Long Term Care Insurance

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WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

willthrill81 wrote: Thu Jan 27, 2022 10:25 pm
Wannaretireearly wrote: Thu Jan 27, 2022 7:03 pm For LtCi, Is there a recommended service like select quote for life insurance?
Seems pretty random how to navigate this.
Not to my knowledge. In reality, there aren't that many companies still selling LTCi. You can check with your state's insurance commissioner's office to see which insurers are still licensed to sell it in your state.
There are 10 companies selling LTCi today. The hard part is that very few agents specialize in it. Most investment advisors only sell over priced cash value life insurance but they call it "long term care insurance." But the biggest problem is that you have to be very healthy in order to buy a policy. Most people wait to long to apply for a policy and get declined due to their chronic health issues.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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willthrill81
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Re: Long Term Care Insurance

Post by willthrill81 »

WoW2012 wrote: Mon Feb 07, 2022 12:08 am
A-Commoner wrote: Sun Feb 06, 2022 1:04 pm In Los Angeles today, the cost of long term care (ie the actual care, not the cost of premiums) is about $11k per month. Assuming both me and my wife land in a nursing home today and live there for 3 years, our total out of pocket cost is $792K.

If one already has at least $792k saved up, does it still make sense to buy LTC insurance? I’d much rather invest that in a 60:40 portfolio. In 30 years when long term care may really be needed, there would be more money to spend on the actual care than burning it off paying those premiums for 30 years.
Why do you think you and your wife will only need 3 years of care?
As I noted above, and which you are also well aware of, only a small number of those who ever need any LTC need the level of care that costs $11k, which is likely nursing home care. And about 75% of those who need that level of care need it for fewer than three years. It's obviously possible to need it for significantly longer than that, but the likelihood of both spouses consuming more than $800k of LTC is pretty remote. The data below from the AALTCI shows that out of 5,400 claims paid, which is out of over 10,000 insured people, the maximum amount paid for anyone was $1.9m.

Image
https://www.aaltci.org/long-term-care-i ... im-amounts
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WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

willthrill81 wrote: Mon Feb 07, 2022 9:40 am
WoW2012 wrote: Mon Feb 07, 2022 12:08 am
A-Commoner wrote: Sun Feb 06, 2022 1:04 pm In Los Angeles today, the cost of long term care (ie the actual care, not the cost of premiums) is about $11k per month. Assuming both me and my wife land in a nursing home today and live there for 3 years, our total out of pocket cost is $792K.

If one already has at least $792k saved up, does it still make sense to buy LTC insurance? I’d much rather invest that in a 60:40 portfolio. In 30 years when long term care may really be needed, there would be more money to spend on the actual care than burning it off paying those premiums for 30 years.
Why do you think you and your wife will only need 3 years of care?
As I noted above, and which you are also well aware of, only a small number of those who ever need any LTC need the level of care that costs $11k, which is likely nursing home care. And about 75% of those who need that level of care need it for fewer than three years. It's obviously possible to need it for significantly longer than that, but the likelihood of both spouses consuming more than $800k of LTC is pretty remote. The data below from the AALTCI shows that out of 5,400 claims paid, which is out of over 10,000 insured people, the maximum amount paid for anyone was $1.9m.

Image
https://www.aaltci.org/long-term-care-i ... im-amounts


The 1.9 million dollar claim was for a woman with dementia who started needing care 20 years ago.
How big do you think the claims will be 20 years from now?


wow!
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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willthrill81
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Re: Long Term Care Insurance

Post by willthrill81 »

WoW2012 wrote: Mon Feb 07, 2022 9:51 am The 1.9 million dollar claim was for a woman with dementia who started needing care 20 years ago.
How big do you think the claims will be 20 years from now?
Adjusted for inflation, probably something like double that.

But again, that's focusing on the very worst case scenario out of over 10,0000 people. Many here are fine with taking on that risk, given the alternative.
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WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

fortunefavored wrote: Sun Feb 06, 2022 12:26 pm
WoW2012 wrote: Sun Feb 06, 2022 11:52 am
fortunefavored wrote: Thu Jan 27, 2022 9:30 am Like all insurance, you have to ask yourself why you are carrying it.

For most people, they want LTC to insure against catastrophic LTC costs. Unfortunately these plans no longer exist - you will quickly find they all have maximum payouts that top out in the $500K range (plus all the other hoops and restrictions you allude to.)

For most retiring early Bogleheads, $100K to $500K of payouts isn't going to be very useful in a true "20 years of alzheimer's care" scenario, so self-insuring makes more sense.

You're better off looking at other estate planning moves in a catastrophic scenario (especially if married.)
This post is incorrect. There are catastrophic long term care policies for sale in every state.
We're looking for details. Can you outline a few typical scenarios and coverage, elimination periods, inflation adjustments, rate increase limits, etc.? Do people actually buy them? I thought they existed 2 years ago because everybody said so, but when I called around there was no such thing. They all had onerous limitations and maximum payouts.

When someone contacts me asking for a policy to protect from a catastrophic long-term care scenario I can offer them a traditional long-term care policy with a lifetime/unlimited benefit period in 48 different states. They can also buy a hybrid policy (which combines some type of life insurance with a long-term care rider). It also has a lifetime/unlimited benefit period. That's available in 49 states.

New York state is the odd duck.
If you're single, the most you can buy is 8 years of benefits.
If you're married you and your spouse/partner can share 16 years of benefits.

There are dozens of inflation protection choices, a few different elimination period options (including a policy with a 4 year elimination period), "rate increase limits" in the 41 states that have passed the Rate Stability Regulation, and "yes" people actually do buy them.

Just make sure you contact a long-term care insurance specialist with a lot of experience who represents a lot of different companies. Most insurance agents know very little about long-term care insurance.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

willthrill81 wrote: Mon Feb 07, 2022 9:56 am
WoW2012 wrote: Mon Feb 07, 2022 9:51 am The 1.9 million dollar claim was for a woman with dementia who started needing care 20 years ago.
How big do you think the claims will be 20 years from now?
Adjusted for inflation, probably something like double that.

But again, that's focusing on the very worst case scenario out of over 10,0000 people. Many here are fine with taking on that risk, given the alternative.

I agree with you. But I find it strange that some people will buy collision insurance on their $80,000 truck that they paid cash for and not buy long-term care insurance. The maximum loss for the truck is only $80,000. The maximum loss for a long-term care event is unknown and potentially high six-figures if not seven.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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willthrill81
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Re: Long Term Care Insurance

Post by willthrill81 »

WoW2012 wrote: Mon Feb 07, 2022 10:05 am
willthrill81 wrote: Mon Feb 07, 2022 9:56 am
WoW2012 wrote: Mon Feb 07, 2022 9:51 am The 1.9 million dollar claim was for a woman with dementia who started needing care 20 years ago.
How big do you think the claims will be 20 years from now?
Adjusted for inflation, probably something like double that.

