Long Term Care Insurance

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FBN2014
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Re: Long Term Care Insurance

Post by FBN2014 »

hudson wrote: Thu Mar 18, 2021 5:41 am
FBN2014 wrote: Wed Mar 10, 2021 11:47 pm I'm in North Carolina. I don't like the idea that premiums can increase with traditional LTCi. With the hybrid my money is refunded if I never use it. I am looking at the hybrids and like the SecureCare. There will be a pot of money of 650K for each of us for 6 years at age 85, benefits grow 5% compounded.
I found long term care info on this state of NC website: https://www.ncdoi.gov/consumers/medicar ... nformation
You have probably already gone there?
It has a list of insurance companies that do business in NC.

It links to a nationwide brochure on long term care: https://www.ncdoi.gov/media/1362/download
We funded this policy last week. I had been wavering for several years whether LTCi was cost effective or to just take our chances that we could self fund. But then my SIL's father got ALS at age 60 and needed around the clock care as the disease progressed. His mother also had MS and was in assisted living for 4 years before she died. The father burned through $20,000/month, mother about $4500/month in assisted living. No one needs LTCi because no one thinks it can happen to them until it does.
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willthrill81
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Re: Long Term Care Insurance

Post by willthrill81 »

FBN2014 wrote: Thu Mar 18, 2021 10:05 amI had been wavering for several years whether LTCi was cost effective or to just take our chances that we could self fund. But then my SIL's father got ALS at age 60 and needed around the clock care as the disease progressed. His mother also had MS and was in assisted living for 4 years before she died. The father burned through $20,000/month, mother about $4500/month in assisted living. No one needs LTCi because no one thinks it can happen to them until it does.
Out of curiosity, why was the cost so high? In our area, a private room in a nursing home, the most costly level of LTC, is about $100k a year, yet $20k/month is more than double that. Was it in a HCOL area?

The expenses his mother incurred in assisted living (i.e., $54k annually) are much more in line with the data I've seen and are much more easily paid for by many here since virtually all other expenses related to the afflicted individual would cease.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
FBN2014
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Re: Long Term Care Insurance

Post by FBN2014 »

willthrill81 wrote: Thu Mar 18, 2021 10:16 am
FBN2014 wrote: Thu Mar 18, 2021 10:05 amI had been wavering for several years whether LTCi was cost effective or to just take our chances that we could self fund. But then my SIL's father got ALS at age 60 and needed around the clock care as the disease progressed. His mother also had MS and was in assisted living for 4 years before she died. The father burned through $20,000/month, mother about $4500/month in assisted living. No one needs LTCi because no one thinks it can happen to them until it does.
Out of curiosity, why was the cost so high? In our area, a private room in a nursing home, the most costly level of LTC, is about $100k a year, yet $20k/month is more than double that. Was it in a HCOL area?

The expenses his mother incurred in assisted living (i.e., $54k annually) are much more in line with the data I've seen and are much more easily paid for by many here since virtually all other expenses related to the afflicted individual would cease.
He wanted at home care. A registered nurse was needed. ALS is probably the worst disease you can have that requires LTC. You are basically totally paralyzed and can't talk as it progresses.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain
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willthrill81
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Re: Long Term Care Insurance

Post by willthrill81 »

FBN2014 wrote: Thu Mar 18, 2021 10:22 am
willthrill81 wrote: Thu Mar 18, 2021 10:16 am
FBN2014 wrote: Thu Mar 18, 2021 10:05 amI had been wavering for several years whether LTCi was cost effective or to just take our chances that we could self fund. But then my SIL's father got ALS at age 60 and needed around the clock care as the disease progressed. His mother also had MS and was in assisted living for 4 years before she died. The father burned through $20,000/month, mother about $4500/month in assisted living. No one needs LTCi because no one thinks it can happen to them until it does.
Out of curiosity, why was the cost so high? In our area, a private room in a nursing home, the most costly level of LTC, is about $100k a year, yet $20k/month is more than double that. Was it in a HCOL area?

The expenses his mother incurred in assisted living (i.e., $54k annually) are much more in line with the data I've seen and are much more easily paid for by many here since virtually all other expenses related to the afflicted individual would cease.
He wanted at home care. A registered nurse was needed. ALS is probably the worst disease you can have that requires LTC. You are basically totally paralyzed and can't talk as it progresses.
Thanks for the info. That explains the high cost.

ALS is indeed a horrible affliction.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
FBN2014
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Re: Long Term Care Insurance

Post by FBN2014 »

"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain
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willthrill81
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Re: Long Term Care Insurance

Post by willthrill81 »

Michael Kitces had a more detailed post awhile back on his site reviewing hybrid LTC policies. Below is an excerpt.
The bottom line is that in today’s marketplace, there are some opportunities to effectively use hybrid life/LTC and annuity/LTC policies, but the evaluation is more complex and nuanced than to simply focus on the guaranteed LTC costs, guaranteed liquidity of the policy, and potential to get a death benefit (at least for life/LTC policies). While those features may be appealing, as long as the insurance company gets to control the money, and the rate of return it pays, the guarantee on costs alone is meaningless, and clients must be cognizant than in a rising interest rate environment they may finish with far less money than simply buying traditional LTC insurance and investing the rest.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
FBN2014
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Re: Long Term Care Insurance

Post by FBN2014 »

willthrill81 wrote: Thu Mar 18, 2021 10:47 am
Michael Kitces had a more detailed post awhile back on his site reviewing hybrid LTC policies. Below is an excerpt.
The bottom line is that in today’s marketplace, there are some opportunities to effectively use hybrid life/LTC and annuity/LTC policies, but the evaluation is more complex and nuanced than to simply focus on the guaranteed LTC costs, guaranteed liquidity of the policy, and potential to get a death benefit (at least for life/LTC policies). While those features may be appealing, as long as the insurance company gets to control the money, and the rate of return it pays, the guarantee on costs alone is meaningless, and clients must be cognizant than in a rising interest rate environment they may finish with far less money than simply buying traditional LTC insurance and investing the rest.
Kitces is excellent but the article you cited is 8 years old. Hybrid plans have changed quite a bit since then with new products available.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain
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JoeRetire
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Re: Long Term Care Insurance

Post by JoeRetire »

FBN2014 wrote: Thu Mar 18, 2021 10:05 amBut then my SIL's father got ALS at age 60 and needed around the clock care as the disease progressed.
So sorry to hear that.

