long term care insurance

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

Re: long term care insurance

Post by WoW2012 » Wed Jun 13, 2018 12:54 pm

JoeRetire wrote:
Wed Jun 13, 2018 12:52 pm
WoW2012 wrote:
Wed Jun 13, 2018 12:47 pm
JoeRetire wrote:
Wed Jun 13, 2018 10:55 am
WoW2012 wrote:
Wed Jun 13, 2018 10:23 am
Fortunately, the Rate Stability Regulation has removed the incentive for insurance companies to “price policyholders out”. Over 90% of the rate increases you hear about are on policies that are not protected by the Rate Stability Regulation.
It's nice to hear from someone who understands the (admittedly complex) details of insurance, and in particular LTCi, rather than folks who just parrot headlines or bullet points that they don't really comprehend.

How can I find out if my policy is protected by the Rate Stability Regulation or not?

Thanks!
It depends upon the state you were a resident of when you bought the policy and when you bought the policy. Also, there are some group policies (e.g. the federal long-term care insurance program, CalPERS, WERS, and other self-funded groups) that do not comply with the Rate Stability Regulation. If you bought a policy from the FLTCIP or CalPERS or WERS, then your policy is not protected by the Rate Stability Regulation.

Ask the agent you bought your policy from. He/she should know.
Resident of MA. Bought it in 2014 - no increases in premiums so far. Mutual of Omaha.
I was hoping there would be some phrase in the policy that would indicate compliance with the Rate Stability Regulation?

I'll try to hunt down the agent...

Thanks!

Massachusetts is one of 9 states that has not enacted the Rate Stability Regulation.
You've got a great company, though.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.

JoeRetire
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Joined: Tue Jan 16, 2018 2:44 pm

Re: long term care insurance

Post by JoeRetire » Wed Jun 13, 2018 12:59 pm

WoW2012 wrote:
Wed Jun 13, 2018 12:54 pm
Massachusetts is one of 9 states that has not enacted the Rate Stability Regulation.
You've got a great company, though.
We've been pleased with the company and policy so far.

It appears that MA passed Chapter 312 of the Acts of 2012, An Act Establishing Standards for Long-Term Care Insurance, for policies issues after the beginning of 2013. Maybe that's not the same as Rate Stability?

Hmm, what about Maine?

While we are currently residents of MA, we will be retiring in Maine in the next year or two.
So when we purchased the policy, we used our Maine address (we have a home there too, where we intend to move upon retirement).

[edit]I found this:
All but nine states have not enacted any type of Rate Stability Regulation:

Alaska
Connecticut
Indiana
Massachusetts
Mississippi
Nebraska
Nevada
New York
Wyoming

Thanks for sharing your knowledge!

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

Re: long term care insurance

Post by WoW2012 » Wed Jun 13, 2018 1:13 pm

JoeRetire wrote:
Wed Jun 13, 2018 12:59 pm
WoW2012 wrote:
Wed Jun 13, 2018 12:54 pm
Massachusetts is one of 9 states that has not enacted the Rate Stability Regulation.
You've got a great company, though.
We've been pleased with the company and policy so far.

It appears that MA passed Chapter 312 of the Acts of 2012, An Act Establishing Standards for Long-Term Care Insurance, for policies issues after the beginning of 2013. Maybe that's not the same as Rate Stability?

Hmm, what about Maine?

While we are currently residents of MA, we will be retiring in Maine in the next year or two.
So when we purchased the policy, we used our Maine address (we have a home there too, where we intend to move upon retirement).

[edit]I found this:
All but nine states have not enacted any type of Rate Stability Regulation:

Alaska
Connecticut
Indiana
Massachusetts
Mississippi
Nebraska
Nevada
New York
Wyoming

Thanks for sharing your knowledge!

If you used your Maine address when you applied for the policy, then you would have been issued a Maine-approved policy, which would mean that your policy is covered by the Rate Stability Regulation.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.

JoeRetire
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Joined: Tue Jan 16, 2018 2:44 pm

Re: long term care insurance

Post by JoeRetire » Wed Jun 13, 2018 1:15 pm

WoW2012 wrote:
Wed Jun 13, 2018 1:13 pm
If you used your Maine address when you applied for the policy, then you would have been issued a Maine-approved policy, which would mean that your policy is covered by the Rate Stability Regulation.
Good news!