But again, that's focusing on the very worst case scenario out of over 10,0000 people. Many here are fine with taking on that risk, given the alternative.
I agree with you. But I find it strange that some people will buy collision insurance on their $80,000 truck that they paid cash for and not buy long-term care insurance. The maximum loss for the truck is only $80,000. The maximum loss for a long-term care event is unknown and potentially high six-figures if not seven.
I agree that people do many irrational things, including buying insurance on a cell phone that they paid for with $500 cash.
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Wannaretireearly
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Re: Long Term Care Insurance

Post by Wannaretireearly »

My hope/wish is at the time I may need LTC, Hopefully it’s gradual and obvious, find me a home somewhere very warm with great nursing care and relatively cheaper than the US. First class one way ticket to Thailand, Philippines etc
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willthrill81
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Re: Long Term Care Insurance

Post by willthrill81 »

Wannaretireearly wrote: Mon Feb 07, 2022 10:28 am My hope/wish is at the time I may need LTC, Hopefully it’s gradual and obvious, find me a home somewhere very warm with great nursing care and relatively cheaper than the US. First class one way ticket to Thailand, Philippines etc
I'm somewhat familiar with medical tourism, but I've never heard of LTC tourism. Do you know anyone who has done this or know of any resources for pertinent information?

An obvious threat to this is national borders being closed, as we saw with COVID.
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Ray_McKigney
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Re: Long Term Care Insurance

Post by Ray_McKigney »

WoW2012 wrote: Mon Feb 07, 2022 9:51 am
willthrill81 wrote: Mon Feb 07, 2022 9:40 am
WoW2012 wrote: Mon Feb 07, 2022 12:08 am
A-Commoner wrote: Sun Feb 06, 2022 1:04 pm In Los Angeles today, the cost of long term care (ie the actual care, not the cost of premiums) is about $11k per month. Assuming both me and my wife land in a nursing home today and live there for 3 years, our total out of pocket cost is $792K.

If one already has at least $792k saved up, does it still make sense to buy LTC insurance? I’d much rather invest that in a 60:40 portfolio. In 30 years when long term care may really be needed, there would be more money to spend on the actual care than burning it off paying those premiums for 30 years.
Why do you think you and your wife will only need 3 years of care?
As I noted above, and which you are also well aware of, only a small number of those who ever need any LTC need the level of care that costs $11k, which is likely nursing home care. And about 75% of those who need that level of care need it for fewer than three years. It's obviously possible to need it for significantly longer than that, but the likelihood of both spouses consuming more than $800k of LTC is pretty remote. The data below from the AALTCI shows that out of 5,400 claims paid, which is out of over 10,000 insured people, the maximum amount paid for anyone was $1.9m.

Image
https://www.aaltci.org/long-term-care-i ... im-amounts
The 1.9 million dollar claim was for a woman with dementia who started needing care 20 years ago.
How big do you think the claims will be 20 years from now?


wow!
If a 60 year old female wanted to insure for such a scenario, how much would the premiums be for a new policy that provides $1.9 million of LTC coverage for an individual?

$18,000 per year? More?

And being the expert, how big do YOU think the claims will be 20 years from now?

And how much would the premiums be for a new policy that provides that much benefit for a 60 year old female?

$30,000 per year? More?

Thanks.
Last edited by Ray_McKigney on Mon Feb 07, 2022 3:47 pm, edited 4 times in total.
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tj
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Re: Long Term Care Insurance

Post by tj »

Ray_McKigney wrote: Mon Feb 07, 2022 3:16 pm
WoW2012 wrote: Mon Feb 07, 2022 9:51 am
willthrill81 wrote: Mon Feb 07, 2022 9:40 am
WoW2012 wrote: Mon Feb 07, 2022 12:08 am
A-Commoner wrote: Sun Feb 06, 2022 1:04 pm In Los Angeles today, the cost of long term care (ie the actual care, not the cost of premiums) is about $11k per month. Assuming both me and my wife land in a nursing home today and live there for 3 years, our total out of pocket cost is $792K.

If one already has at least $792k saved up, does it still make sense to buy LTC insurance? I’d much rather invest that in a 60:40 portfolio. In 30 years when long term care may really be needed, there would be more money to spend on the actual care than burning it off paying those premiums for 30 years.
Why do you think you and your wife will only need 3 years of care?
As I noted above, and which you are also well aware of, only a small number of those who ever need any LTC need the level of care that costs $11k, which is likely nursing home care. And about 75% of those who need that level of care need it for fewer than three years. It's obviously possible to need it for significantly longer than that, but the likelihood of both spouses consuming more than $800k of LTC is pretty remote. The data below from the AALTCI shows that out of 5,400 claims paid, which is out of over 10,000 insured people, the maximum amount paid for anyone was $1.9m.

Image
https://www.aaltci.org/long-term-care-i ... im-amounts


The 1.9 million dollar claim was for a woman with dementia who started needing care 20 years ago.
How big do you think the claims will be 20 years from now?


wow!
If someone wanted to insure for such a scenario, how much would the monthly premiums be for a new policy that provides $1.9 million of coverage for an individual?

$1500 per month? Or more?
Doesn't that highly depend on how old you are when you purchase the insurance?
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Ray_McKigney
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Re: Long Term Care Insurance

Post by Ray_McKigney »

Yes, thanks. I edited my question.
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4thand11
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Re: Long Term Care Insurance

Post by 4thand11 »

I have been looking into LTC insurance for me and my wife but the standard policies seem prohibitively expensive and the coverage may not be enough for something catastrophic.

I've been researching some of they hybrid life/LTC models such as OneAmerica Asset Care. It seems like it could be a better option. Very expensive but gives a death benefit if you don't use it and pays a monthly LTC benefit for life if you do, with no cap on the length. Can also be purchased for both husband and wife on the same policy. I think you can get it with inflation protection but that makes it really out of the range of many people of average means. If you Google it you can find some websites with pretty good overviews of how the policy works.
Wannaretireearly
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Re: Long Term Care Insurance

Post by Wannaretireearly »

willthrill81 wrote: Mon Feb 07, 2022 10:38 am
Wannaretireearly wrote: Mon Feb 07, 2022 10:28 am My hope/wish is at the time I may need LTC, Hopefully it’s gradual and obvious, find me a home somewhere very warm with great nursing care and relatively cheaper than the US. First class one way ticket to Thailand, Philippines etc
I'm somewhat familiar with medical tourism, but I've never heard of LTC tourism. Do you know anyone who has done this or know of any resources for pertinent information?