My uncle got ALS at a young age. He passed away before reaching 55. Awful disease.
Just remember: it's not a lie if you believe it.
Rex66
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Re: Long Term Care Insurance

Post by Rex66 »

FBN2014 wrote: Fri Mar 19, 2021 8:10 am
willthrill81 wrote: Thu Mar 18, 2021 10:47 am
Michael Kitces had a more detailed post awhile back on his site reviewing hybrid LTC policies. Below is an excerpt.
The bottom line is that in today’s marketplace, there are some opportunities to effectively use hybrid life/LTC and annuity/LTC policies, but the evaluation is more complex and nuanced than to simply focus on the guaranteed LTC costs, guaranteed liquidity of the policy, and potential to get a death benefit (at least for life/LTC policies). While those features may be appealing, as long as the insurance company gets to control the money, and the rate of return it pays, the guarantee on costs alone is meaningless, and clients must be cognizant than in a rising interest rate environment they may finish with far less money than simply buying traditional LTC insurance and investing the rest.
Kitces is excellent but the article you cited is 8 years old. Hybrid plans have changed quite a bit since then with new products available.
Not really
They are still 98% the same
Changes made don’t necessarily benefit the client
shoppingchicken
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Re: Long Term Care Insurance

Post by shoppingchicken »

There is an emotional side to this LTC issue. My 84 yr old father who needs round the clock care refuses to go into any long term care facility. Says he will financially cut off my mother who is 80 if she ever puts him in a home. She slaves over him and has to take care of him when she's not healthy herself. On top, he has too much pride to let anyone inside the home. He has the audacity to say " Your mother can take care of me. Why should I pay a stranger?". Money is not the problem here. No amount of LTCi would have made any difference. At this rate, we're afraid my mother will pass before him and he will end up in a senior home anyway. That will involve going to court to gain guardianship etc etc because he won't go on his own. Extremely frustrating.
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Re: Long Term Care Insurance

Post by TN_Boy »

shoppingchicken wrote: Fri Mar 19, 2021 1:12 pm There is an emotional side to this LTC issue. My 84 yr old father who needs round the clock care refuses to go into any long term care facility. Says he will financially cut off my mother who is 80 if she ever puts him in a home. She slaves over him and has to take care of him when she's not healthy herself. On top, he has too much pride to let anyone inside the home. He has the audacity to say " Your mother can take care of me. Why should I pay a stranger?". Money is not the problem here. No amount of LTCi would have made any difference. At this rate, we're afraid my mother will pass before him and he will end up in a senior home anyway. That will involve going to court to gain guardianship etc etc because he won't go on his own. Extremely frustrating.
Probably a combination of stubbornness and/or dementia. A person that is all there would certainly not want their spouse to ruin their health.

I guess the kids can decide whether or not to protect mom from burning out .... a difficult situation, especially if the kids are remote.
shoppingchicken
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Re: Long Term Care Insurance

Post by shoppingchicken »

No Alzheimer or dementia here. Just a life long practice of being an a-hole and a narcissist. We(the kids) are not anywhere near them to lessen the burden for our mom. :annoyed We get into argument over this issue every time we get together in person or on the phone. Just wanted to point out that preparing for old age may involve more than just having money squirred away or LTCis. Thanks for listening.
TravelforFun
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Re: Long Term Care Insurance

Post by TravelforFun »

shoppingchicken wrote: Fri Mar 19, 2021 1:12 pm There is an emotional side to this LTC issue. My 84 yr old father who needs round the clock care refuses to go into any long term care facility. Says he will financially cut off my mother who is 80 if she ever puts him in a home. She slaves over him and has to take care of him when she's not healthy herself. On top, he has too much pride to let anyone inside the home. He has the audacity to say " Your mother can take care of me. Why should I pay a stranger?". Money is not the problem here. No amount of LTCi would have made any difference. At this rate, we're afraid my mother will pass before him and he will end up in a senior home anyway. That will involve going to court to gain guardianship etc etc because he won't go on his own. Extremely frustrating.
If he had LTC insurance, he probably would claim it by hiring help or even going into a nice nursing home. Why not, right?

I know a couple who maintained they would self insure and when the time came, didn't want to spend the money and one spouse has been slaving over the other. They have the money but don't want to spend it.

TravelforFun
TN_Boy
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Re: Long Term Care Insurance

Post by TN_Boy »

shoppingchicken wrote: Fri Mar 19, 2021 6:25 pm No Alzheimer or dementia here. Just a life long practice of being an a-hole and a narcissist. We(the kids) are not anywhere near them to lessen the burden for our mom. :annoyed We get into argument over this issue every time we get together in person or on the phone. Just wanted to point out that preparing for old age may involve more than just having money squirred away or LTCis. Thanks for listening.
The other problem that can happen is the caregiver refusing help .... I don't mean necessarily moving someone to a facility. Just refusing to allow other help (e.g. caretakers in 8 hours a day, even when it is affordable). This is unfortunate, as the caregiver wears out faster and may actually mean a move to a facility happens sooner.

Good luck.
TN_Boy
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Re: Long Term Care Insurance

Post by TN_Boy »

TravelforFun wrote: Fri Mar 19, 2021 9:10 pm
shoppingchicken wrote: Fri Mar 19, 2021 1:12 pm There is an emotional side to this LTC issue. My 84 yr old father who needs round the clock care refuses to go into any long term care facility. Says he will financially cut off my mother who is 80 if she ever puts him in a home. She slaves over him and has to take care of him when she's not healthy herself. On top, he has too much pride to let anyone inside the home. He has the audacity to say " Your mother can take care of me. Why should I pay a stranger?". Money is not the problem here. No amount of LTCi would have made any difference. At this rate, we're afraid my mother will pass before him and he will end up in a senior home anyway. That will involve going to court to gain guardianship etc etc because he won't go on his own. Extremely frustrating.
If he had LTC insurance, he probably would claim it by hiring help or even going into a nice nursing home. Why not, right?

I know a couple who maintained they would self insure and when the time came, didn't want to spend the money and one spouse has been slaving over the other. They have the money but don't want to spend it.

TravelforFun
Hard to imagine someone with the father's mindset ever putting money into an LTCi policy!
shoppingchicken
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Re: Long Term Care Insurance

Post by shoppingchicken »

TN_Boy wrote: Fri Mar 19, 2021 9:25 pm
shoppingchicken wrote: Fri Mar 19, 2021 6:25 pm No Alzheimer or dementia here. Just a life long practice of being an a-hole and a narcissist. We(the kids) are not anywhere near them to lessen the burden for our mom. :annoyed We get into argument over this issue every time we get together in person or on the phone. Just wanted to point out that preparing for old age may involve more than just having money squirred away or LTCis. Thanks for listening.
The other problem that can happen is the caregiver refusing help .... I don't mean necessarily moving someone to a facility. Just refusing to allow other help (e.g. caretakers in 8 hours a day, even when it is affordable). This is unfortunate, as the caregiver wears out faster and may actually mean a move to a facility happens sooner.