Thanks again!

littlebird
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Location: Valley of the Sun, AZ

Re: long term care insurance

Post by littlebird » Wed Jun 13, 2018 1:44 pm

WoW2012 wrote:
Sat Jun 09, 2018 2:11 pm

Quick question: if/when you ever need long-term care, will all of your other living expenses magically disappear?
It depends on what kind of care you need, can afford, and are willing to put up with. When my spouse was in an assisted living group home — with excellent care — costing $48,000/year, additional expenses were only the 20% Medicare copay for his medical needs, prescriptions, and medical and incontinence supplies. Now he is being cared for at home, with 6 hours a day of caregiver help at $50,000/year, plus about $8,000/year additional food and utilities expenses. Of course, this requires there to be a home — with all its residual expenses — to go home to. Some people can be alone, with caregiver help, in their home, and some can only do it if there’s a family member to supervise, manage and be a second pair of hands, full or part time. No-one knows in advance what their needs are going to be, but there are some affordable alternatives.

For the curious: we had no LTC insurance, retired early and very early, respectively, and on a relative shoe-string 30 years ago. Given my spouse’s current age, these expenses will likely not go on for more years than we can afford (drawing down less than 4% currently, having converted some assets to an annuity on my life).

JoeRetire
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Re: long term care insurance

Post by JoeRetire » Wed Jun 13, 2018 2:42 pm

littlebird wrote:
Wed Jun 13, 2018 1:44 pm
WoW2012 wrote:
Sat Jun 09, 2018 2:11 pm

Quick question: if/when you ever need long-term care, will all of your other living expenses magically disappear?
It depends on what kind of care you need, can afford, and are willing to put up with. When my spouse was in an assisted living group home — with excellent care — costing $48,000/year, additional expenses were only the 20% Medicare copay for his medical needs, prescriptions, and medical and incontinence supplies.
That's your spouse. But what about your expenses? They didn't disappear.

littlebird
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Location: Valley of the Sun, AZ

Re: long term care insurance

Post by littlebird » Wed Jun 13, 2018 3:03 pm

JoeRetire wrote:
Wed Jun 13, 2018 2:42 pm
littlebird wrote:
Wed Jun 13, 2018 1:44 pm
WoW2012 wrote:
Sat Jun 09, 2018 2:11 pm

Quick question: if/when you ever need long-term care, will all of your other living expenses magically disappear?
It depends on what kind of care you need, can afford, and are willing to put up with. When my spouse was in an assisted living group home — with excellent care — costing $48,000/year, additional expenses were only the 20% Medicare copay for his medical needs, prescriptions, and medical and incontinence supplies.
That's your spouse. But what about your expenses? They didn't disappear.
Not everybody has a (living) spouse.

JoeRetire
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Re: long term care insurance

Post by JoeRetire » Wed Jun 13, 2018 3:57 pm

littlebird wrote:
Wed Jun 13, 2018 3:03 pm
JoeRetire wrote:
Wed Jun 13, 2018 2:42 pm
littlebird wrote:
Wed Jun 13, 2018 1:44 pm
WoW2012 wrote:
Sat Jun 09, 2018 2:11 pm

Quick question: if/when you ever need long-term care, will all of your other living expenses magically disappear?
It depends on what kind of care you need, can afford, and are willing to put up with. When my spouse was in an assisted living group home — with excellent care — costing $48,000/year, additional expenses were only the 20% Medicare copay for his medical needs, prescriptions, and medical and incontinence supplies.
That's your spouse. But what about your expenses? They didn't disappear.
Not everybody has a (living) spouse.
I understand that. You did. And you had expenses that didn't go away.

littlebird
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Location: Valley of the Sun, AZ

Re: long term care insurance

Post by littlebird » Wed Jun 13, 2018 5:32 pm

JoeRetire wrote:
Wed Jun 13, 2018 3:57 pm
littlebird wrote:
Wed Jun 13, 2018 3:03 pm
JoeRetire wrote:
Wed Jun 13, 2018 2:42 pm
littlebird wrote:
Wed Jun 13, 2018 1:44 pm
WoW2012 wrote:
Sat Jun 09, 2018 2:11 pm

Quick question: if/when you ever need long-term care, will all of your other living expenses magically disappear?
It depends on what kind of care you need, can afford, and are willing to put up with. When my spouse was in an assisted living group home — with excellent care — costing $48,000/year, additional expenses were only the 20% Medicare copay for his medical needs, prescriptions, and medical and incontinence supplies.
That's your spouse. But what about your expenses? They didn't disappear.
Not everybody has a (living) spouse.
I understand that. You did. And you had expenses that didn't go away.
But I am not in long term care. My spouse IS. And his expenses of daily living DID go away when in the group home, except for those items mentioned. For those alone in late life, yes, their usual expenses mostly CAN go away, if they go into a facility, or may not go away, if they get care in their home.

