely for the LTC insurance protection.

RM: How do you know this? How do you know how well *everyone" who buys these even understands them, or what their own personal rationales are?


Now, the policy probably says clearly on it that the LTC rider is not long-term-care insurance.
Wow: The best hybrid has an LTC rider which IS long-term care insurance and specifically states it is. The LTC rider has tax-free benefits and tax-deductible premium, just like traditional LTC insurance. And this policy is not new. It's been around for about 30 years.


The insurance company isn't really taking any risk. All they are doing is giving you permission to raid the death benefit in advance of death.
WOW: Incorrect. The best hybrids (and there are 5 of them) have long-term care benefits that are significantly larger than the death benefit. One of them has unlimited long-term care benefits.

RM: Are all of these policies available in each of the 50 states? How many states do have all five of these available for purchase? How many states have an "unlimited policy" available?

But we have already said you shouldn't buy the policy if you don't need the death benefit, and if you have an LTC rider and you raid the death benefit, then it won't be there when you need it. The money you spent on LTC comes out of the death benefit.
Wow: This is correct. But nobody buys hybrids for the death benefit. Everyone buys it for LTCi benefits.


The question you need to ask is: if it's OK with me if the bad luck of my needing long-term care deprives my beneficiaries of, say, half the death benefit, why did I think I needed that big a death benefit in the first place?
Wow: Again, nobody buys hybrids for the death benefit. Everyone buys it for LTCi benefits.


There's no easy answer on long-term care. It's a very unpleasant thing and a very unpleasant product. It's very expensive because the risk of using it is large, much larger than the risk of a house fire.
Wow: The most cost-effective way to plan for long-term care is with a long-term care partnership policy IF you're young enough and healthy enough to get a worthwhile policy.


There's no cheap way to deal with it. Anything that looks like an easy, cheap, convenient alternative has got to have gotchas.
Wow: True.
RM: This is NOT true for all policies, and indeed, in some states, there are NO such policies.
WoW2012 gave a list of states that do not have this arrangement at all, just a few days ago.

I stand corrected. I apologize to the less than 2% of the population of the United States that lives in Vermont, Alaska, Hawaii, or Mississippi. If you live in one of those 4 states you canNOT buy a long-term care partnership policy. If you live in Mass. you can buy their unique version of a long-term care partnership policy, but it's not as good as what's available in the 45 other states that offer long-term care partnership policies.
I stand corrected that only 41 states have a Rate Stability Regulation. However, the 9 states that do NOT have the Rate Stability Regulation still require long-term care insurers to price their new policies using the most recent claims data, reducing the risk of future rate increases. Regulators don't want rate increases. Rate increases are a PITA for regulators.



RM: How do you know this? How do you know how well *everyone" who buys these even understands them, or what their own personal rationales are?
I stand corrected. I can't read minds. But I do have common sense. If someone just wanted a life insurance death benefit they wouldn't waste their money on a hybrid because hybrids are OVERPRICED life insurance policies. They could buy A LOT MORE death benefit for less premium if they just bought life insurance rather than a hybrid.


RM: Are all of these policies available in each of the 50 states? How many states do have all five of these available for purchase? How many states have an "unlimited policy" available?

4 of the 5 real hybrids are available in all 50 states.

There is only 1 hybrid that has an unlimited benefit period. It is available in 49 states.
There are 3 traditional LTCi policies that offer unlimited benefit periods.
One of them is available in all 50 states and one in 47 states.

There's really no need to have an unlimited benefit period, especially if you and your spouse/partner share policies.

Most companies allow spouses to share 10 to 15 years of benefits.

And a long-term care partnership policy essentially is an unlimited benefit period (because Medicaid is the back stop that never runs out.)

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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Mon Aug 05, 2019 10:04 pm

WoW2012 wrote:
Mon Aug 05, 2019 9:36 pm
And a long-term care partnership policy essentially is an unlimited benefit period (because Medicaid is the back stop that never runs out.)
You've mentioned LTC partnership policies many times, but it doesn't seem to correspond with the disdain you've shown in many posts toward Medicaid. Based on my understanding of this program, it protects your assets from Medicaid's reach, but if you need care in a facility, it must be one that will accept Medicaid, and you've repeatedly eschewed that backstop. Would you explain your position on this?