Good luck.
We point this out to both of them all the time; that mom can become ill and pass away before dad but he doesn't listen. She's also the product of her time. She thinks if she sacrifices herself, the family will keep its peace and tread calm water. My apologies. I feel like I've hijacked the topic. Just wanted BHs to be aware and have frank realistic discussion with family when planning your silver years.
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Re: Long Term Care Insurance

Post by dcabler »

We each bought NYL LTCI policies about 10 years ago when we were 50-ish. One small-ish rate increase just a few years into it (NYL's first ever), then just notified within the last two weeks of an 80% increase. Man, I wish that was a typo.

Some background: DW's Mom, DW's Mom's twin sister, DW's Mom's brother, and DW's Mom's Aunt were all diagnosed with alzheimers. DW's Mom spent an extraordinarily long time in an alzheimer's unit followed by standard nursing home before passing. DW's Dad had purchased LTCI for both of them but cancelled it just a couple of year's before DW's Mom was diagnosed. So PITA to deal with medicaid, lookbacks, and all of the other stuff that entailed. That was the trigger we needed to start the process of shopping for LTCI.

Well, we're 10 years older, and we have significantly more in savings now. So with the notification of the rate increase, we spent quite a bit of time having our agent re-run various scenarios for the two of us while looking at various self-funding ideas. In the end, we reduced both of our benefits with the big knobs being reducing mine more than hers (not much family history of needing LTC care here) and pushing out the wait period for both of us. Net result was "only" about a 24% increase in total. No fantastic options, but the idea now is to think of this more in terms of classic insurance - insure for something we hope is unlikely but won't break the bank should it be needed or along the way as we pay premiums. If there's one bright spot, it's that included in the rate increase is now a guarantee to never raise rates again on these policies. So, barring NYL bankruptcy here's to hoping that this becomes an increasingly small portion of our spending over time due to inflation.

Cheers.
FBN2014
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Re: Long Term Care Insurance

Post by FBN2014 »

dcabler wrote: Sat Mar 20, 2021 5:53 am We each bought NYL LTCI policies about 10 years ago when we were 50-ish. One small-ish rate increase just a few years into it (NYL's first ever), then just notified within the last two weeks of an 80% increase. Man, I wish that was a typo.
This is why I bought the hybrid SecureCare policy. No rate increases, guaranteed benefits known from day one, no need to reduce benefits after a rate increase. Let's me sleep well at night knowing I have taken the long term care risk off the table.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain
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JoeRetire
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Re: Long Term Care Insurance

Post by JoeRetire »

shoppingchicken wrote: Fri Mar 19, 2021 1:12 pm There is an emotional side to this LTC issue. My 84 yr old father who needs round the clock care refuses to go into any long term care facility. Says he will financially cut off my mother who is 80 if she ever puts him in a home.
Depending on the state they live in, that may well be an idle threat.
And depending on his mental state, he may not have the capacity to make such changes anyway.

It might make sense for mom and the children to discuss the situation and decide what (if anything) to do. It's pretty hard for spouses to provide "round the clock" care by themselves.
Just remember: it's not a lie if you believe it.
rick51
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Re: Long Term Care Insurance

Post by rick51 »

WoW2012 wrote: Tue Mar 16, 2021 3:08 pm One thing we've learned from this thread: If you're in your 70's you probably can't find a good deal on long-term care insurance, especially if you live in Florida (because the rates are higher in FL than they are in other states).
[ quote fixed by admin LadyGeek]

So I have read most of this thread but not all of it and was not clear on whether there was an age at which point one would no longer consider such coverage. So if you are 70 and you are healthy and you have a family history that’s extremely healthy would it be too late to be considering a modern long-term health care policy?
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willthrill81
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Re: Long Term Care Insurance

Post by willthrill81 »

rick51 wrote: Tue May 04, 2021 8:37 pm
WoW2012 wrote: Tue Mar 16, 2021 3:08 pm One thing we've learned from this thread: If you're in your 70's you probably can't find a good deal on long-term care insurance, especially if you live in Florida (because the rates are higher in FL than they are in other states).
[ quote fixed by admin LadyGeek]

So I have read most of this thread but not all of it and was not clear on whether there was an age at which point one would no longer consider such coverage. So if you are 70 and you are healthy and you have a family history that’s extremely healthy would it be too late to be considering a modern long-term health care policy?
You might be able to get coverage, but I think that it will be difficult. At 70, you're approaching the age at which the likelihood of you filing a LTCi claim goes way up; that likelihood is close to zero before age 60 and still very low until about age 70. Even if you can get a policy, the premiums will be high.

However, the downside risk of LTC is actually quite lower for a 70 year old than for a 60 year old, for instance. The real risk isn't that you need LTC, even an expensive form of it like a nursing home, for a year or two (or three); it's that you need very intensive LTC for 5-10 years. But most of those who are 70+ and need LTC need it for under three years, and very few need it for more than five years. As such, you might be at a point where you're likely to need some LTC but very unlikely to need a lot of LTC for a long time. And if that's true, you may be a prime candidate for self-insuring.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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Re: Long Term Care Insurance

Post by MikeG62 »

shoppingchicken wrote: Fri Mar 19, 2021 1:12 pm There is an emotional side to this LTC issue. My 84 yr old father who needs round the clock care refuses to go into any long term care facility. Says he will financially cut off my mother who is 80 if she ever puts him in a home. She slaves over him and has to take care of him when she's not healthy herself. On top, he has too much pride to let anyone inside the home. He has the audacity to say " Your mother can take care of me. Why should I pay a stranger?". Money is not the problem here. No amount of LTCi would have made any difference. At this rate, we're afraid my mother will pass before him and he will end up in a senior home anyway. That will involve going to court to gain guardianship etc etc because he won't go on his own. Extremely frustrating.
Sounds exactly like my father's approach. I feel your pain. There is no amount of talking sense or having a reasonable discussion with someone like this. I know this from decades of first hand experience.
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Mr.BB
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Re: Long Term Care Insurance

Post by Mr.BB »

willthrill81 wrote: Tue May 04, 2021 9:28 pm
rick51 wrote: Tue May 04, 2021 8:37 pm
WoW2012 wrote: Tue Mar 16, 2021 3:08 pm One thing we've learned from this thread: If you're in your 70's you probably can't find a good deal on long-term care insurance, especially if you live in Florida (because the rates are higher in FL than they are in other states).
[ quote fixed by admin LadyGeek]

So I have read most of this thread but not all of it and was not clear on whether there was an age at which point one would no longer consider such coverage. So if you are 70 and you are healthy and you have a family history that’s extremely healthy would it be too late to be considering a modern long-term health care policy?
You might be able to get coverage, but I think that it will be difficult. At 70, you're approaching the age at which the likelihood of you filing a LTCi claim goes way up; that likelihood is close to zero before age 60 and still very low until about age 70. Even if you can get a policy, the premiums will be high.

