BoglerAnon wrote: ↑Sat Nov 27, 2021 1:51 pm
Was out of town for a bit and returned home to a surprise, not one, but two LTCI policy packets in the mail - Transamerica and Trustmark. Both via one of the large tech employers in the state. Hadn't heard a thing from Transamerica, but I guess it went through all the same. Already applied and got my exemption letter, so now I have to figure out which policy to keep and could some some help confirming my choice.
The Transamerica policy is roughly half the price annually vs. Trustmark. I am leaning towards keeping Transamerica as the amount of insurance I'd get from either would not make a dent in any actual LTC needs so might as well keep building assets for better self-insurance. Absent the law I'd continue to self-insure.
The only reason I'm questioning my plan to keep Transamerica that is that Trustmark seems to have some language surrounding rate guarantees and some small amount of value as it's also a life insurance policy. I don't think either of these is valuable enough to be worth almost double the price, however I could use some validation on this choice and my reading of the documents as I'm inexperienced in this area (No kids and no existing life insurance policy / related experience). I read the docs over twice yesterday and felt like I understood even less after a re-read. I'm thinking my simple first take to go cheaper is best, but could use the internet hive mind's help.
My wife has both in place, as well. She is sticking with her Transamerica policy, and dropping Trustmark, since she already has private life insurance in place. I also have a Trustmark policy in-force as well. I plan on dropping it once my Nationwide policy is put in-force (with a back date of 10/28).
I'd go with Trustmark if you don't have any private life insurance in place. If you don't end up needing the LTC insurance, at least the money will come back to your intended beneficiaries (once you have them), tax-free, if you were to be hit by the proverbial bus.
Depending on how you fund it and the timing there are living benefits with Trustmark that would allow you to accelerate 75% of the death benefit if you were to be diagnosed with a terminal illness. Obviously, there is the long-term care rider as well. It's not much, but it buys you a little bit of time to help avoid liquidating assets in a down market/fire sale. . . or to take the family to Disneyland, etc.
2.4 years is the average length of stay in the tech industry (I'm guessing you are at MSFT/AMZN) so relying on group insurance to protect assets could be a bit dicey which is why I think a private policy is a good idea even though you don't currently have a spouse or kids. You may not be insurable down the road at a Preferred Rating, and who knows what the long-term impacts of COVID-era underwriting will be on the insurance industry down the road.
In that scenario, if it makes sense, you'd have the ability to fully-fund the policy (it's a "flexible premium") to make the benefits a bit more robust in the end, rather than going through underwriting when you are older and or less healthy. From a tax-planning perspective, especially in arguably the worst state in the nation to die in, this could be a nice tool to have in your back pocket.
I'm currently dealing with ailing parents, and I wish they had something in place like LTC. Liquidating annuities and land to cover bills and get them the help they need has not been cost or time efficient even in good market conditions. The new capital gains tax has compounded the inefficiency, and dealing with the VA and Medicare has been a nightmare. Leaving their financial futures up to chance and good luck is what my parents did, and they have run out of luck (other than having me around).
I'm assuming a lot here. Even if the plan is to stay single with no kids, I think having something in place is better than not.
Just my anecdotal 2 cents. . .