An obvious threat to this is national borders being closed, as we saw with COVID.
I don’t have more info. But, hope others may have?
In reality, would probably need to set this up abroad a few years before actually needing LTC. E.g. mid 70s, early 80s.
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Snezz1e
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Re: Long Term Care Insurance

Post by Snezz1e »

Federal Government Employee. Already max all tax advantaged accounts so I was thinking of putting some money towards LTC. I was leaning towards self-insuring but looking at the numbers I think a small policy could make sense.

Premiums can be quoted here without talking to anyone https://www.ltcfeds.com/tools/premium-calculator

For a 34 year old $100/day for 2 years ($73k total) with 3% inflation protection is only $386.52.

I picked this amount because I think it will likely be fully utilized. Anything higher could be wasted. For Nevada, the site estimate LTC cost at $123-228 depending on type of care. The premium difference for $100 day vs. $200 day is exactly double. Paying double premiums when you might end up using lower cost service could potentially result in paying extra for something you won't use. I do understand if you use less then daily limit you can use in future if you need LTC longer than 2 years but another statistics states average for men is 2 years of LTC.

This is version 3 of the federal plan and they supposedly built in better protection against future premium increases.

Assuming no premium increases it'll take 55 years at 4% real return after taxes to break even. So I end up ahead if I need LTC before 90. That's a larger return then some members are using when planning retirement. A more conservative number would make it more in favor of getting LTC insurance.

Finally, I've been maxing my HSA contribution every year and haven't touch it. I have doubts I will be able to exhaust it from just medical expenses so some of the money withdrawn during retirement will be subject to regular income taxes. At my current age i can withdraw up to $450 a year to pay for LTC insurance. Correct me if I'm wrong but having all premiums covered by HSA funds means I'm essentially getting a 22-25% discount on premiums depending on what tax bracket I'm in now and in the future. Could be significantly more for those in a high income tax state.

There's a chance I won't need LTC at all but I think there is a high likelihood I will need it and will use all the benefits I paid for when I do. If I'm wrong I don't think I'm losing out on much. If I'm right I think I'm getting a great rate of return. If I need LTC beyond 2 years I think I would of save enough to self-insure the rest.

Also this is based off the publicly available rates for federal employees. If I can get a even lower rate from a private insurer that would be even better.
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Re: Long Term Care Insurance

Post by WoW2012 »

Snezz1e wrote: Mon Feb 07, 2022 8:52 pm Federal Government Employee. Already max all tax advantaged accounts so I was thinking of putting some money towards LTC. I was leaning towards self-insuring but looking at the numbers I think a small policy could make sense.

Premiums can be quoted here without talking to anyone https://www.ltcfeds.com/tools/premium-calculator

For a 34 year old $100/day for 2 years ($73k total) with 3% inflation protection is only $386.52.

I picked this amount because I think it will likely be fully utilized. Anything higher could be wasted. For Nevada, the site estimate LTC cost at $123-228 depending on type of care. The premium difference for $100 day vs. $200 day is exactly double. Paying double premiums when you might end up using lower cost service could potentially result in paying extra for something you won't use. I do understand if you use less then daily limit you can use in future if you need LTC longer than 2 years but another statistics states average for men is 2 years of LTC.

This is version 3 of the federal plan and they supposedly built in better protection against future premium increases.

Assuming no premium increases it'll take 55 years at 4% real return after taxes to break even. So I end up ahead if I need LTC before 90. That's a larger return then some members are using when planning retirement. A more conservative number would make it more in favor of getting LTC insurance.

Finally, I've been maxing my HSA contribution every year and haven't touch it. I have doubts I will be able to exhaust it from just medical expenses so some of the money withdrawn during retirement will be subject to regular income taxes. At my current age i can withdraw up to $450 a year to pay for LTC insurance. Correct me if I'm wrong but having all premiums covered by HSA funds means I'm essentially getting a 22-25% discount on premiums depending on what tax bracket I'm in now and in the future. Could be significantly more for those in a high income tax state.

There's a chance I won't need LTC at all but I think there is a high likelihood I will need it and will use all the benefits I paid for when I do. If I'm wrong I don't think I'm losing out on much. If I'm right I think I'm getting a great rate of return. If I need LTC beyond 2 years I think I would of save enough to self-insure the rest.

Also this is based off the publicly available rates for federal employees. If I can get a even lower rate from a private insurer that would be even better.



If you're a single female you probably cannot get a lower rate from a private insurer.
If you're a single male you probably could get a lower rate from a private insurer.
If you're married and both very healthy, you probably could get a lower rate from a private insurer depending upon your state of residence when you apply for the policy.

If you're active duty military do NOT buy a policy from a private insurer. Buy the federal employee plan because it does not have a "war exclusion".
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
rookie87
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Re: Long Term Care Insurance

Post by rookie87 »

[

[/quote]

I seem to remember that "a rider is available" but I don't remember any indication of cost.
[/quote]

we have a life insurance policy through John Hancock with a LTC rider
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krafty81
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Re: Long Term Care Insurance

Post by krafty81 »

No expert here, but I read somewhere that the typical stay in LTC is less than two years.
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JoeRetire
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Re: Long Term Care Insurance

Post by JoeRetire »

Snezz1e wrote: Mon Feb 07, 2022 8:52 pm For a 34 year old $100/day for 2 years ($73k total) with 3% inflation protection is only $386.52.
34 is very young for LTCi.
I picked this amount because I think it will likely be fully utilized. Anything higher could be wasted.
How do you figure it could be wasted?

At 34, I think it would be impossible to determine LTC costs with that much precision. And I believe that the cost of long term care has been increasing more than 3% per year.
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Chardo
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Re: Long Term Care Insurance

Post by Chardo »

JoeRetire wrote: Sun Apr 17, 2022 5:59 am
Snezz1e wrote: Mon Feb 07, 2022 8:52 pm For a 34 year old $100/day for 2 years ($73k total) with 3% inflation protection is only $386.52.
34 is very young for LTCi.
I picked this amount because I think it will likely be fully utilized. Anything higher could be wasted.
How do you figure it could be wasted?

At 34, I think it would be impossible to determine LTC costs with that much precision. And I believe that the cost of long term care has been increasing more than 3% per year.
Not just cost, but it's impossible to determine the entire LTC landscape 50+ years from now. The baby boomers are just hitting their mid 70s. In the coming decades, there will be an explosion in need, and expenditure, for LTC. The whole concept of how and where care is provided, and how it's paid for, could be radically transformed by the time a 34 year old reaches old age.
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Re: Long Term Care Insurance

Post by mrc »

$100/day doesn't even cover the Medicare copay (for days 20-99), which is currently $194.50/day. In 2003, spouse and I began a G.E. (then Genworth) policy at $150/day with 5% inflation. It was considered a very good policy then for coverage amount, unlimited duration, 5% inflation, and several other perks. Had we not cancelled the policy two years ago, the current daily benefit would be $379. My mom entered a one-star (Medicare) SNF in February, and their normal private-pay day rate is $625.