JoeRetire
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Re: long term care insurance

Post by JoeRetire » Wed Jun 13, 2018 9:09 pm

littlebird wrote:
Wed Jun 13, 2018 5:32 pm
But I am not in long term care. My spouse IS. And his expenses of daily living DID go away when in the group home, except for those items mentioned.
Much of the reason behind LTCi is not to burden the rest of the family when long-term care is needed.

The person needing long term care can end up draining the family's assets, time, and resources. His expenses might go down, but unless you are willing to vacate your home, much of the overall family expenses remain.

That was the point.

carruthers209
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Re: long term care insurance

Post by carruthers209 » Wed Jun 13, 2018 9:24 pm

https://www.wsj.com/articles/long-term- ... 1528387201

This article in the Wall Street Journal was just posted (June 11th) and highlights hybrid policies which for some families, could be very helpful. It's an interesting read. It's definitely aimed at the more affluent and provides some life insurance even when the long term care is utilized. Can't promise the hyperlink will work. I downloaded the article from Apple News.

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Nate79
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Re: long term care insurance

Post by Nate79 » Wed Jun 13, 2018 11:40 pm

carruthers209 wrote:
Wed Jun 13, 2018 9:24 pm
https://www.wsj.com/articles/long-term- ... 1528387201

This article in the Wall Street Journal was just posted (June 11th) and highlights hybrid policies which for some families, could be very helpful. It's an interesting read. It's definitely aimed at the more affluent and provides some life insurance even when the long term care is utilized. Can't promise the hyperlink will work. I downloaded the article from Apple News.
The comments in that article were quite interesting about how bad these products really are. This is still Whole life insurance.

ncbill
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Location: Western NC

Re: long term care insurance

Post by ncbill » Thu Jun 14, 2018 6:03 am

Nate79 wrote:
Wed Jun 13, 2018 11:40 pm
carruthers209 wrote:
Wed Jun 13, 2018 9:24 pm
https://www.wsj.com/articles/long-term- ... 1528387201

This article in the Wall Street Journal was just posted (June 11th) and highlights hybrid policies which for some families, could be very helpful. It's an interesting read. It's definitely aimed at the more affluent and provides some life insurance even when the long term care is utilized. Can't promise the hyperlink will work. I downloaded the article from Apple News.
The comments in that article were quite interesting about how bad these products really are. This is still Whole life insurance.
Make sure it's straight whole life.

A few years ago my insurance agent tried to get me to exchange an old plain-vanilla whole life policy for one of these hybrids.

Dumping in $100,000 cash value from the existing policy with add'l premiums of $10,000/year for 10 years.

But the new policy was universal life, not traditional whole life.

So, looking at the guarantee, the policy ran out of money and blew up in my 60s.

Yeah, thanks but no thanks, buddy.

Topic Author
capemaydiamond
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Re: long term care insurance

Post by capemaydiamond » Sat Jun 23, 2018 12:43 pm

LadyGeek wrote:
Tue Jun 12, 2018 7:38 pm
capemaydiamond wrote:
Sun Jun 10, 2018 6:25 pm
...On another note, I have requested email notification when someone posts on this topic and I'm not getting them. Any thoughts about why not? I can't find my email address anywhere on the site to confirm the correct one is on file, and I can't find any info about a forum administrator to ask this kind of thing.......
I sent you a PM.

(Thanks to the member who reported the post to get our attention.)
Lady Geek - I just looked for your PM and it says it was deleted.....