For the benefit of others, this is the federal web site that provides information about this program. Considering that a nursing home in our area runs around $100k, I would want at least a $300 daily benefit, and I would want an unlimited benefit period since that would be the only reason we would ever be interested in such a policy. The least expensive option is the future purchase option, which is described below.
With the FPO, every two years we will increase your daily benefit amount and the remaining portion of your maximum lifetime benefit (as well as other remaining benefit amounts listed in the schedule of benefits), except as described below. We will send notice of the increase to enrollees with this option with the next fall FPO offering for an increase that will apply the following January 1. Increases will occur every two years on January 1 thereafter. Your coverage must be in effect for at least 12 months in order for you to receive your first increase under this provision.
I don't really like the sound of that.

The FPO premium for a 60 year old is currently $316.12 per month ($3,793.44 annually).

With the 4% compound inflation option, which increases both your daily benefit amount and your maximum lifetime benefit by 4% annually, you obviously get a lot more coverage but with a much bigger price tag to boot. Also, there is no premium guarantee.
If you select the ACIO, your premium is designed to include all future inflation increases you will receive each year while you are insured. Your premium will not increase with each inflation increase under this option.

Please note: Premiums are not guaranteed. Your premium will not change because you get older or your health changes or for any other reason related solely to you. However, your premiums may increase if you are among a group of enrollees whose premium is determined to be inadequate. While the group policy is in effect, the U.S. Office of Personnel Management (OPM) must approve the change.
The 4% compound inflation option for a 60 year old is currently $666.65 monthly ($7,999.80 annually).

Buying a Medicaid compliant annuity if/when the first spouse experiences a LTC event seems to be a far more cost effective option to me than this and wouldn't appear to result in any lesser care.
“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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ResearchMed
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Re: Long-Term Care Decision

Post by ResearchMed » Mon Aug 05, 2019 10:24 pm

WoW2012 wrote:
Mon Aug 05, 2019 9:36 pm
ResearchMed wrote:
Mon Aug 05, 2019 6:41 pm
WoW2012 wrote:
Mon Aug 05, 2019 3:29 pm
willthrill81 wrote:
Mon Aug 05, 2019 3:11 pm

nisiprius wrote:
Mon Aug 28, 2017 2:32 pm
I'm going to give an honest but somewhat flip answer. We have "real" LTCi which we bought some years ago when things were more favorable than they are now. I don't have any very good answers on LTCi today.

The whole-life-insurance-with-LTC-rider makes no sense at all to me, and here's my reasoning. Most people don't need whole life insurance at all. If you need whole life insurance, presumably you have a good, coherent reason why you need the death benefit. If you don't need the death benefit, then you shouldn't be buying whole life insurance at all.

Now, the policy probably says clearly on it that the LTC rider is not long-term-care insurance. The insurance company isn't really taking any risk. All they are doing is giving you permission to raid the death benefit in advance of death. But we have already said you shouldn't buy the policy if you don't need the death benefit, and if you have an LTC rider and you raid the death benefit, then it won't be there when you need it. The money you spent on LTC comes out of the death benefit.

The question you need to ask is: if it's OK with me if the bad luck of my needing long-term care deprives my beneficiaries of, say, half the death benefit, why did I think I needed that big a death benefit in the first place?

There's no easy answer on long-term care. It's a very unpleasant thing and a very unpleasant product. It's very expensive because the risk of using it is large, much larger than the risk of a house fire. There's no cheap way to deal with it. Anything that looks like an easy, cheap, convenient alternative has got to have gotchas.

I'm not a fan of hybrids, but nisiprius explanation is seriously flawed.
nisiprius wrote:
Mon Aug 28, 2017 2:32 pm
I'm going to give an honest but somewhat flip answer. We have "real" LTCi which we bought some years ago when things were more favorable than they are now. I don't have any very good answers on LTCi today.
WOW: LTCi policies available for sale today are better than the policies sold 20 years ago. Today's policies offer asset protection from Medicaid even if the policy runs out of benefits. New policies also contain strict pricing regulations to prevent the kinds of rate increases the older policies had.

RM: This is NOT true for all policies, and indeed, in some states, there are NO such policies.
WoW2012 gave a list of states that do not have this arrangement at all, just a few days ago.