Receiving $100/day or $379/day to help cover a $625/day charge is better than a kick in the head, but do be sure if you're going to insure, you have a meaningful benefit amount.
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Re: Long Term Care Insurance

Post by willthrill81 »

Ray_McKigney wrote: Mon Feb 07, 2022 3:16 pm
WoW2012 wrote: Mon Feb 07, 2022 9:51 am
willthrill81 wrote: Mon Feb 07, 2022 9:40 am
WoW2012 wrote: Mon Feb 07, 2022 12:08 am
A-Commoner wrote: Sun Feb 06, 2022 1:04 pm In Los Angeles today, the cost of long term care (ie the actual care, not the cost of premiums) is about $11k per month. Assuming both me and my wife land in a nursing home today and live there for 3 years, our total out of pocket cost is $792K.

If one already has at least $792k saved up, does it still make sense to buy LTC insurance? I’d much rather invest that in a 60:40 portfolio. In 30 years when long term care may really be needed, there would be more money to spend on the actual care than burning it off paying those premiums for 30 years.
Why do you think you and your wife will only need 3 years of care?
As I noted above, and which you are also well aware of, only a small number of those who ever need any LTC need the level of care that costs $11k, which is likely nursing home care. And about 75% of those who need that level of care need it for fewer than three years. It's obviously possible to need it for significantly longer than that, but the likelihood of both spouses consuming more than $800k of LTC is pretty remote. The data below from the AALTCI shows that out of 5,400 claims paid, which is out of over 10,000 insured people, the maximum amount paid for anyone was $1.9m.

Image
https://www.aaltci.org/long-term-care-i ... im-amounts
The 1.9 million dollar claim was for a woman with dementia who started needing care 20 years ago.
How big do you think the claims will be 20 years from now?


wow!
If a 60 year old female wanted to insure for such a scenario, how much would the premiums be for a new policy that provides $1.9 million of LTC coverage for an individual?

$18,000 per year? More?

And being the expert, how big do YOU think the claims will be 20 years from now?

And how much would the premiums be for a new policy that provides that much benefit for a 60 year old female?

$30,000 per year? More?

Thanks.
I would really have liked to see an answer to those questions.
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AnnetteLouisan
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Re: Long Term Care Insurance

Post by AnnetteLouisan »

Ray_McKigney wrote: Mon Feb 07, 2022 3:16 pm
WoW2012 wrote: Mon Feb 07, 2022 9:51 am
willthrill81 wrote: Mon Feb 07, 2022 9:40 am
WoW2012 wrote: Mon Feb 07, 2022 12:08 am
A-Commoner wrote: Sun Feb 06, 2022 1:04 pm In Los Angeles today, the cost of long term care (ie the actual care, not the cost of premiums) is about $11k per month. Assuming both me and my wife land in a nursing home today and live there for 3 years, our total out of pocket cost is $792K.

If one already has at least $792k saved up, does it still make sense to buy LTC insurance? I’d much rather invest that in a 60:40 portfolio. In 30 years when long term care may really be needed, there would be more money to spend on the actual care than burning it off paying those premiums for 30 years.
Why do you think you and your wife will only need 3 years of care?
As I noted above, and which you are also well aware of, only a small number of those who ever need any LTC need the level of care that costs $11k, which is likely nursing home care. And about 75% of those who need that level of care need it for fewer than three years. It's obviously possible to need it for significantly longer than that, but the likelihood of both spouses consuming more than $800k of LTC is pretty remote. The data below from the AALTCI shows that out of 5,400 claims paid, which is out of over 10,000 insured people, the maximum amount paid for anyone was $1.9m.

Image
https://www.aaltci.org/long-term-care-i ... im-amounts
The 1.9 million dollar claim was for a woman with dementia who started needing care 20 years ago.
How big do you think the claims will be 20 years from now?


wow!
If a 60 year old female wanted to insure for such a scenario, how much would the premiums be for a new policy that provides $1.9 million of LTC coverage for an individual?

$18,000 per year? More?

And being the expert, how big do YOU think the claims will be 20 years from now?

And how much would the premiums be for a new policy that provides that much benefit for a 60 year old female?

$30,000 per year? More?

Thanks.
I’m a 55 year old female and I pay $62/mo for up to $350/day traditional LTCI coverage with a future purchase option (FPO) but no inflation protection (John Hancock, heavily subsidized through my employer). I don’t have the policy handy so I can’t tell you the elimination period. I think the max coverage is three years.

My premium has risen only $7/month since I bought this at age 44 with no underwriting needed (which is why I bought early) and I generally decline the future purchase option every two years (I may have elected it one year). My rep told me when I bought the policy (after reading the materials for months and interrogating him for 45 minutes on my concern about premium increases) that the inflation protection feature is associated with higher premium increases and that buying a higher daily coverage amount can substitute for inflation protection. So make sure you understand your insurance company’s inflation protection feature vs FPO. FPO seems to give you more control. YMMV.
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Ray_McKigney
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Re: Long Term Care Insurance

Post by Ray_McKigney »

Thanks for sharing, but the premiums for a policy purchased 11 years ago are simply not relevant to someone currently shopping for a policy today.

Truth is, the current cost of the product (a new LTCi policy) is very rarely mentioned or discussed in the threads that discuss the product.

In a bogleheads forum. Funny, that.
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Ray_McKigney
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Re: Long Term Care Insurance

Post by Ray_McKigney »

WoW2012 won't hesitate to discuss the potential cost of not buying the product, though. No matter how rare that potential outcome might be.
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WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

Ray_McKigney wrote: Tue Apr 19, 2022 12:14 am Thanks for sharing, but the premiums for a policy purchased 11 years ago are simply not relevant to someone currently shopping for a policy today.

Truth is, the current cost of the product (a new LTCi policy) is very rarely mentioned or discussed in the threads that discuss the product.

In a bogleheads forum. Funny, that.
I've shared real quotes on this forum multiple times. You may want to go back and read my posts.

LTCi premiums are are based upon age, state of residence, marital status, health history, and policy features. I have clients who pay $40 per month for their LTCi policy. I have other clients who have paid close to $300,000 in one-time, lump sum premium for an asset-based policy.

Since many people on this forum are fond of averages, according to the most recent data, as of the end of 2021, the average long-term care insurance policy costs $2,476 per year. That includes ALL premium increases.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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willthrill81
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Re: Long Term Care Insurance

Post by willthrill81 »

Ray_McKigney wrote: Tue Apr 19, 2022 12:14 am Thanks for sharing, but the premiums for a policy purchased 11 years ago are simply not relevant to someone currently shopping for a policy today.

Truth is, the current cost of the product (a new LTCi policy) is very rarely mentioned or discussed in the threads that discuss the product.