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willthrill81
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Re: long term care insurance

Post by willthrill81 » Mon Aug 05, 2019 4:43 pm

WoW2012 wrote:
Sun Jun 10, 2018 7:14 pm
If you bought an LTCi policy before 1993, you'll probably never get a dime from it.
If you bought one between 1993 and 1997 you might get something from it.
I hope you realize that this is one of several reasons why many who don't own LTC insurance, including myself, are more than a little suspicious about the product. We were told that the LTC actuaries all really screwed up but that they now have a better grasp on the situation. Most of those who offered LTC insurance a decade or two ago no longer do so. And now we're being told that laws have been put in place to cap the previously outrageous premium increases, although most of us know that laws can be changed suddenly and dramatically, potentially leaving those who have paid premiums for many years left with little or nothing. So I ask that you'll pardon a little (or a lot) of skepticism about this product. Maybe some of the products being currently offered out there really are a good deal for those with enough assets to warrant protection but not enough to self-insure. But they might turn out to be little or no better than the prior policies.
“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

WoW2012
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Re: long term care insurance

Post by WoW2012 » Mon Aug 05, 2019 6:24 pm

willthrill81 wrote:
Mon Aug 05, 2019 4:43 pm
WoW2012 wrote:
Sun Jun 10, 2018 7:14 pm
If you bought an LTCi policy before 1993, you'll probably never get a dime from it.
If you bought one between 1993 and 1997 you might get something from it.
I hope you realize that this is one of several reasons why many who don't own LTC insurance, including myself, are more than a little suspicious about the product. We were told that the LTC actuaries all really screwed up but that they now have a better grasp on the situation. Most of those who offered LTC insurance a decade or two ago no longer do so. And now we're being told that laws have been put in place to cap the previously outrageous premium increases, although most of us know that laws can be changed suddenly and dramatically, potentially leaving those who have paid premiums for many years left with little or nothing. So I ask that you'll pardon a little (or a lot) of skepticism about this product. Maybe some of the products being currently offered out there really are a good deal for those with enough assets to warrant protection but not enough to self-insure. But they might turn out to be little or no better than the prior policies.
This year about 300,000 families will receive about $15 billion in long-term care insurance benefits. It's working for a lot of people.

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willthrill81
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Re: long term care insurance

Post by willthrill81 » Mon Aug 05, 2019 6:33 pm

WoW2012 wrote:
Mon Aug 05, 2019 6:24 pm
willthrill81 wrote:
Mon Aug 05, 2019 4:43 pm
WoW2012 wrote:
Sun Jun 10, 2018 7:14 pm
If you bought an LTCi policy before 1993, you'll probably never get a dime from it.
If you bought one between 1993 and 1997 you might get something from it.
I hope you realize that this is one of several reasons why many who don't own LTC insurance, including myself, are more than a little suspicious about the product. We were told that the LTC actuaries all really screwed up but that they now have a better grasp on the situation. Most of those who offered LTC insurance a decade or two ago no longer do so. And now we're being told that laws have been put in place to cap the previously outrageous premium increases, although most of us know that laws can be changed suddenly and dramatically, potentially leaving those who have paid premiums for many years left with little or nothing. So I ask that you'll pardon a little (or a lot) of skepticism about this product. Maybe some of the products being currently offered out there really are a good deal for those with enough assets to warrant protection but not enough to self-insure. But they might turn out to be little or no better than the prior policies.
This year about 300,000 families will receive about $15 billion in long-term care insurance benefits. It's working for a lot of people.
That alone doesn't say anything about whether LTC insurance is a good product for any specific person.
“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

WoW2012
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Re: long term care insurance

Post by WoW2012 » Mon Aug 05, 2019 6:40 pm

willthrill81 wrote:
Mon Aug 05, 2019 6:33 pm
WoW2012 wrote:
Mon Aug 05, 2019 6:24 pm
willthrill81 wrote:
Mon Aug 05, 2019 4:43 pm
WoW2012 wrote:
Sun Jun 10, 2018 7:14 pm
If you bought an LTCi policy before 1993, you'll probably never get a dime from it.
If you bought one between 1993 and 1997 you might get something from it.
I hope you realize that this is one of several reasons why many who don't own LTC insurance, including myself, are more than a little suspicious about the product. We were told that the LTC actuaries all really screwed up but that they now have a better grasp on the situation. Most of those who offered LTC insurance a decade or two ago no longer do so. And now we're being told that laws have been put in place to cap the previously outrageous premium increases, although most of us know that laws can be changed suddenly and dramatically, potentially leaving those who have paid premiums for many years left with little or nothing. So I ask that you'll pardon a little (or a lot) of skepticism about this product. Maybe some of the products being currently offered out there really are a good deal for those with enough assets to warrant protection but not enough to self-insure. But they might turn out to be little or no better than the prior policies.
This year about 300,000 families will receive about $15 billion in long-term care insurance benefits. It's working for a lot of people.
That alone doesn't say anything about whether LTC insurance is a good product for any specific person.
Your prior post stated, that today's LTCi policies "might turn out to be little or no better than the prior policies." I was simply stating that the new/improved policies (which came out around 1997) are paying a lot of claims because they have better consumer protections than the policies that were sold before that.