The whole-life-insurance-with-LTC-rider makes no sense at all to me, and here's my reasoning. Most people don't need whole life insurance at all. If you need whole life insurance, presumably you have a good, coherent reason why you need the death benefit. If you don't need the death benefit, then you shouldn't be buying whole life insurance at all.
Wow: No one buys these whole life policies with LTC riders for the death benefit. Everyone who buys it buys it solely for the LTC insurance protection.

RM: How do you know this? How do you know how well *everyone" who buys these even understands them, or what their own personal rationales are?


Now, the policy probably says clearly on it that the LTC rider is not long-term-care insurance.
Wow: The best hybrid has an LTC rider which IS long-term care insurance and specifically states it is. The LTC rider has tax-free benefits and tax-deductible premium, just like traditional LTC insurance. And this policy is not new. It's been around for about 30 years.


The insurance company isn't really taking any risk. All they are doing is giving you permission to raid the death benefit in advance of death.
WOW: Incorrect. The best hybrids (and there are 5 of them) have long-term care benefits that are significantly larger than the death benefit. One of them has unlimited long-term care benefits.

RM: Are all of these policies available in each of the 50 states? How many states do have all five of these available for purchase? How many states have an "unlimited policy" available?

But we have already said you shouldn't buy the policy if you don't need the death benefit, and if you have an LTC rider and you raid the death benefit, then it won't be there when you need it. The money you spent on LTC comes out of the death benefit.
Wow: This is correct. But nobody buys hybrids for the death benefit. Everyone buys it for LTCi benefits.


The question you need to ask is: if it's OK with me if the bad luck of my needing long-term care deprives my beneficiaries of, say, half the death benefit, why did I think I needed that big a death benefit in the first place?
Wow: Again, nobody buys hybrids for the death benefit. Everyone buys it for LTCi benefits.


There's no easy answer on long-term care. It's a very unpleasant thing and a very unpleasant product. It's very expensive because the risk of using it is large, much larger than the risk of a house fire.
Wow: The most cost-effective way to plan for long-term care is with a long-term care partnership policy IF you're young enough and healthy enough to get a worthwhile policy.


There's no cheap way to deal with it. Anything that looks like an easy, cheap, convenient alternative has got to have gotchas.
Wow: True.
RM: This is NOT true for all policies, and indeed, in some states, there are NO such policies.
WoW2012 gave a list of states that do not have this arrangement at all, just a few days ago.

I stand corrected. I apologize to the less than 2% of the population of the United States that lives in Vermont, Alaska, Hawaii, or Mississippi. If you live in one of those 4 states you canNOT buy a long-term care partnership policy. If you live in Mass. you can buy their unique version of a long-term care partnership policy, but it's not as good as what's available in the 45 other states that offer long-term care partnership policies.
I stand corrected that only 41 states have a Rate Stability Regulation. However, the 9 states that do NOT have the Rate Stability Regulation still require long-term care insurers to price their new policies using the most recent claims data, reducing the risk of future rate increases. Regulators don't want rate increases. Rate increases are a PITA for regulators.



RM: How do you know this? How do you know how well *everyone" who buys these even understands them, or what their own personal rationales are?
I stand corrected. I can't read minds. But I do have common sense. If someone just wanted a life insurance death benefit they wouldn't waste their money on a hybrid because hybrids are OVERPRICED life insurance policies. They could buy A LOT MORE death benefit for less premium if they just bought life insurance rather than a hybrid.


RM: Are all of these policies available in each of the 50 states? How many states do have all five of these available for purchase? How many states have an "unlimited policy" available?

4 of the 5 real hybrids are available in all 50 states.

There is only 1 hybrid that has an unlimited benefit period. It is available in 49 states.
There are 3 traditional LTCi policies that offer unlimited benefit periods.
One of them is available in all 50 states and one in 47 states.

There's really no need to have an unlimited benefit period, especially if you and your spouse/partner share policies.

Most companies allow spouses to share 10 to 15 years of benefits.

And a long-term care partnership policy essentially is an unlimited benefit period (because Medicaid is the back stop that never runs out.)
I was relying above in part on your recent post about the Medicaid partner plans, where you had written:

"Every state except for Vermont, Massachusetts, Mississippi, Alaska, and Hawaii
Although the plans available in CT, NY, and CA are not very good right now.
"

NY and CA, and also MA, certainly include quite a few people...