However, the downside risk of LTC is actually quite lower for a 70 year old than for a 60 year old, for instance. The real risk isn't that you need LTC, even an expensive form of it like a nursing home, for a year or two (or three); it's that you need very intensive LTC for 5-10 years. But most of those who are 70+ and need LTC need it for under three years, and very few need it for more than five years. As such, you might be at a point where you're likely to need some LTC but very unlikely to need a lot of LTC for a long time. And if that's true, you may be a prime candidate for self-insuring.
That's how I look at it. I run our numbers through the Maxifi program to make sure we can handle those numbers. I figure two separate 3 year runs in LTC facility. If you can handle spending $250,000 as an expense form age 60- 75 or $500,000 after age 80 you probably don't need LTC insurance
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Iorek
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Re: Long Term Care Insurance

Post by Iorek »

willthrill81 wrote: Thu Mar 18, 2021 10:47 am
Michael Kitces had a more detailed post awhile back on his site reviewing hybrid LTC policies. Below is an excerpt.
The bottom line is that in today’s marketplace, there are some opportunities to effectively use hybrid life/LTC and annuity/LTC policies, but the evaluation is more complex and nuanced than to simply focus on the guaranteed LTC costs, guaranteed liquidity of the policy, and potential to get a death benefit (at least for life/LTC policies). While those features may be appealing, as long as the insurance company gets to control the money, and the rate of return it pays, the guarantee on costs alone is meaningless, and clients must be cognizant than in a rising interest rate environment they may finish with far less money than simply buying traditional LTC insurance and investing the rest.
Thanks to both of you for posting these. It’s interesting to me that the first article says that at 5% return it would take 28 years to accumulate the level of long term care insurance available under the hybrid policy, since it seems that many people might hold these policies for 28 years (leaving aside rate of return questions and whether that would be “enough” LTCi coverage).

That seems consistent with Kitces’ article suggesting that often people will be better off buying LTCi and investing the rest.
FBN2014
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Re: Long Term Care Insurance

Post by FBN2014 »

Iorek wrote: Sat May 08, 2021 9:08 am
willthrill81 wrote: Thu Mar 18, 2021 10:47 am
Michael Kitces had a more detailed post awhile back on his site reviewing hybrid LTC policies. Below is an excerpt.
The bottom line is that in today’s marketplace, there are some opportunities to effectively use hybrid life/LTC and annuity/LTC policies, but the evaluation is more complex and nuanced than to simply focus on the guaranteed LTC costs, guaranteed liquidity of the policy, and potential to get a death benefit (at least for life/LTC policies). While those features may be appealing, as long as the insurance company gets to control the money, and the rate of return it pays, the guarantee on costs alone is meaningless, and clients must be cognizant than in a rising interest rate environment they may finish with far less money than simply buying traditional LTC insurance and investing the rest.
Thanks to both of you for posting these. It’s interesting to me that the first article says that at 5% return it would take 28 years to accumulate the level of long term care insurance available under the hybrid policy, since it seems that many people might hold these policies for 28 years (leaving aside rate of return questions and whether that would be “enough” LTCi coverage).

That seems consistent with Kitces’ article suggesting that often people will be better off buying LTCi and investing the rest.
I recently purchased a long term care hybrid policy. I am 68. I deposited $88,000 with the insurance company. I have an immediate $350,000 long term benefit and at age 85 when I would most likely need care the benefit is about $670,000. I can draw on the benefits for upto 6 years. If I never use it then my heirs get the $88,000 back. I can also change my mind after 5 years and cancel the policy and get back the initial premium. This is with an A+ rated company. Seems like a good deal to me.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain
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willthrill81
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Re: Long Term Care Insurance

Post by willthrill81 »

FBN2014 wrote: Sat May 08, 2021 10:05 am I recently purchased a long term care hybrid policy. I am 68. I deposited $88,000 with the insurance company. I have an immediate $350,000 long term benefit and at age 85 when I would most likely need care the benefit is about $670,000. I can draw on the benefits for upto 6 years. If I never use it then my heirs get the $88,000 back. I can also change my mind after 5 years and cancel the policy and get back the initial premium. This is with an A+ rated company. Seems like a good deal to me.
If you used $50k of benefits, would your heirs get $38k back?
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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Windylotus
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Re: Long Term Care Insurance

Post by Windylotus »

Reading through some of this thread, it seems mid fifties is the optimal age to start a LTC policy?

I'm 47, DW 45. We have $32k built up in our all equity HSA. We are 15-20 years away from retirement. I'm trying to gauge if/when to get LTC insurance while continue to max out our HSA every year that will go towards healthcare costs as we age. I'm using the $300k metric recently released by Fidelity to get an idea what we will need in today's dollars.

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willthrill81
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Re: Long Term Care Insurance

Post by willthrill81 »

Windylotus wrote: Sat May 08, 2021 10:42 am Reading through some of this thread, it seems mid fifties is the optimal age to start a LTC policy?
It depends on what you're trying to optimize.

If you buy a LTCi policy in your mid 50s, there is an extremely high likelihood that you will be paying premiums for at least 10 and probably closer to 20 years and paying tens of thousands of dollars in premiums before there is any meaningful chance of you filing a claim. However, doing so allows you 'lock in' your premiums, subject to increases approved by your state's insurance commissioner, and get a policy while you are still healthy enough to do so.

Many, not necessarily you, have grown so accustomed to insuring large potential risks that they believe that they must have LTC insurance. In truth, many BHs can quite easily self-insure the risk and would likely be financially better off doing so.
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Re: Long Term Care Insurance

Post by FBN2014 »

willthrill81 wrote: Sat May 08, 2021 10:11 am
FBN2014 wrote: Sat May 08, 2021 10:05 am I recently purchased a long term care hybrid policy. I am 68. I deposited $88,000 with the insurance company. I have an immediate $350,000 long term benefit and at age 85 when I would most likely need care the benefit is about $670,000. I can draw on the benefits for upto 6 years. If I never use it then my heirs get the $88,000 back. I can also change my mind after 5 years and cancel the policy and get back the initial premium. This is with an A+ rated company. Seems like a good deal to me.
If you used $50k of benefits, would your heirs get $38k back?
Correct, any unused money from the original premium is refunded to the beneficiaries.
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Re: Long Term Care Insurance

Post by MikeG62 »

FBN2014 wrote: Tue May 11, 2021 5:24 am
willthrill81 wrote: Sat May 08, 2021 10:11 am
FBN2014 wrote: Sat May 08, 2021 10:05 am I recently purchased a long term care hybrid policy. I am 68. I deposited $88,000 with the insurance company. I have an immediate $350,000 long term benefit and at age 85 when I would most likely need care the benefit is about $670,000. I can draw on the benefits for upto 6 years. If I never use it then my heirs get the $88,000 back. I can also change my mind after 5 years and cancel the policy and get back the initial premium. This is with an A+ rated company. Seems like a good deal to me.
If you used $50k of benefits, would your heirs get $38k back?
Correct, any unused money from the original premium is refunded to the beneficiaries.
That is an interesting product.