In a bogleheads forum. Funny, that.
Yes, many don't realize how disparate LTCi is today from what it was just a decade ago. And I agree that there isn't enough discussion regarding the cost of LTCi. It's trivial to look up the cost of term life insurance, but I don't believe that you can even see the premiums of many LTCi policies without speaking to an agent.
WoW2012 wrote: Tue Apr 19, 2022 9:08 am Since many people on this forum are fond of averages, according to the most recent data, as of the end of 2021, the average long-term care insurance policy costs $2,476 per year. That includes ALL premium increases.
I don't believe that most here would be interested in the 'average LTCi policy' though because the maximum benefit is just too small.

Most here aren't really concerned about $300k of LTC expenses but rather multiples of that.
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WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

willthrill81 wrote: Tue Apr 19, 2022 9:44 am
...but I don't believe that you can even see the premiums of many LTCi policies without speaking to an agent.
I guess you've never been to my website.
We send a customized quote (no phone required).
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
LeeMKE
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Re: Long Term Care Insurance

Post by LeeMKE »

Just make sure you contact a long-term care insurance specialist with a lot of experience who represents a lot of different companies. Most insurance agents know very little about long-term care insurance.
I can second this advice. Don't make a decision based on some stranger on the internet who doesn't carry the coverage. And certainly get advice from an agent who specializes in LTCi, not someone tilted toward selling some policy that "could" be used for LTC.

In my case, I purchased this insurance to supplement retirement income in case of a worst case scenario (early diagnosis for one person in a couple). I purchased it at age 50, to get a decent rate and to avoid waiting until pre-existing conditions disqualified one or both of us. No way would I consider care covered under medicaid as suitable nor preferable -- I saw that care when I was interning as a Medical Social Worker.

I buy insurance for those possibilities for which I cannot self-insure. With a couple, I am insuring to prevent the last man standing from being impoverished. As a single person, I continue the coverage to remove the expense, above current expenses, from my retirement planning.

I don't buy collision coverage for autos, I don't insure comestibles (like cell phones, etc.). But I bought expensive private disability/income replacement coverage when I was working and single, dropped it once my portfolio was sufficient to replace the benefit. I bought umbrella coverage when we had teenagers who are a danger to themselves and others as they enter their experimentation phase. So I don't overinsure, but I insure for possibilities that would impoverish me.

I prefer to eliminate this possibility from my withdrawal strategy. Having my policy allows me to increase my draws. Retirement would be much more skinny if I tried to self-insure.

BTW, there is also a tax deduction for LTCi (I think this is a deduction -- I know TurboTax has me report it each year, but I can't vouch for having confirmed it on my final submittal).
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Re: Long Term Care Insurance

Post by tj »

WoW2012 wrote: Tue Apr 19, 2022 10:01 am
willthrill81 wrote: Tue Apr 19, 2022 9:44 am
...but I don't believe that you can even see the premiums of many LTCi policies without speaking to an agent.
I guess you've never been to my website.
We send a customized quote (no phone required).
I thought you've never shared your website.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

tj wrote: Tue Apr 19, 2022 12:33 pm
WoW2012 wrote: Tue Apr 19, 2022 10:01 am
willthrill81 wrote: Tue Apr 19, 2022 9:44 am
...but I don't believe that you can even see the premiums of many LTCi policies without speaking to an agent.
I guess you've never been to my website.
We send a customized quote (no phone required).
I thought you've never shared your website.
You're correct.
I've never shared my website.
If I did I would be banned from the forum for soliciting.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Poodlefan
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Re: Long Term Care Insurance

Post by Poodlefan »

We bought LTC insurance from TIAA Cref twenty plus years ago. It became increasingly expensive, to the point that we didn't pay extra for a cost of living addition! Then Met-Life bought them, then Farmer's Insurance bought some of Met-life. It was confusing. In fairness, Met-Life kept their own department for LTC. We have benefits for the length of both of our lives. Won't cover all the expenses, jut about half, thanks to inflation. May not if we need skilled nursing care, which is now INCREDIBLY expensive. We will be collecting for assisted living for my husband. I think the insurance will kick in having spoken to them. The adjusters, or contact people, for the TIAA Cref old plan, are extremely nice. (I have not heard this about other plans, even those Met Life offered.) I was told that the payment for life plans no longer exist. Also, one should REALLY check out the medical requirements for collecting.They are more stringent than you might think. In our case, I could not have counted on other care due to a small family without ability to care for us if disaster befell. As it happens, in the twenty years we might
have saved enough to probably cover expenses. We are 78 and 87 and probably will not outlive our savings and insurance. I don't know, frankly, what I would recommend a person to do. I think of the line from the movie Dirty Harry, "Are you feeling lucky, punk?" when I wrestle with the logic of LTC insurance.
tj
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Re: Long Term Care Insurance

Post by tj »

WoW2012 wrote: Tue Apr 19, 2022 12:53 pm
tj wrote: Tue Apr 19, 2022 12:33 pm
WoW2012 wrote: Tue Apr 19, 2022 10:01 am
willthrill81 wrote: Tue Apr 19, 2022 9:44 am
...but I don't believe that you can even see the premiums of many LTCi policies without speaking to an agent.
I guess you've never been to my website.
We send a customized quote (no phone required).
I thought you've never shared your website.
You're correct.
I've never shared my website.
If I did I would be banned from the forum for soliciting.
I don't think that's necessarily true. There's plenty of non-anonymous Bogleheads that Bogleheads know there to find their service.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

tj wrote: Tue Apr 19, 2022 2:47 pm
WoW2012 wrote: Tue Apr 19, 2022 12:53 pm
tj wrote: Tue Apr 19, 2022 12:33 pm
WoW2012 wrote: Tue Apr 19, 2022 10:01 am
willthrill81 wrote: Tue Apr 19, 2022 9:44 am
...but I don't believe that you can even see the premiums of many LTCi policies without speaking to an agent.
I guess you've never been to my website.
We send a customized quote (no phone required).
I thought you've never shared your website.
You're correct.
I've never shared my website.
If I did I would be banned from the forum for soliciting.
I don't think that's necessarily true. There's plenty of non-anonymous Bogleheads that Bogleheads know there to find their service.
I've been told differently by forum moderators.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
ncbill
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Re: Long Term Care Insurance

Post by ncbill »

willthrill81 wrote: Tue Apr 19, 2022 9:44 am
Ray_McKigney wrote: Tue Apr 19, 2022 12:14 am Thanks for sharing, but the premiums for a policy purchased 11 years ago are simply not relevant to someone currently shopping for a policy today.

Truth is, the current cost of the product (a new LTCi policy) is very rarely mentioned or discussed in the threads that discuss the product.