Also, it is your opinion that "There's really no need to have an unlimited benefit period". As you well know, and as is amply demonstrated in these threads here on BH, there is a vast difference of opinion about what types of insurance are "needed", and with what specific terms/benefits. Many others here have declared with similar certitude that "There's really no need to have long term care insurance". They are no more wrong in their opinion than you are in yours. And no more right, other than for themselves.
Ditto the "need" - or lack thereof - to have an unlimited benefit period.

As for your statement that
"If someone just wanted a life insurance death benefit they wouldn't waste their money on a hybrid because hybrids are OVERPRICED life insurance policies. They could buy A LOT MORE death benefit for less premium if they just bought life insurance rather than a hybrid."
Okay, you might not be able to read minds. I'll agree.
But you are a professional in this area. To assume that everyone fully understands all of these policies...? There'd be a lot fewer scams of many types (and I am NOT considering LTCI to be a scam, to be very clear!), *IF* everyone fully understood everything they signed up for. There would probably be fewer if everyone even just *read* the entire documents!
On another forum, the complaints from people who complain that the travel insurance was a total rip-off (or similar terminology, or worse) because it didn't cover their <X> episode/situation... when the policy stated VERY clearly that "<X> is NOT INCLUDED....", and then the person replies with something about how they didn't read "the stupid fine print"! And then how "it isn't fair!!!"
:annoyed
Those travel policies, at least the ones we've seen, are SO much shorter and less complicated than the LTCI policies we've seen (including the two we've studied in great detail, because family members have them).

And many people here are posting about policies they have. It doesn't matter that "now" policies are "better" in some/many ways. Their experience is different, and their opinions are valid.
(Indeed most opinions are "valid", including yours... but that means you should not belittle the opinions of others, and your tone certainly does that on many occasions...)

Enough for now...

Few of us will convince the "other side".
This isn't a "does 2+2 =4?" issue. There is not, regardless of how you try to present LTCI, a single right answer for everyone. There just isn't. People make different risk/benefit decisions in the stock market,and also in the insurance market. Those are *their* choices, and just because you disagree doesn't make them wrong, even though you make categorical statements that supposedly represent the "right position" for all.

RM
This signature is a placebo. You are in the control group.

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Re: Long-Term Care Decision

Post by WoW2012 » Mon Aug 05, 2019 10:55 pm

ResearchMed wrote:
Mon Aug 05, 2019 10:24 pm
There is not, regardless of how you try to present LTCI, a single right answer for everyone. There just isn't.

RM
When did I ever say that? Just a few posts ago I said that at least 50% of retirees don't need long-term care insurance.

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Re: Long-Term Care Decision

Post by WoW2012 » Mon Aug 05, 2019 11:15 pm

willthrill81 wrote:
Mon Aug 05, 2019 10:04 pm
WoW2012 wrote:
Mon Aug 05, 2019 9:36 pm
And a long-term care partnership policy essentially is an unlimited benefit period (because Medicaid is the back stop that never runs out.)
You've mentioned LTC partnership policies many times, but it doesn't seem to correspond with the disdain you've shown in many posts toward Medicaid. Based on my understanding of this program, it protects your assets from Medicaid's reach, but if you need care in a facility, it must be one that will accept Medicaid, and you've repeatedly eschewed that backstop. Would you explain your position on this?
With a Medicaid annuity you go on Medicaid immediately by giving up a large chunk of your money which ends up earning NOTHING, all for the privilege of going to a Medicaid-approved facility.

With a long-term care partnership policy, you use your policy's benefits (NOT Medicaid) to pay for your care in the setting of your choice, until your policy runs out of benefits. You can then apply for Medicaid but your assets are protected (for yourself, your spouse, and your heirs). You can even use your protected assets to pay for private care to supplement the care Medicaid provides (e.g. pay for an aide to come to the nursing facility every day to provide you with more personalized care than can the care provided by the facility's staff.)