Of course if you never use the benefit (or don't use the full $88K), what you get back is in nominal (and not real) dollars. That haircut could be worth the fairly substantial benefit in the event you actually need and use it though.
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Re: Long Term Care Insurance

Post by willthrill81 »

MikeG62 wrote: Tue May 11, 2021 8:28 am
FBN2014 wrote: Tue May 11, 2021 5:24 am
willthrill81 wrote: Sat May 08, 2021 10:11 am
FBN2014 wrote: Sat May 08, 2021 10:05 am I recently purchased a long term care hybrid policy. I am 68. I deposited $88,000 with the insurance company. I have an immediate $350,000 long term benefit and at age 85 when I would most likely need care the benefit is about $670,000. I can draw on the benefits for upto 6 years. If I never use it then my heirs get the $88,000 back. I can also change my mind after 5 years and cancel the policy and get back the initial premium. This is with an A+ rated company. Seems like a good deal to me.
If you used $50k of benefits, would your heirs get $38k back?
Correct, any unused money from the original premium is refunded to the beneficiaries.
That is an interesting product.

Of course if you never use the benefit (or don't use the full $88K), what you get back is in nominal (and not real) dollars. That haircut could be worth the fairly substantial benefit in the event you actually need and use it though.
I agree that it's interesting. The policy provides about 4 to 1 leverage in the immediate benefit. However, the roughly 8 to 1 leverage at age 85 isn't very beneficial since exceptionally few 85 year olds will need intensive (i.e., expensive) LTC long enough to warrant the additional $320k of coverage. And you're right that being refunded nominal dollars could be a big haircut. Further, most BHs could self-insure the covered amounts. So, like many (most?) LTC policies, this is more about insuring what you bequeath than anything else.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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Re: Long Term Care Insurance

Post by MikeG62 »

willthrill81 wrote: Tue May 11, 2021 9:40 am
MikeG62 wrote: Tue May 11, 2021 8:28 am
FBN2014 wrote: Tue May 11, 2021 5:24 am
willthrill81 wrote: Sat May 08, 2021 10:11 am
FBN2014 wrote: Sat May 08, 2021 10:05 am I recently purchased a long term care hybrid policy. I am 68. I deposited $88,000 with the insurance company. I have an immediate $350,000 long term benefit and at age 85 when I would most likely need care the benefit is about $670,000. I can draw on the benefits for upto 6 years. If I never use it then my heirs get the $88,000 back. I can also change my mind after 5 years and cancel the policy and get back the initial premium. This is with an A+ rated company. Seems like a good deal to me.
If you used $50k of benefits, would your heirs get $38k back?
Correct, any unused money from the original premium is refunded to the beneficiaries.
That is an interesting product.

Of course if you never use the benefit (or don't use the full $88K), what you get back is in nominal (and not real) dollars. That haircut could be worth the fairly substantial benefit in the event you actually need and use it though.
I agree that it's interesting. The policy provides about 4 to 1 leverage in the immediate benefit. However, the roughly 8 to 1 leverage at age 85 isn't very beneficial since exceptionally few 85 year olds will need intensive (i.e., expensive) LTC long enough to warrant the additional $320k of coverage. And you're right that being refunded nominal dollars could be a big haircut. Further, most BHs could self-insure the covered amounts. So, like many (most?) LTC policies, this is more about insuring what you bequeath than anything else.
If I am thinking about it right, the cost of this LTC insurance is the investment return one is forgoing on the $88,000 "placed on deposit" with the insurer. Assuming a 4% return, that translates to ~$3,500 in the first year (or $300 per month) - a bit less once one figures in the tax impact on that return. That does not sound unreasonable.

Also, query whether the additional $320K in maximum benefit at age 85 (17 years from now) is not necessarily associated with a longer stay in a LTC facility (as compared to the $355K in benefit at age 67), but may simply be the amount needed to cover the increase in LTC costs over the 17 year period for a LTC stay of the same length (an annual increase of of ~4% if I've done the math right). This assumes that I am understanding the coverage correctly and the $670K in 2038 is in 2038 dollars and not today's dollars.
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Re: Long Term Care Insurance

Post by willthrill81 »

MikeG62 wrote: Wed May 12, 2021 6:09 am
willthrill81 wrote: Tue May 11, 2021 9:40 am
MikeG62 wrote: Tue May 11, 2021 8:28 am
FBN2014 wrote: Tue May 11, 2021 5:24 am
willthrill81 wrote: Sat May 08, 2021 10:11 am

If you used $50k of benefits, would your heirs get $38k back?
Correct, any unused money from the original premium is refunded to the beneficiaries.
That is an interesting product.

Of course if you never use the benefit (or don't use the full $88K), what you get back is in nominal (and not real) dollars. That haircut could be worth the fairly substantial benefit in the event you actually need and use it though.
I agree that it's interesting. The policy provides about 4 to 1 leverage in the immediate benefit. However, the roughly 8 to 1 leverage at age 85 isn't very beneficial since exceptionally few 85 year olds will need intensive (i.e., expensive) LTC long enough to warrant the additional $320k of coverage. And you're right that being refunded nominal dollars could be a big haircut. Further, most BHs could self-insure the covered amounts. So, like many (most?) LTC policies, this is more about insuring what you bequeath than anything else.
If I am thinking about it right, the cost of this LTC insurance is the investment return one is forgoing on the $88,000 "placed on deposit" with the insurer. Assuming a 4% return, that translates to ~$3,500 in the first year (or $300 per month) - a bit less once one figures in the tax impact on that return. That does not sound unreasonable.

Also, query whether the additional $320K in maximum benefit at age 85 (17 years from now) is not necessarily associated with a longer stay in a LTC facility (as compared to the $355K in benefit at age 67), but may simply be the amount needed to cover the increase in LTC costs over the 17 year period for a LTC stay of the same length (an annual increase of of ~4% if I've done the math right). This assumes that I am understanding the coverage correctly and the $670K in 2038 is in 2038 dollars and not today's dollars.
Yes, this type of policy doesn't sound unreasonable to me either.

However, I suspect that it may be a hybrid policy, and my potentially flawed understanding is that most hybrid policies do not increase benefits for inflation. So the $320k/$670k benefit might be effectively half those amounts in 20-25 years.
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Re: Long Term Care Insurance

Post by nigel_ht »

MikeG62 wrote: Wed May 05, 2021 7:59 am
shoppingchicken wrote: Fri Mar 19, 2021 1:12 pm There is an emotional side to this LTC issue. My 84 yr old father who needs round the clock care refuses to go into any long term care facility. Says he will financially cut off my mother who is 80 if she ever puts him in a home. She slaves over him and has to take care of him when she's not healthy herself. On top, he has too much pride to let anyone inside the home. He has the audacity to say " Your mother can take care of me. Why should I pay a stranger?". Money is not the problem here. No amount of LTCi would have made any difference. At this rate, we're afraid my mother will pass before him and he will end up in a senior home anyway. That will involve going to court to gain guardianship etc etc because he won't go on his own. Extremely frustrating.
Sounds exactly like my father's approach. I feel your pain. There is no amount of talking sense or having a reasonable discussion with someone like this. I know this from decades of first hand experience.
I find that inconceivable…heck, I’m planning Medicaid divorce if I am mentally sound enough to execute it if it comes to that and self insuring turns out to be a bad choice. At least half our assets will be saved for her.