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willthrill81
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Re: long term care insurance

Post by willthrill81 » Mon Aug 05, 2019 7:43 pm

WoW2012 wrote:
Mon Aug 05, 2019 6:40 pm
willthrill81 wrote:
Mon Aug 05, 2019 6:33 pm
WoW2012 wrote:
Mon Aug 05, 2019 6:24 pm
willthrill81 wrote:
Mon Aug 05, 2019 4:43 pm
WoW2012 wrote:
Sun Jun 10, 2018 7:14 pm
If you bought an LTCi policy before 1993, you'll probably never get a dime from it.
If you bought one between 1993 and 1997 you might get something from it.
I hope you realize that this is one of several reasons why many who don't own LTC insurance, including myself, are more than a little suspicious about the product. We were told that the LTC actuaries all really screwed up but that they now have a better grasp on the situation. Most of those who offered LTC insurance a decade or two ago no longer do so. And now we're being told that laws have been put in place to cap the previously outrageous premium increases, although most of us know that laws can be changed suddenly and dramatically, potentially leaving those who have paid premiums for many years left with little or nothing. So I ask that you'll pardon a little (or a lot) of skepticism about this product. Maybe some of the products being currently offered out there really are a good deal for those with enough assets to warrant protection but not enough to self-insure. But they might turn out to be little or no better than the prior policies.
This year about 300,000 families will receive about $15 billion in long-term care insurance benefits. It's working for a lot of people.
That alone doesn't say anything about whether LTC insurance is a good product for any specific person.
Your prior post stated, that today's LTCi policies "might turn out to be little or no better than the prior policies." I was simply stating that the new/improved policies (which came out around 1997) are paying a lot of claims because they have better consumer protections than the policies that were sold before that.
So the old policies weren't paying out to policy holders?
“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

WoW2012
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Re: long term care insurance

Post by WoW2012 » Mon Aug 05, 2019 9:53 pm

willthrill81 wrote:
Mon Aug 05, 2019 7:43 pm
WoW2012 wrote:
Mon Aug 05, 2019 6:40 pm
willthrill81 wrote:
Mon Aug 05, 2019 6:33 pm
WoW2012 wrote:
Mon Aug 05, 2019 6:24 pm
willthrill81 wrote:
Mon Aug 05, 2019 4:43 pm


I hope you realize that this is one of several reasons why many who don't own LTC insurance, including myself, are more than a little suspicious about the product. We were told that the LTC actuaries all really screwed up but that they now have a better grasp on the situation. Most of those who offered LTC insurance a decade or two ago no longer do so. And now we're being told that laws have been put in place to cap the previously outrageous premium increases, although most of us know that laws can be changed suddenly and dramatically, potentially leaving those who have paid premiums for many years left with little or nothing. So I ask that you'll pardon a little (or a lot) of skepticism about this product. Maybe some of the products being currently offered out there really are a good deal for those with enough assets to warrant protection but not enough to self-insure. But they might turn out to be little or no better than the prior policies.
This year about 300,000 families will receive about $15 billion in long-term care insurance benefits. It's working for a lot of people.
That alone doesn't say anything about whether LTC insurance is a good product for any specific person.
Your prior post stated, that today's LTCi policies "might turn out to be little or no better than the prior policies." I was simply stating that the new/improved policies (which came out around 1997) are paying a lot of claims because they have better consumer protections than the policies that were sold before that.
So the old policies weren't paying out to policy holders?
Most policies sold before 1997 had a 3-day prior hospital stay requirement.
Most policies sold before 1997 excluded Alzheimer's.
Most policies sold before 1997 would only pay for home care if you needed rehabilitative care also.

These policies paid benefits according to the benefit qualifications in the policy, HOWEVER,

Most people who need long-term care do NOT have a 3-day prior hospital stay before needing care.
Most people who need long-term care have Alzheimer's or some other cognitive impairment.
Most people who need long-term care do NOT need rehabilitative care, only personal care.