#NightandDay

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Re: Long-Term Care Decision

Post by willthrill81 » Tue Aug 06, 2019 12:13 am

WoW2012 wrote:
Mon Aug 05, 2019 11:15 pm
willthrill81 wrote:
Mon Aug 05, 2019 10:04 pm
WoW2012 wrote:
Mon Aug 05, 2019 9:36 pm
And a long-term care partnership policy essentially is an unlimited benefit period (because Medicaid is the back stop that never runs out.)
You've mentioned LTC partnership policies many times, but it doesn't seem to correspond with the disdain you've shown in many posts toward Medicaid. Based on my understanding of this program, it protects your assets from Medicaid's reach, but if you need care in a facility, it must be one that will accept Medicaid, and you've repeatedly eschewed that backstop. Would you explain your position on this?
With a Medicaid annuity you go on Medicaid immediately by giving up a large chunk of your money which ends up earning NOTHING, all for the privilege of going to a Medicaid-approved facility.

With a long-term care partnership policy, you use your policy's benefits (NOT Medicaid) to pay for your care in the setting of your choice, until your policy runs out of benefits. You can then apply for Medicaid but your assets are protected (for yourself, your spouse, and your heirs). You can even use your protected assets to pay for private care to supplement the care Medicaid provides (e.g. pay for an aide to come to the nursing facility every day to provide you with more personalized care than can the care provided by the facility's staff.)

#NightandDay
That makes more sense. It still seems quite pricey, at least as much as traditional LTC insurance. Is that not so?
“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 Decision

Post by WoW2012 » Tue Aug 06, 2019 12:51 am

willthrill81 wrote:
Tue Aug 06, 2019 12:13 am
WoW2012 wrote:
Mon Aug 05, 2019 11:15 pm
willthrill81 wrote:
Mon Aug 05, 2019 10:04 pm
WoW2012 wrote:
Mon Aug 05, 2019 9:36 pm
And a long-term care partnership policy essentially is an unlimited benefit period (because Medicaid is the back stop that never runs out.)
You've mentioned LTC partnership policies many times, but it doesn't seem to correspond with the disdain you've shown in many posts toward Medicaid. Based on my understanding of this program, it protects your assets from Medicaid's reach, but if you need care in a facility, it must be one that will accept Medicaid, and you've repeatedly eschewed that backstop. Would you explain your position on this?
With a Medicaid annuity you go on Medicaid immediately by giving up a large chunk of your money which ends up earning NOTHING, all for the privilege of going to a Medicaid-approved facility.

With a long-term care partnership policy, you use your policy's benefits (NOT Medicaid) to pay for your care in the setting of your choice, until your policy runs out of benefits. You can then apply for Medicaid but your assets are protected (for yourself, your spouse, and your heirs). You can even use your protected assets to pay for private care to supplement the care Medicaid provides (e.g. pay for an aide to come to the nursing facility every day to provide you with more personalized care than can the care provided by the facility's staff.)

#NightandDay
That makes more sense. It still seems quite pricey, at least as much as traditional LTC insurance. Is that not so?
1 ) Medicaid annuities area very expensive. You ave to put all of your and your spouse's countable assets into it except for $127,000.

2) Medicaid annuities don't protect all assets. For example they can't protect qualified money.

3) Even more importantly, you cannot guarantee that a Medicaid annuity will be legal 5 years from now, let alone 20 years from now.

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Re: Long-Term Care Decision

Post by willthrill81 » Tue Aug 06, 2019 12:57 am

WoW2012 wrote:
Tue Aug 06, 2019 12:51 am
willthrill81 wrote:
Tue Aug 06, 2019 12:13 am
WoW2012 wrote:
Mon Aug 05, 2019 11:15 pm
willthrill81 wrote:
Mon Aug 05, 2019 10:04 pm
WoW2012 wrote:
Mon Aug 05, 2019 9:36 pm
And a long-term care partnership policy essentially is an unlimited benefit period (because Medicaid is the back stop that never runs out.)
You've mentioned LTC partnership policies many times, but it doesn't seem to correspond with the disdain you've shown in many posts toward Medicaid. Based on my understanding of this program, it protects your assets from Medicaid's reach, but if you need care in a facility, it must be one that will accept Medicaid, and you've repeatedly eschewed that backstop. Would you explain your position on this?
With a Medicaid annuity you go on Medicaid immediately by giving up a large chunk of your money which ends up earning NOTHING, all for the privilege of going to a Medicaid-approved facility.