As long as a kid or my ex comes to check that I’m not getting horribly abused by staff (and pay for companion sitter) I’m reasonably good with that. That’s the fear really…a place that looks nice but has hidden horrors of neglect or abuse.
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Re: Long Term Care Insurance

Post by smitcat »

nigel_ht wrote: Sat Jun 05, 2021 8:26 am
MikeG62 wrote: Wed May 05, 2021 7:59 am
shoppingchicken wrote: Fri Mar 19, 2021 1:12 pm There is an emotional side to this LTC issue. My 84 yr old father who needs round the clock care refuses to go into any long term care facility. Says he will financially cut off my mother who is 80 if she ever puts him in a home. She slaves over him and has to take care of him when she's not healthy herself. On top, he has too much pride to let anyone inside the home. He has the audacity to say " Your mother can take care of me. Why should I pay a stranger?". Money is not the problem here. No amount of LTCi would have made any difference. At this rate, we're afraid my mother will pass before him and he will end up in a senior home anyway. That will involve going to court to gain guardianship etc etc because he won't go on his own. Extremely frustrating.
Sounds exactly like my father's approach. I feel your pain. There is no amount of talking sense or having a reasonable discussion with someone like this. I know this from decades of first hand experience.
I find that inconceivable…heck, I’m planning Medicaid divorce if I am mentally sound enough to execute it if it comes to that and self insuring turns out to be a bad choice. At least half our assets will be saved for her.

As long as a kid or my ex comes to check that I’m not getting horribly abused by staff (and pay for companion sitter) I’m reasonably good with that. That’s the fear really…a place that looks nice but has hidden horrors of neglect or abuse.
"He has the audacity to say " Your mother can take care of me. Why should I pay a stranger?"."
Of course if it was already paid for via insurance the argument would be. .."why not use the insurance for what it was intended, this is already paid for?"
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Re: Long Term Care Insurance

Post by TomatoTomahto »

willthrill81 wrote: Wed May 12, 2021 9:53 am However, I suspect that it may be a hybrid policy, and my potentially flawed understanding is that most hybrid policies do not increase benefits for inflation. So the $320k/$670k benefit might be effectively half those amounts in 20-25 years.
Your view is more sanguine than mine. I have other reasons for not buying a LTCi policy, but it’s the refusal/inability to sell CPI type inflation adjustments that seals the deal on LTCi and SPIAs. It doesn’t take a long period of high inflation to make $320k peanuts; I’ll take my chances that equities perform close enough.
I get the FI part but not the RE part of FIRE.
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Re: Long Term Care Insurance

Post by TomatoTomahto »

smitcat wrote: Sat Jun 05, 2021 8:51 am "He has the audacity to say " Your mother can take care of me. Why should I pay a stranger?"."
Of course if it was already paid for via insurance the argument would be. .."why not use the insurance for what it was intended, this is already paid for?"
As TN_Boy suggested, the person who would make those statements is not someone who would sign up for LTCi. Narcissism is extraordinary.
I get the FI part but not the RE part of FIRE.
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Re: Long Term Care Insurance

Post by nigel_ht »

TomatoTomahto wrote: Sat Jun 05, 2021 8:53 am
willthrill81 wrote: Wed May 12, 2021 9:53 am However, I suspect that it may be a hybrid policy, and my potentially flawed understanding is that most hybrid policies do not increase benefits for inflation. So the $320k/$670k benefit might be effectively half those amounts in 20-25 years.
Your view is more sanguine than mine. I have other reasons for not buying a LTCi policy, but it’s the refusal/inability to sell CPI type inflation adjustments that seals the deal on LTCi and SPIAs. It doesn’t take a long period of high inflation to make $320k peanuts; I’ll take my chances that equities perform close enough.
$5K annually for $1.1M for near term black swan events in early retirement might make sense. The odds are low that you need LTC 55-65 is pretty low…probably not worth $50K…but for sure a $1.1M LTC need would put a huge dent in our plans. Extremely low probability but very high impact.

After 30 years of growth (hopefully) needing LTC at 80 would only moderately impact our heirs.
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Re: Long Term Care Insurance

Post by redeem_ct »

I have an aunt who is now collecting on long term care insurance as a result of becoming blind two years ago.

In my opinion, long term care insurance is overrated. Here are the reasons:
1. It costs a LOT of money. While my aunt was still paying for it, it was costing her around $450 per month. The premiums become more expensive over time. If my aunt were still paying for it, it would now cost her around $480 per month.
2. There is a lifetime benefit LIMIT. My aunt's lifetime benefit is limited to around $500k. So even in the "best case scenario" (as far as getting benefits is concerned), it still may not make up for the decades of insurance premiums paid. The insurance company sales pitches talk about how costly long term care is and how much more expensive it could become over time. However, the lifetime cap means that you are NOT covered in the worst case scenarios that the sales pitches talk about (like inflation and needing a high level of care for many, many years).
3. There will be extra work for your next of kin at a time when they already have lots to do. Even though I had no problems with the long term care insurance company, making the claim was still a hassle that required lots of paperwork. While the insurance company is justified in having safeguards to prevent fraud, this is of little consolation to your next of kin who have work to do. Worse yet, it takes work to STOP automatic payments of your insurance premiums. So until your next of kin get around to working on your insurance claim, you will continue to bleed cash away.
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Re: Long Term Care Insurance

Post by Silk McCue »

redeem_ct wrote: Sat Jun 05, 2021 11:26 am I have an aunt who is now collecting on long term care insurance as a result of becoming blind two years ago.

In my opinion, long term care insurance is overrated. Here are the reasons:
1. It costs a LOT of money. While my aunt was still paying for it, it was costing her around $450 per month. The premiums become more expensive over time. If my aunt were still paying for it, it would now cost her around $480 per month.
2. There is a lifetime benefit LIMIT. My aunt's lifetime benefit is limited to around $500k. So even in the "best case scenario" (as far as getting benefits is concerned), it still may not make up for the decades of insurance premiums paid. The insurance company sales pitches talk about how costly long term care is and how much more expensive it could become over time. However, the lifetime cap means that you are NOT covered in the worst case scenarios that the sales pitches talk about (like inflation and needing a high level of care for many, many years).
3. There will be extra work for your next of kin at a time when they already have lots to do. Even though I had no problems with the long term care insurance company, making the claim was still a hassle that required lots of paperwork. While the insurance company is justified in having safeguards to prevent fraud, this is of little consolation to your next of kin who have work to do. Worse yet, it takes work to STOP automatic payments of your insurance premiums. So until your next of kin get around to working on your insurance claim, you will continue to bleed cash away.
Sounds like she made a very wise choice. Good thing you weren’t there to dissuade her.