In a bogleheads forum. Funny, that.
Yes, many don't realize how disparate LTCi is today from what it was just a decade ago. And I agree that there isn't enough discussion regarding the cost of LTCi. It's trivial to look up the cost of term life insurance, but I don't believe that you can even see the premiums of many LTCi policies without speaking to an agent.
WoW2012 wrote: Tue Apr 19, 2022 9:08 am Since many people on this forum are fond of averages, according to the most recent data, as of the end of 2021, the average long-term care insurance policy costs $2,476 per year. That includes ALL premium increases.
I don't believe that most here would be interested in the 'average LTCi policy' though because the maximum benefit is just too small.

Most here aren't really concerned about $300k of LTC expenses but rather multiples of that.
Another issue is the relatively low annual caps I've seen here posted for annual benefits.

If I buy expensive hybrid LTC with an unlimited rider I don't want to see a $50,000/year cap on benefits when SNFs here (MCOL ares) already cost ~$10,000/month.

Curious how much that $300k plan WoW2012 sold pays out annually/lifetime.

I also wonder where people live that they think they can avoid SNFs that take Medicaid.

None of the stand-alone SNFs here would exist were it not for Medicaid...most of their residents are on it.

Only the local CCRCs here don't take Medicaid for their SNFs, but considering how many independent/assisted living apartments they have built feeding their internal SNF it's not very likely there will be a SNF bed when needed...the resident will likely be farmed out to a stand-alone SNF anyway.
Wrench
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Re: Long Term Care Insurance

Post by Wrench »

WoW2012 wrote: Tue Apr 19, 2022 10:01 am
willthrill81 wrote: Tue Apr 19, 2022 9:44 am
...but I don't believe that you can even see the premiums of many LTCi policies without speaking to an agent.
I guess you've never been to my website.
We send a customized quote (no phone required).
This site:
https://www.ltcshop.com/
will provide quotes by email after providing basic demographic data.

Wrench
Wrench
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Re: Long Term Care Insurance

Post by Wrench »

And this site:
https://www.newmanlongtermcare.com/run- ... are-quote/
gives premium ranges of low, median, and high, immediately on the web site with various options of payout, waiting period, daily benefit and health status.

Wrench
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gasdoc
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Re: Long Term Care Insurance

Post by gasdoc »

fortunefavored wrote: Thu Jan 27, 2022 9:30 am Like all insurance, you have to ask yourself why you are carrying it.

For most people, they want LTC to insure against catastrophic LTC costs. Unfortunately these plans no longer exist - you will quickly find they all have maximum payouts that top out in the $500K range (plus all the other hoops and restrictions you allude to.)

For most retiring early Bogleheads, $100K to $500K of payouts isn't going to be very useful in a true "20 years of alzheimer's care" scenario, so self-insuring makes more sense.

You're better off looking at other estate planning moves in a catastrophic scenario (especially if married.)
This is written well. I'll just add that I don't need a policy that tops out at $500,000. I can sell a house or sell equities to cover that. It is the rare (hopefully) catastrophic situation, like 15 years in a memory care unit that I want to insure against, and that kind of insurance is not available.

gasdoc
Silk McCue
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Re: Long Term Care Insurance

Post by Silk McCue »

gasdoc wrote: Tue Apr 19, 2022 7:11 pm
fortunefavored wrote: Thu Jan 27, 2022 9:30 am Like all insurance, you have to ask yourself why you are carrying it.

For most people, they want LTC to insure against catastrophic LTC costs. Unfortunately these plans no longer exist - you will quickly find they all have maximum payouts that top out in the $500K range (plus all the other hoops and restrictions you allude to.)

For most retiring early Bogleheads, $100K to $500K of payouts isn't going to be very useful in a true "20 years of alzheimer's care" scenario, so self-insuring makes more sense.

You're better off looking at other estate planning moves in a catastrophic scenario (especially if married.)
This is written well. I'll just add that I don't need a policy that tops out at $500,000. I can sell a house or sell equities to cover that. It is the rare (hopefully) catastrophic situation, like 15 years in a memory care unit that I want to insure against, and that kind of insurance is not available.

gasdoc
There are untold numbers of Bogleheads such as my wife and I that can’t possibly self-insure against long term term care needs. Our joint and eventual individual financial futures (when one of us passes) are more secure by spending $6300 per year for solid LTCi policies than not.

Those that are a multi millionaires more than likely can self insure.

Cheers
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Re: Long Term Care Insurance

Post by AnnetteLouisan »

Silk McCue wrote: Tue Apr 19, 2022 7:32 pm
gasdoc wrote: Tue Apr 19, 2022 7:11 pm
fortunefavored wrote: Thu Jan 27, 2022 9:30 am Like all insurance, you have to ask yourself why you are carrying it.

For most people, they want LTC to insure against catastrophic LTC costs. Unfortunately these plans no longer exist - you will quickly find they all have maximum payouts that top out in the $500K range (plus all the other hoops and restrictions you allude to.)

For most retiring early Bogleheads, $100K to $500K of payouts isn't going to be very useful in a true "20 years of alzheimer's care" scenario, so self-insuring makes more sense.

You're better off looking at other estate planning moves in a catastrophic scenario (especially if married.)
This is written well. I'll just add that I don't need a policy that tops out at $500,000. I can sell a house or sell equities to cover that. It is the rare (hopefully) catastrophic situation, like 15 years in a memory care unit that I want to insure against, and that kind of insurance is not available.

gasdoc
There are untold numbers of Bogleheads such as my wife and I that can’t possibly self-insure against long term term care needs. Our joint and eventual individual financial futures (when one of us passes) are more secure by spending $6300 per year for solid LTCi policies than not.

Those that are a multi millionaires more than likely can self insure.

Cheers
Right or we can supplement what LTCI covers, either with supplemental LTCI (which I have been pitched but declined) or our savings and investments. Given the cost it seems better to have than not.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

Wrench wrote: Tue Apr 19, 2022 4:54 pm
WoW2012 wrote: Tue Apr 19, 2022 10:01 am
willthrill81 wrote: Tue Apr 19, 2022 9:44 am
...but I don't believe that you can even see the premiums of many LTCi policies without speaking to an agent.
I guess you've never been to my website.
We send a customized quote (no phone required).
This site:
https://www.ltcshop.com/
will provide quotes by email after providing basic demographic data.

Wrench
I'll have to check it out.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

Wrench wrote: Tue Apr 19, 2022 5:02 pm And this site:
https://www.newmanlongtermcare.com/run- ... are-quote/
gives premium ranges of low, median, and high, immediately on the web site with various options of payout, waiting period, daily benefit and health status.