With a long-term care partnership policy, you use your policy's benefits (NOT Medicaid) to pay for your care in the setting of your choice, until your policy runs out of benefits. You can then apply for Medicaid but your assets are protected (for yourself, your spouse, and your heirs). You can even use your protected assets to pay for private care to supplement the care Medicaid provides (e.g. pay for an aide to come to the nursing facility every day to provide you with more personalized care than can the care provided by the facility's staff.)

#NightandDay
That makes more sense. It still seems quite pricey, at least as much as traditional LTC insurance. Is that not so?
1 ) Medicaid annuities area very expensive. You ave to put all of your and your spouse's countable assets into it except for $127,000.

2) Medicaid annuities don't protect all assets. For example they can't protect qualified money.

3) Even more importantly, you cannot guarantee that a Medicaid annuity will be legal 5 years from now, let alone 20 years from now.
1. You're converting assets into income, which protects the 'well' spouse.

2. A Medicaid compliant annuity only protects the funds put into it. But you can purchase one with funds from a 'qualified' account. It just means that 100% of the payout will be taxed as earned income, which is no different than making a withdrawal from a 401k or other tax-deferred account.

3. That caveat also applies to LTC insurance and the laws surrounding them, so it's a moot point.
“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 Decision

Post by RetiredAL » Sat Aug 10, 2019 7:30 pm

RetiredAL wrote:
Sun Jul 28, 2019 10:54 pm
JPM wrote:
Sun Jul 28, 2019 1:50 pm
As the Kansas doctor wrote, getting the insurer to pay legitimate claims can be challenging and it helps to have an attorney or to be able and willing to play hardball with the insurer. In health lines, insurers put a lot of effort into dodging payment of claims and will use creative dodges to get the insured to pay charges that the insurer has agreed to pay. Dodging payment in these lines is a game played for money by insurers.



My experience with my Dad this year with his LTC Insurance. To date, I've had no problems with Genworth. First with in-home care, including equipment purchases and repairs. Now that he is in assisted living, they contacted me this last Thurs saying that everything had been approved, but I have not yet seen the statement.

So far, I've found Genworth easy to work with. Much better than what I had expected before I started the process.
An update now that I have seen the actual Genworth statement for the payment received for my Dad's Assisted Living charges.

Genworth has paid 2 month's in full just as invoiced by the Assisted Living Facility. The charges are less than the monthly max.

The first month was not paid under the exclusionary provisions. They used his stays in Rehab/Nursing for the exclusion period even though Medicare paid for that, so the exclusionary impact to us was lessened.

The payments are EFT'd to my Dad's checking account. I write the check to the ALF. The ALF uses payment ahead for service, with a true-up on the next bill for any additional items.

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Re: Long-Term Care Decision

Post by ResearchMed » Sat Aug 10, 2019 10:02 pm

RetiredAL wrote:
Sat Aug 10, 2019 7:30 pm
RetiredAL wrote:
Sun Jul 28, 2019 10:54 pm
JPM wrote:
Sun Jul 28, 2019 1:50 pm
As the Kansas doctor wrote, getting the insurer to pay legitimate claims can be challenging and it helps to have an attorney or to be able and willing to play hardball with the insurer. In health lines, insurers put a lot of effort into dodging payment of claims and will use creative dodges to get the insured to pay charges that the insurer has agreed to pay. Dodging payment in these lines is a game played for money by insurers.



My experience with my Dad this year with his LTC Insurance. To date, I've had no problems with Genworth. First with in-home care, including equipment purchases and repairs. Now that he is in assisted living, they contacted me this last Thurs saying that everything had been approved, but I have not yet seen the statement.

So far, I've found Genworth easy to work with. Much better than what I had expected before I started the process.
An update now that I have seen the actual Genworth statement for the payment received for my Dad's Assisted Living charges.

Genworth has paid 2 month's in full just as invoiced by the Assisted Living Facility. The charges are less than the monthly max.

The first month was not paid under the exclusionary provisions. They used his stays in Rehab/Nursing for the exclusion period even though Medicare paid for that, so the exclusionary impact to us was lessened.