Cheers
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Re: Long Term Care Insurance

Post by Artful Dodger »

redeem_ct wrote: Sat Jun 05, 2021 11:26 am I have an aunt who is now collecting on long term care insurance as a result of becoming blind two years ago.

In my opinion, long term care insurance is overrated. Here are the reasons:
1. It costs a LOT of money. While my aunt was still paying for it, it was costing her around $450 per month. The premiums become more expensive over time. If my aunt were still paying for it, it would now cost her around $480 per month.
2. There is a lifetime benefit LIMIT. My aunt's lifetime benefit is limited to around $500k. So even in the "best case scenario" (as far as getting benefits is concerned), it still may not make up for the decades of insurance premiums paid. The insurance company sales pitches talk about how costly long term care is and how much more expensive it could become over time. However, the lifetime cap means that you are NOT covered in the worst case scenarios that the sales pitches talk about (like inflation and needing a high level of care for many, many years).
3. There will be extra work for your next of kin at a time when they already have lots to do. Even though I had no problems with the long term care insurance company, making the claim was still a hassle that required lots of paperwork. While the insurance company is justified in having safeguards to prevent fraud, this is of little consolation to your next of kin who have work to do. Worse yet, it takes work to STOP automatic payments of your insurance premiums. So until your next of kin get around to working on your insurance claim, you will continue to bleed cash away.
Does your aunt’s policy not have any inflation protection?
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Re: Long Term Care Insurance

Post by willthrill81 »

TomatoTomahto wrote: Sat Jun 05, 2021 8:53 am
willthrill81 wrote: Wed May 12, 2021 9:53 am However, I suspect that it may be a hybrid policy, and my potentially flawed understanding is that most hybrid policies do not increase benefits for inflation. So the $320k/$670k benefit might be effectively half those amounts in 20-25 years.
Your view is more sanguine than mine. I have other reasons for not buying a LTCi policy, but it’s the refusal/inability to sell CPI type inflation adjustments that seals the deal on LTCi and SPIAs. It doesn’t take a long period of high inflation to make $320k peanuts; I’ll take my chances that equities perform close enough.
I'm surprised that you would think that I'm optimistic about LTCi. WoW2012 seems to think that I'm the biggest LTCi naysayer on the forum.

LTCi policies with an inflation adjustment are widely available, but I don't believe that any of the hybrid policies provide them.

In the right circumstances, I think that a hybrid policy could make some sense, but it seems to very much be a niche product, much like whole life insurance.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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Re: Long Term Care Insurance

Post by TomatoTomahto »

willthrill81 wrote: Sat Jun 05, 2021 1:31 pm I'm surprised that you would think that I'm optimistic about LTCi. WoW2012 seems to think that I'm the biggest LTCi naysayer on the forum.
I wasn’t clear; apologies. I meant that you’re more optimistic about the chances for future inflation than I am, not LTCi.
I get the FI part but not the RE part of FIRE.
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Re: Long Term Care Insurance

Post by JoeRetire »

redeem_ct wrote: Sat Jun 05, 2021 11:26 am 2. There is a lifetime benefit LIMIT. My aunt's lifetime benefit is limited to around $500k. So even in the "best case scenario" (as far as getting benefits is concerned), it still may not make up for the decades of insurance premiums paid.
Tell me how you have calculated that your aunt paid more than $500k in premiums???
Just remember: it's not a lie if you believe it.
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Re: Long Term Care Insurance

Post by beyou »

whunter3333 wrote: Thu Feb 25, 2021 4:36 pm Excellent question and LTC insurance is controversial....I bought it...here is my reasoning....The value of the LTC meant that the insurer was counting on paying out to about only one in three people. So I rationalized that I was one of those three people....One person is dead of an accident before they need it (if it is me, I don't care about the return), One person doesn't need it - they live to a very ripe old age and die peacefully [and healthily?] in their sleep (Again, if it is me, I don't care about the return). And finally, the third person, needs it, uses it and benefits from it (If this is me, I am grateful). So by my calculation, the return I was getting from my premium investment (if I needed it) was about 9% which seems pretty good to me. I think this neglected the cost of regular inflation cutting into the 9% and definitely did not include the medical/health care inflation really cutting into the 9%.
Another scenario. My MIL has paid for many years, really could use assisted living or more, and has refused to do so. The LTI company sent a nurse to qualify her for potential services and approved her, but she only agreed to one day/week in home care. She absolutely needs more care but refuses it. Not sure why she bought the policy. We are still trying to get her to use the policy and get the care she could use and has paid for.
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Re: Long Term Care Insurance

Post by smitcat »

beyou wrote: Sat Jun 05, 2021 8:25 pm
whunter3333 wrote: Thu Feb 25, 2021 4:36 pm Excellent question and LTC insurance is controversial....I bought it...here is my reasoning....The value of the LTC meant that the insurer was counting on paying out to about only one in three people. So I rationalized that I was one of those three people....One person is dead of an accident before they need it (if it is me, I don't care about the return), One person doesn't need it - they live to a very ripe old age and die peacefully [and healthily?] in their sleep (Again, if it is me, I don't care about the return). And finally, the third person, needs it, uses it and benefits from it (If this is me, I am grateful). So by my calculation, the return I was getting from my premium investment (if I needed it) was about 9% which seems pretty good to me. I think this neglected the cost of regular inflation cutting into the 9% and definitely did not include the medical/health care inflation really cutting into the 9%.
Another scenario. My MIL has paid for many years, really could use assisted living or more, and has refused to do so. The LTI company sent a nurse to qualify her for potential services and approved her, but she only agreed to one day/week in home care. She absolutely needs more care but refuses it. Not sure why she bought the policy. We are still trying to get her to use the policy and get the care she could use and has paid for.
"Not sure why she bought the policy."
You can say that about anything bought in life and not really used/appreciated.
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Re: Long Term Care Insurance

Post by JoeRetire »

smitcat wrote: Sun Jun 06, 2021 6:12 am
beyou wrote: Sat Jun 05, 2021 8:25 pm
whunter3333 wrote: Thu Feb 25, 2021 4:36 pm Excellent question and LTC insurance is controversial....I bought it...here is my reasoning....The value of the LTC meant that the insurer was counting on paying out to about only one in three people. So I rationalized that I was one of those three people....One person is dead of an accident before they need it (if it is me, I don't care about the return), One person doesn't need it - they live to a very ripe old age and die peacefully [and healthily?] in their sleep (Again, if it is me, I don't care about the return). And finally, the third person, needs it, uses it and benefits from it (If this is me, I am grateful). So by my calculation, the return I was getting from my premium investment (if I needed it) was about 9% which seems pretty good to me. I think this neglected the cost of regular inflation cutting into the 9% and definitely did not include the medical/health care inflation really cutting into the 9%.
Another scenario. My MIL has paid for many years, really could use assisted living or more, and has refused to do so. The LTI company sent a nurse to qualify her for potential services and approved her, but she only agreed to one day/week in home care. She absolutely needs more care but refuses it. Not sure why she bought the policy. We are still trying to get her to use the policy and get the care she could use and has paid for.
"Not sure why she bought the policy."
You can say that about anything bought in life and not really used/appreciated.
My parents' house never burned down.
I'm not sure why they bought their homeowner's insurance policy.