Wrench
interesting.
I don't quite get the "low", "median", "high" thing.
I wish they'd explain that better.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

fortunefavored wrote: Thu Jan 27, 2022 9:30 am
For most people, they want LTC to insure against catastrophic LTC costs. Unfortunately these plans no longer exist - you will quickly find they all have maximum payouts that top out in the $500K range (plus all the other hoops and restrictions you allude to.)
This is incorrect.
There are catastrophic plans.
Most of my clients buy policies with 10 to 15 years of shared benefits.
There are also policies with unlimited benefits, unless you live in New York.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

gasdoc wrote: Tue Apr 19, 2022 7:11 pm

This is written well. I'll just add that I don't need a policy that tops out at $500,000. I can sell a house or sell equities to cover that. It is the rare (hopefully) catastrophic situation, like 15 years in a memory care unit that I want to insure against, and that kind of insurance is not available.

gasdoc

That kind of insurance is available, especially for married couples.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

willthrill81 wrote: Tue Apr 19, 2022 9:44 am
I don't believe that most here would be interested in the 'average LTCi policy' though because the maximum benefit is just too small.

Most here aren't really concerned about $300k of LTC expenses but rather multiples of that.
How to turn $275,000 into $745,000 in 4 years.

My mother-in-law's LTCi policy had $365,000 of benefits when she started using it. She used $275,000 of it before she passed away. That $275,000 of benefits increased her net worth by about $745,000. Here's how:

Since she had the a good LTCi policy, we did not have to rush to sell her rental properties.
We saved over $100,000 of capital gains taxes by not having to sell her properties while she and her husband were alive.
She started receiving care at home, then she moved to an assisted living facility for three years before moving into our home. While in the assisted living facility, the policy covered all of her room and board and care. She didn't have to use her pensions or SS or any of her rental income. She was cash flow positive about $5,000+ every month. We invested that in dividend-paying stocks.
Since she didn't have to sell her investments to pay for her care, the money we did invest grew.... substantially.
The one rental property which she didn't sell gained more than $100,000 in value in the last six months before her death.
And, since we didn't have to sell it before she died we saved a boat load on capital gains on that property.
We invested dividend-paying stocks because, if she exhausted the policy's benefits, we wanted to make sure that her pensions, her SS income, and the dividend income would be enough to cover the full cost of her care, regardless of how long she might live. If we'd had to liquidate her assets from the start, we would not have been able to do that. We would have had to do Medicaid planning and that was something we did NOT want to do. The Medicaid facilities in our area are HORRIBLE compared to the private-pay facilities.
When she passed away we sold the stocks and did not have to pay any capital gains tax because of the step-up in cost basis. Most of the stocks, not all, but most had a substantial gain.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

WoW2012 wrote: Tue Apr 19, 2022 11:01 pm
willthrill81 wrote: Tue Apr 19, 2022 9:44 am
I don't believe that most here would be interested in the 'average LTCi policy' though because the maximum benefit is just too small.

Most here aren't really concerned about $300k of LTC expenses but rather multiples of that.
How to turn $275,000 into $745,000 in 4 years.

My mother-in-law's LTCi policy had $365,000 of benefits when she started using it. She used $275,000 of it before she passed away. That $275,000 of benefits increased her net worth by about $745,000. Here's how:

Since she had the a good LTCi policy, we did not have to rush to sell her rental properties.
We saved over $100,000 of capital gains taxes by not having to sell her properties while she and her husband were alive.
She started receiving care at home, then she moved to an assisted living facility for three years before moving into our home. While in the assisted living facility, the policy covered all of her room and board and care. She didn't have to use her pensions or SS or any of her rental income. She was cash flow positive about $5,000+ every month. We invested that in dividend-paying stocks.
Since she didn't have to sell her investments to pay for her care, the money we did invest grew.... substantially.
The one rental property which she didn't sell gained more than $100,000 in value in the last six months before her death.
And, since we didn't have to sell it before she died we saved a boat load on capital gains on that property.
We invested dividend-paying stocks because, if she exhausted the policy's benefits, we wanted to make sure that her pensions, her SS income, and the dividend income would be enough to cover the full cost of her care, regardless of how long she might live. If we'd had to liquidate her assets from the start, we would not have been able to do that. We would have had to do Medicaid planning and that was something we did NOT want to do. The Medicaid facilities in our area are HORRIBLE compared to the private-pay facilities.
When she passed away we sold the stocks and did not have to pay any capital gains tax because of the step-up in cost basis. Most of the stocks, not all, but most had a substantial gain.

crickets.....
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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Re: Long Term Care Insurance

Post by willthrill81 »

WoW2012 wrote: Thu Apr 21, 2022 10:27 pm
WoW2012 wrote: Tue Apr 19, 2022 11:01 pm
willthrill81 wrote: Tue Apr 19, 2022 9:44 am
I don't believe that most here would be interested in the 'average LTCi policy' though because the maximum benefit is just too small.

Most here aren't really concerned about $300k of LTC expenses but rather multiples of that.
How to turn $275,000 into $745,000 in 4 years.

My mother-in-law's LTCi policy had $365,000 of benefits when she started using it. She used $275,000 of it before she passed away. That $275,000 of benefits increased her net worth by about $745,000. Here's how:

Since she had the a good LTCi policy, we did not have to rush to sell her rental properties.
We saved over $100,000 of capital gains taxes by not having to sell her properties while she and her husband were alive.
She started receiving care at home, then she moved to an assisted living facility for three years before moving into our home. While in the assisted living facility, the policy covered all of her room and board and care. She didn't have to use her pensions or SS or any of her rental income. She was cash flow positive about $5,000+ every month. We invested that in dividend-paying stocks.
Since she didn't have to sell her investments to pay for her care, the money we did invest grew.... substantially.
The one rental property which she didn't sell gained more than $100,000 in value in the last six months before her death.
And, since we didn't have to sell it before she died we saved a boat load on capital gains on that property.
We invested dividend-paying stocks because, if she exhausted the policy's benefits, we wanted to make sure that her pensions, her SS income, and the dividend income would be enough to cover the full cost of her care, regardless of how long she might live. If we'd had to liquidate her assets from the start, we would not have been able to do that. We would have had to do Medicaid planning and that was something we did NOT want to do. The Medicaid facilities in our area are HORRIBLE compared to the private-pay facilities.
When she passed away we sold the stocks and did not have to pay any capital gains tax because of the step-up in cost basis. Most of the stocks, not all, but most had a substantial gain.

crickets.....
I'm glad things worked well for your MiL. But I don't know what your point is here. On average, insurance is a losing 'bet', even though some people 'win' big with it.
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beyou
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Re: Long Term Care Insurance

Post by beyou »

WoW2012 wrote: Thu Apr 21, 2022 10:27 pm
WoW2012 wrote: Tue Apr 19, 2022 11:01 pm
willthrill81 wrote: Tue Apr 19, 2022 9:44 am
I don't believe that most here would be interested in the 'average LTCi policy' though because the maximum benefit is just too small.