The payments are EFT'd to my Dad's checking account. I write the check to the ALF. The ALF uses payment ahead for service, with a true-up on the next bill for any additional items.
How recent is his policy?
I'm curious about Genworth covering "Assisted Living", rather than requiring full "Skilled Nursing" or such.

RM
This signature is a placebo. You are in the control group.

RetiredAL
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Re: Long-Term Care Decision

Post by RetiredAL » Sat Aug 10, 2019 11:10 pm

RM,

The policy for my Dad was issued 20 years ago when he was 74. $150,000 initially, 5% annual inflation rate (not compounded), now worth $300,000. The policy will now pay up to $6,000/mo, no month count, up to total $ payout.

We tried Home Care, which Genworth did pay, but the 2 shifts cost was twice the monthly limit and it became obvious that 3 shifts was needed.

He has several ADL deficiencies.

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Re: Long-Term Care Decision

Post by Freetime76 » Sat Aug 10, 2019 11:14 pm

I'm a little surprised at the voracity of the earlier discussion, but mostly am interested in the concrete details/experiences of others, especially physicians - so thanks! Everyone's situation is different, of course. I did learn recently that lower quoted costs for care are sometimes the Medicare-negotiated rates, not the private/insurance payer rates (the numbers are eye-popping to me).

To the OP: FWIW, to our household it's about risk tolerance and availability of resources (dollars now, dollars later, family/friends help later and guessing at health scenarios). I have one parent who insures herself religiously for desire of making her own choices and living out her days the way she wants to (divorced, >$1M net worth, her LTC policy is one of the older ones - cheaper and excellent, no longer exists as the industry adjusted strategy I gather). The other parent passed suddenly with zero home care and zero medical expenses of any kind (never had LTC insurance).

Not too long ago, 2 members of my family swapped off care for an elderly relation (she had plenty of assets for regular expenses, but no long term care insurance) for about 2.5 years. It was tough, it worked with support from Medicare and eventually hospice. Friends/neighbors/church helped to some extent. This is not always feasible.

Agree with nisiprius: there is no cheap option (whether it's dollars or time of those who help in the family), and you just don't know what will happen.

I was interested in this discussion because of a future dementia care decision. [Dementia Reimagined by Tia Powell was excellent and informative for historical perspective.] No clue what my spouse and I will do for ourselves: that's a ways off for us, and likely the insurance and care industries will have (hopefully??) changed significantly by then.

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Re: Long-Term Care Decision

Post by HereToLearn » Sat Aug 10, 2019 11:28 pm

RetiredAL wrote:
Sat Aug 10, 2019 11:10 pm
RM,

The policy for my Dad was issued 20 years ago when he was 74. $150,000 initially, 5% annual inflation rate (not compounded), now worth $300,000. The policy will now pay up to $6,000/mo, no month count, up to total $ payout.

We tried Home Care, which Genworth did pay, but the 2 shifts cost was twice the monthly limit and it became obvious that 3 shifts was needed.

He has several ADL deficiencies.
The benefit compounding really makes a difference! My mother's policy started with a $150/daily benefit and was up to $418/day 21 or 22 years later. Lifetime benefit increased from $273K to $762K.

I found it to be quite the paperwork intensive process to have Met Life approve my father for benefits, and then have Brighthouse approve my mother, eight years later. (Travelers issued the policy, but the book of business was sold a couple of times.) The Brighthouse reps were 'friendlier' than the Met Life rep, but the paperwork was still a hassle.

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Re: Long-Term Care Decision

Post by RetiredAL » Sat Aug 10, 2019 11:55 pm

HereToLearn,

My paperwork experience seems much better than your's.

The initial contact was via phone. They over-nighted a packet containing forms, basically some standard Name-Rank-SerialNbr-POA stuff, which I submitted electronically via their website. My Dad had already created a user logon, which I knew nothing about, but their system told me an ID existed for his policy number and allowed a PW reset by sending a token to his email.