Oh wait, I am actually sure.
Just remember: it's not a lie if you believe it.
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Re: Long Term Care Insurance

Post by MikeG62 »

smitcat wrote: Sun Jun 06, 2021 6:12 am
beyou wrote: Sat Jun 05, 2021 8:25 pm
whunter3333 wrote: Thu Feb 25, 2021 4:36 pm Excellent question and LTC insurance is controversial....I bought it...here is my reasoning....The value of the LTC meant that the insurer was counting on paying out to about only one in three people. So I rationalized that I was one of those three people....One person is dead of an accident before they need it (if it is me, I don't care about the return), One person doesn't need it - they live to a very ripe old age and die peacefully [and healthily?] in their sleep (Again, if it is me, I don't care about the return). And finally, the third person, needs it, uses it and benefits from it (If this is me, I am grateful). So by my calculation, the return I was getting from my premium investment (if I needed it) was about 9% which seems pretty good to me. I think this neglected the cost of regular inflation cutting into the 9% and definitely did not include the medical/health care inflation really cutting into the 9%.
Another scenario. My MIL has paid for many years, really could use assisted living or more, and has refused to do so. The LTI company sent a nurse to qualify her for potential services and approved her, but she only agreed to one day/week in home care. She absolutely needs more care but refuses it. Not sure why she bought the policy. We are still trying to get her to use the policy and get the care she could use and has paid for.
"Not sure why she bought the policy."
You can say that about anything bought in life and not really used/appreciated.
I think beyou's point was that his/her MIL bought a LTC policy, but appears to have no interest in actually taking advantage of the benefits that insurance provides. If she feels that way now, query what her thinking was at the time she initially purchased the policy and her thought process every time she cuts a premium check?
Real Knowledge Comes Only From Experience
smitcat
Posts: 7900
Joined: Mon Nov 07, 2016 10:51 am

Re: Long Term Care Insurance

Post by smitcat »

MikeG62 wrote: Sun Jun 06, 2021 9:13 am
smitcat wrote: Sun Jun 06, 2021 6:12 am
beyou wrote: Sat Jun 05, 2021 8:25 pm
whunter3333 wrote: Thu Feb 25, 2021 4:36 pm Excellent question and LTC insurance is controversial....I bought it...here is my reasoning....The value of the LTC meant that the insurer was counting on paying out to about only one in three people. So I rationalized that I was one of those three people....One person is dead of an accident before they need it (if it is me, I don't care about the return), One person doesn't need it - they live to a very ripe old age and die peacefully [and healthily?] in their sleep (Again, if it is me, I don't care about the return). And finally, the third person, needs it, uses it and benefits from it (If this is me, I am grateful). So by my calculation, the return I was getting from my premium investment (if I needed it) was about 9% which seems pretty good to me. I think this neglected the cost of regular inflation cutting into the 9% and definitely did not include the medical/health care inflation really cutting into the 9%.
Another scenario. My MIL has paid for many years, really could use assisted living or more, and has refused to do so. The LTI company sent a nurse to qualify her for potential services and approved her, but she only agreed to one day/week in home care. She absolutely needs more care but refuses it. Not sure why she bought the policy. We are still trying to get her to use the policy and get the care she could use and has paid for.
"Not sure why she bought the policy."
You can say that about anything bought in life and not really used/appreciated.
I think beyou's point was that his/her MIL bought a LTC policy, but appears to have no interest in actually taking advantage of the benefits that insurance provides. If she feels that way now, query what her thinking was at the time she initially purchased the policy and her thought process every time she cuts a premium check?
Yes , I agree, but people buy all sorts of things and never use them and often keep paying for them...
- boats
- RV's
- cars
- timeshares
- horses
Etc
And some other folks never pay for anything and end up with piles of money. The purpose of either I do not understand.
LivingTheDream
Posts: 86
Joined: Sun Oct 18, 2020 10:30 am
Location: Savannah, GA

Re: Long Term Care Insurance

Post by LivingTheDream »

smitcat wrote: Sun Jun 06, 2021 10:36 am
MikeG62 wrote: Sun Jun 06, 2021 9:13 am
smitcat wrote: Sun Jun 06, 2021 6:12 am
beyou wrote: Sat Jun 05, 2021 8:25 pm
whunter3333 wrote: Thu Feb 25, 2021 4:36 pm Excellent question and LTC insurance is controversial....I bought it...here is my reasoning....The value of the LTC meant that the insurer was counting on paying out to about only one in three people. So I rationalized that I was one of those three people....One person is dead of an accident before they need it (if it is me, I don't care about the return), One person doesn't need it - they live to a very ripe old age and die peacefully [and healthily?] in their sleep (Again, if it is me, I don't care about the return). And finally, the third person, needs it, uses it and benefits from it (If this is me, I am grateful). So by my calculation, the return I was getting from my premium investment (if I needed it) was about 9% which seems pretty good to me. I think this neglected the cost of regular inflation cutting into the 9% and definitely did not include the medical/health care inflation really cutting into the 9%.
Another scenario. My MIL has paid for many years, really could use assisted living or more, and has refused to do so. The LTI company sent a nurse to qualify her for potential services and approved her, but she only agreed to one day/week in home care. She absolutely needs more care but refuses it. Not sure why she bought the policy. We are still trying to get her to use the policy and get the care she could use and has paid for.
"Not sure why she bought the policy."
You can say that about anything bought in life and not really used/appreciated.
I think beyou's point was that his/her MIL bought a LTC policy, but appears to have no interest in actually taking advantage of the benefits that insurance provides. If she feels that way now, query what her thinking was at the time she initially purchased the policy and her thought process every time she cuts a premium check?
Yes , I agree, but people buy all sorts of things and never use them and often keep paying for them...
- boats
- RV's
- cars
- timeshares
- horses
Etc
And some other folks never pay for anything and end up with piles of money. The purpose of either I do not understand.
Smitcat,
I'm a little confused... are you suggesting that LTCi is as good of an idea as timeshares?
Living The Dream
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