Most here aren't really concerned about $300k of LTC expenses but rather multiples of that.
How to turn $275,000 into $745,000 in 4 years.

My mother-in-law's LTCi policy had $365,000 of benefits when she started using it. She used $275,000 of it before she passed away. That $275,000 of benefits increased her net worth by about $745,000. Here's how:

Since she had the a good LTCi policy, we did not have to rush to sell her rental properties.
We saved over $100,000 of capital gains taxes by not having to sell her properties while she and her husband were alive.
She started receiving care at home, then she moved to an assisted living facility for three years before moving into our home. While in the assisted living facility, the policy covered all of her room and board and care. She didn't have to use her pensions or SS or any of her rental income. She was cash flow positive about $5,000+ every month. We invested that in dividend-paying stocks.
Since she didn't have to sell her investments to pay for her care, the money we did invest grew.... substantially.
The one rental property which she didn't sell gained more than $100,000 in value in the last six months before her death.
And, since we didn't have to sell it before she died we saved a boat load on capital gains on that property.
We invested dividend-paying stocks because, if she exhausted the policy's benefits, we wanted to make sure that her pensions, her SS income, and the dividend income would be enough to cover the full cost of her care, regardless of how long she might live. If we'd had to liquidate her assets from the start, we would not have been able to do that. We would have had to do Medicaid planning and that was something we did NOT want to do. The Medicaid facilities in our area are HORRIBLE compared to the private-pay facilities.
When she passed away we sold the stocks and did not have to pay any capital gains tax because of the step-up in cost basis. Most of the stocks, not all, but most had a substantial gain.

crickets.....
We have found that even private pay nursing homes are horrible in our area. Staffing shortages mean no help when needed. Bad food. Assisted Living, there are good options until they can’t meet your care needs.
User avatar
JoeRetire
Posts: 15381
Joined: Tue Jan 16, 2018 1:44 pm

Re: Long Term Care Insurance

Post by JoeRetire »

beyou wrote: Fri Apr 22, 2022 12:23 am
WoW2012 wrote: Thu Apr 21, 2022 10:27 pm
WoW2012 wrote: Tue Apr 19, 2022 11:01 pm
willthrill81 wrote: Tue Apr 19, 2022 9:44 am
I don't believe that most here would be interested in the 'average LTCi policy' though because the maximum benefit is just too small.

Most here aren't really concerned about $300k of LTC expenses but rather multiples of that.
How to turn $275,000 into $745,000 in 4 years.

My mother-in-law's LTCi policy had $365,000 of benefits when she started using it. She used $275,000 of it before she passed away. That $275,000 of benefits increased her net worth by about $745,000. Here's how:

Since she had the a good LTCi policy, we did not have to rush to sell her rental properties.
We saved over $100,000 of capital gains taxes by not having to sell her properties while she and her husband were alive.
She started receiving care at home, then she moved to an assisted living facility for three years before moving into our home. While in the assisted living facility, the policy covered all of her room and board and care. She didn't have to use her pensions or SS or any of her rental income. She was cash flow positive about $5,000+ every month. We invested that in dividend-paying stocks.
Since she didn't have to sell her investments to pay for her care, the money we did invest grew.... substantially.
The one rental property which she didn't sell gained more than $100,000 in value in the last six months before her death.
And, since we didn't have to sell it before she died we saved a boat load on capital gains on that property.
We invested dividend-paying stocks because, if she exhausted the policy's benefits, we wanted to make sure that her pensions, her SS income, and the dividend income would be enough to cover the full cost of her care, regardless of how long she might live. If we'd had to liquidate her assets from the start, we would not have been able to do that. We would have had to do Medicaid planning and that was something we did NOT want to do. The Medicaid facilities in our area are HORRIBLE compared to the private-pay facilities.
When she passed away we sold the stocks and did not have to pay any capital gains tax because of the step-up in cost basis. Most of the stocks, not all, but most had a substantial gain.

crickets.....
We have found that even private pay nursing homes are horrible in our area. Staffing shortages mean no help when needed. Bad food. Assisted Living, there are good options until they can’t meet your care needs.
Assisted living facilities are also subject to staff shortages. Much of their staff is drawn from the same pool of potential workers as nursing homes.
This isn't just my wallet. It's an organizer, a memory and an old friend.
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beyou
Posts: 6865
Joined: Sat Feb 27, 2010 2:57 pm
Location: If you can make it there

Re: Long Term Care Insurance

Post by beyou »

JoeRetire wrote: Fri Apr 22, 2022 6:13 am
beyou wrote: Fri Apr 22, 2022 12:23 am
WoW2012 wrote: Thu Apr 21, 2022 10:27 pm
WoW2012 wrote: Tue Apr 19, 2022 11:01 pm
willthrill81 wrote: Tue Apr 19, 2022 9:44 am
I don't believe that most here would be interested in the 'average LTCi policy' though because the maximum benefit is just too small.

Most here aren't really concerned about $300k of LTC expenses but rather multiples of that.
How to turn $275,000 into $745,000 in 4 years.

My mother-in-law's LTCi policy had $365,000 of benefits when she started using it. She used $275,000 of it before she passed away. That $275,000 of benefits increased her net worth by about $745,000. Here's how:

Since she had the a good LTCi policy, we did not have to rush to sell her rental properties.
We saved over $100,000 of capital gains taxes by not having to sell her properties while she and her husband were alive.
She started receiving care at home, then she moved to an assisted living facility for three years before moving into our home. While in the assisted living facility, the policy covered all of her room and board and care. She didn't have to use her pensions or SS or any of her rental income. She was cash flow positive about $5,000+ every month. We invested that in dividend-paying stocks.
Since she didn't have to sell her investments to pay for her care, the money we did invest grew.... substantially.
The one rental property which she didn't sell gained more than $100,000 in value in the last six months before her death.
And, since we didn't have to sell it before she died we saved a boat load on capital gains on that property.
We invested dividend-paying stocks because, if she exhausted the policy's benefits, we wanted to make sure that her pensions, her SS income, and the dividend income would be enough to cover the full cost of her care, regardless of how long she might live. If we'd had to liquidate her assets from the start, we would not have been able to do that. We would have had to do Medicaid planning and that was something we did NOT want to do. The Medicaid facilities in our area are HORRIBLE compared to the private-pay facilities.
When she passed away we sold the stocks and did not have to pay any capital gains tax because of the step-up in cost basis. Most of the stocks, not all, but most had a substantial gain.

crickets.....
We have found that even private pay nursing homes are horrible in our area. Staffing shortages mean no help when needed. Bad food. Assisted Living, there are good options until they can’t meet your care needs.
Assisted living facilities are also subject to staff shortages. Much of their staff is drawn from the same pool of potential workers as nursing homes.
But people in nursing homes generally need much more assistance, so the shortage is more impactful.
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