Genworth arranged for an evaluation person to first come to his house while we did Home Care, then again when he went to Assisted Living. At every step, they called me so I knew what was happening and what was the time-line to expect. When everything was OK'd for the Assisted Living, they called, said everything was approved, and to expect the ETF check in a couple of days. The facility submits all the monthly paperwork. The facility told me, when admitting my Dad, that that they found Genworth was easy to work with.

pintail07
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Re: Long-Term Care Decision

Post by pintail07 » Sun Aug 11, 2019 12:25 pm

Without a doubt self insuring is the most economical way until one goes on claim. After just a few months on claim one reclaims all premiums. The very wealthy grasp this concept.

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Re: Long-Term Care Decision

Post by willthrill81 » Sun Aug 11, 2019 12:59 pm

pintail07 wrote:
Sun Aug 11, 2019 12:25 pm
Without a doubt self insuring is the most economical way until one goes on claim. After just a few months on claim one reclaims all premiums. The very wealthy grasp this concept.
You seem to be suggesting that LTC insurance is guaranteed to 'win' if you make a claim. That's demonstrably false.
“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 Decision

Post by pintail07 » Sun Aug 11, 2019 1:03 pm

If the claim lasts longer than a few months it patently true.

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Re: Long-Term Care Decision

Post by TN_Boy » Sun Aug 11, 2019 1:15 pm

[Edited]: Deleting, since I'm on the edge of violating forum rules ....
Last edited by TN_Boy on Sun Aug 11, 2019 1:43 pm, edited 1 time in total.

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Re: Long-Term Care Decision

Post by LadyGeek » Sun Aug 11, 2019 1:18 pm

I removed an off-topic comment and a reply. As a reminder, see: General Etiquette
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones.

At all times we must conduct ourselves in a respectful manner to other posters.
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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Sun Aug 11, 2019 1:23 pm

pintail07 wrote:
Sun Aug 11, 2019 1:03 pm
If the claim lasts longer than a few months it patently true.
According to Genworth, the longest coverage period they will offer to people in our state (WA) is 5 years. Multiplied by the maximum daily maximum benefit of $300, that's $547,500 per person of maximum coverage. That would not at all be a financial catastrophe for a "very wealthy" couple.

Are you saying that Genworth is losing money by selling such LTC policies? If so, how can they do so and not go bankrupt?

Further, a LTC policy for an opposite sex couple aged 65 in our state with a $300 daily maximum benefit (necessary since nursing homes are roughly $100k annually) with a 5 year maximum coverage period, the longest they will provide at least in our state, would cost $4,553.31 annually, ~$9,100 annually for the couple. That means that two years' premiums are payment for approximately one month of LTC in a nursing home, about the most expensive form of LTC, in our area for each spouse. Considering that, according to the Long-term Care Insurance Association, the 70% of the initial LTC insurance claims don't occur until the insured is at least age 81, assuming the premiums don't increase at all for the next 16 years, which is not historically a good assumption, both spouses would need to receive about 8 months of LTC at age 81 in order to break-even. If they spend more and/or use LTC prior, they come out ahead. Otherwise, they don'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

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Re: Long-Term Care Decision

Post by willthrill81 » Sun Aug 11, 2019 1:25 pm

TN_Boy wrote:
Sun Aug 11, 2019 1:15 pm
willthrill81 wrote:
Sun Aug 11, 2019 12:59 pm
pintail07 wrote:
Sun Aug 11, 2019 12:25 pm
Without a doubt self insuring is the most economical way until one goes on claim. After just a few months on claim one reclaims all premiums. The very wealthy grasp this concept.
You seem to be suggesting that LTC insurance is guaranteed to 'win' if you make a claim. That's demonstrably false.
You are feeding the trolls .....
Possibly, but it's important for lurkers to understand why the claim is false. The short answer is that if LTC insurance was a good 'investment', the insurance companies providing it would go bankrupt. It's true that if one could write off the premiums as a business expense and take an effective 35% discount on the premiums that it could be a good deal, but I believe that there are limits on how much can be written off this way.
“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 Decision

Post by stan1 » Sun Aug 11, 2019 1:36 pm

Let's be careful not to compare policies written 20 or 30 years ago with what one can buy today. I have several older relatives who bought LTCI policies in the 1990s that were set up such that they were "paid in full" after 10 years of payments or even a single up front cash payment like an SPIA. The actuaries made a huge mistake in part by assuming 8-10%+ returns on investment. If you bought one at the time consider yourself very fortunate but don't assume the same good deal is still available. It is not.

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