The federal gov't passed legislation in 1996 essentially requiring the insurance industry to remove these restrictions from all NEW policies.
The law did not remove these restrictions from the old policies.

Comparing the old policies sold before 1997 to today's policies is like comparing a cassette tape to Spotify.

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willthrill81
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Re: long term care insurance

Post by willthrill81 » Mon Aug 05, 2019 10:06 pm

WoW2012 wrote:
Mon Aug 05, 2019 9:53 pm
willthrill81 wrote:
Mon Aug 05, 2019 7:43 pm
WoW2012 wrote:
Mon Aug 05, 2019 6:40 pm
willthrill81 wrote:
Mon Aug 05, 2019 6:33 pm
WoW2012 wrote:
Mon Aug 05, 2019 6:24 pm


This year about 300,000 families will receive about $15 billion in long-term care insurance benefits. It's working for a lot of people.
That alone doesn't say anything about whether LTC insurance is a good product for any specific person.
Your prior post stated, that today's LTCi policies "might turn out to be little or no better than the prior policies." I was simply stating that the new/improved policies (which came out around 1997) are paying a lot of claims because they have better consumer protections than the policies that were sold before that.
So the old policies weren't paying out to policy holders?
Most policies sold before 1997 had a 3-day prior hospital stay requirement.
Most policies sold before 1997 excluded Alzheimer's.
Most policies sold before 1997 would only pay for home care if you needed rehabilitative care also.

These policies paid benefits according to the benefit qualifications in the policy, HOWEVER,

Most people who need long-term care do NOT have a 3-day prior hospital stay before needing care.
Most people who need long-term care have Alzheimer's or some other cognitive impairment.
Most people who need long-term care do NOT need rehabilitative care, only personal care.

The federal gov't passed legislation in 1996 essentially requiring the insurance industry to remove these restrictions from all NEW policies.
The law did not remove these restrictions from the old policies.

Comparing the old policies sold before 1997 to today's policies is like comparing a cassette tape to Spotify.
So the industry was providing junk before the federal government forced them to do otherwise, but they are now providing great products? I won't apologize for remaining dubious about the whole affair.

I agree with nisiprius who said earlier that when it comes to paying for LTC, there are no good options (unless you're willing and able to self-insure).
“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

WoW2012
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Re: long term care insurance

Post by WoW2012 » Mon Aug 05, 2019 11:25 pm

willthrill81 wrote:
Mon Aug 05, 2019 10:06 pm

So the industry was providing junk before the federal government forced them to do otherwise, but they are now providing great products? I won't apologize for remaining dubious about the whole affair.

I agree with nisiprius who said earlier that when it comes to paying for LTC, there are no good options (unless you're willing and able to self-insure).
Why are you dubious?
A federal audit of long-term care insurers showed that the improvements made to long-term care insurance in 1997 are working?
https://aspe.hhs.gov/pdf-report/nationa ... -payments

Why are you dubious?
Over 1,000,000 families have received over $100 BILLION (with a "B") of long-term care insurance benefits. (Over $50 Billion of that has been incurred in just the last 5 years.)

Why are you dubious?
This year over 300,000 families will receive over $15 billion of long-term care insurance benefits. My family is one of them. We'll receive over $70,000 from my mother-in-law's policy this year. The influx of close to $400,000 from my mother-in-law's policy will have added enough to her portfolio to guarantee that she'll never have to go on Medicaid and she can remain in her beautiful assisted-living facility (which does not accept Medicaid). There's no need for an unlimited policy. Her policy was only for "3 years". Right now her net worth is growing every year by about $55,000, not including capital appreciation on her stocks.

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WoodSpinner
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Re: long term care insurance

Post by WoodSpinner » Tue Aug 06, 2019 12:32 am

Great thread! I really am learning a lot about an area that I haven’t been focusing on.

So, here goes my question....

As a DIYer and aspiring Boglehead, are there any tools, guidelines or fee-only advisors that can help me evaluate my LTC Policy bought in 1999 through CalPERS?

Evidently this area of my financial life needs some attention.

WoodSpinner

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willthrill81
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Re: long term care insurance

Post by willthrill81 » Tue Aug 06, 2019 12:51 am

WoW2012 wrote:
Mon Aug 05, 2019 11:25 pm
willthrill81 wrote:
Mon Aug 05, 2019 10:06 pm

So the industry was providing junk before the federal government forced them to do otherwise, but they are now providing great products? I won't apologize for remaining dubious about the whole affair.

I agree with nisiprius who said earlier that when it comes to paying for LTC, there are no good options (unless you're willing and able to self-insure).
Why are you dubious?
A federal audit of long-term care insurers showed that the improvements made to long-term care insurance in 1997 are working?
https://aspe.hhs.gov/pdf-report/nationa ... -payments

Why are you dubious?
Over 1,000,000 families have received over $100 BILLION (with a "B") of long-term care insurance benefits. (Over $50 Billion of that has been incurred in just the last 5 years.)

Why are you dubious?
This year over 300,000 families will receive over $15 billion of long-term care insurance benefits. My family is one of them. We'll receive over $70,000 from my mother-in-law's policy this year. The influx of close to $400,000 from my mother-in-law's policy will have added enough to her portfolio to guarantee that she'll never have to go on Medicaid and she can remain in her beautiful assisted-living facility (which does not accept Medicaid). There's no need for an unlimited policy. Her policy was only for "3 years". Right now her net worth is growing every year by about $55,000, not including capital appreciation on her stocks.
I'm dubious because this is an industry that, according to you, was selling basically junk policies until the federal government stepped in and forced them to overhaul it. And not too long after that, the actuaries' huge error resulted in many policies being priced so high that many long time policyholders were left unable to pay for them, which resulted in many states then stepping in to regulate premium increases on new policies. It strongly appears that the improvements in the industry have been forced upon it, and that doesn't lend faith in the industry itself.

"Fool me once, shame on you. Fool me twice, shame on me."

I'm dubious of the prices on policies currently on the market. If the actuaries messed up badly once, they could do it again, or some other change could occur which would result in substantial increases in premiums. And if they 'actuarially fair', then regulators may not have much choice but to permit the increases. A lot can change over the course of the 20-30 year period or longer that someone may hold a LTC policy.

I'm dubious as to how many people actually stand to really benefit from LTC insurance. The majority of retirees clearly do not need it since they do not have enough assets to protect, and a LTC event lasting longer than a few months will almost certainly result in them falling back on Medicaid. And many on this forum can certainly self-insure LTC. So there is a relatively narrow band of net worth where I believe that the math indicates that LTC insurance may be useful.

I'm dubious of what LTC insurance has morphed into, a product where most of your premiums are going toward prepayment of a likely but not financially detrimental event (i.e. LTC event lasting up to a few years) with relatively little premium funding the very unlikely but potentially detrimental event (i.e. LTC event lasting for many years). Michael Kitces summed this up very well below.
Insurance functions best when it is used to cover high-cost low-probability risks – the kind that aren’t likely to occur, but would be devastating if they did. Technically, paying insurance premiums on an ongoing basis has a slightly greater expected loss than just retaining the risk, but an appealing trade-off if it means converting a potential financial disaster into a manageable ongoing premium.

Yet when it comes to long-term care needs in today’s environment, what was perhaps once a higher-cost lower-probability event has now turned into a very high-probability event with an increasingly large volume of “lower-cost” claims. As a result, long-term care insurance has begun to morph from effective insurance, into something that looks more like just prepaying long-term care expenses in advance at a high premium rate and with little insurance leverage.
https://www.kitces.com/blog/can-increas ... ing-again/

And, like Kitces and many others here, the 'solution' that I would rush toward is simple: a LTC policy with a long elimination period. States' regulations currently prohibit this, but I'm not convinced that the industry couldn't craft a product that would effectively sidestep such regulations if they wanted to.
As a result, perhaps it’s time to reform long-term care insurance policies so they once again focus on covering (only) high-impact low-probability events. For instance, what if elimination periods for long-term care insurance were increased to allow for a 2 or 3 year deductible, instead of today’s common 3-month period, and individuals could then take the significant premium savings and use it to cover their care during that time period? Could such an increase in deductibles reduce the cost of long-term care insurance coverage enough to make it affordable once again to most of the general public?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: long term care insurance

Post by Misenplace » Tue Aug 06, 2019 10:24 am

Please keep the discussion on topic and respectful. The debate became contentious and several posts had to be removed. From the forum policies, linked at the top of every page:
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