Self Insuring LTC or Buying LTCI?

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WoW2012
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Re: Self Insuring LTC or Buying LTCI?

Post by WoW2012 »

Rex66 wrote: Mon Jul 04, 2022 1:47 pm
The comfortable writing the check part so it favors ltci is bogus. People have the same issue paying the premium. At least once a week someone posts should I keep paying.
[/quote]

If someone's not willing to write a check for $3k/yr for LTCi, will they be comfortable writing a check for $8K per month for LTC? That's why "self insure" usually turns into "spouse care".
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Self Insuring LTC or Buying LTCI?

Post by WoW2012 »

jebmke wrote: Mon Jul 04, 2022 1:50 pm
Insurance of any kind carries a cost, whether you are buying an annuity (longevity insurance), life insurance (the other case) etc. I don't purchase either of these because I don't need them -- I don't know the cost of those either.
The average premium is about $3,000 per year.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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Re: Self Insuring LTC or Buying LTCI?

Post by jebmke »

WoW2012 wrote: Mon Jul 04, 2022 2:21 pm
jebmke wrote: Mon Jul 04, 2022 1:50 pm
Insurance of any kind carries a cost, whether you are buying an annuity (longevity insurance), life insurance (the other case) etc. I don't purchase either of these because I don't need them -- I don't know the cost of those either.
The average premium is about $3,000 per year.
that is not what I keep asking. The insurance company pays out benefits; they add administrative cost, re-insurance and profit etc. How much of the average policy is benefit vs. non-benefit? What is the cost of the insurance, less the benefits paid out?
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
WoW2012
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Re: Self Insuring LTC or Buying LTCI?

Post by WoW2012 »

jebmke wrote: Mon Jul 04, 2022 3:11 pm
WoW2012 wrote: Mon Jul 04, 2022 2:21 pm
jebmke wrote: Mon Jul 04, 2022 1:50 pm
Insurance of any kind carries a cost, whether you are buying an annuity (longevity insurance), life insurance (the other case) etc. I don't purchase either of these because I don't need them -- I don't know the cost of those either.
The average premium is about $3,000 per year.
that is not what I keep asking. The insurance company pays out benefits; they add administrative cost, re-insurance and profit etc. How much of the average policy is benefit vs. non-benefit? What is the cost of the insurance, less the benefits paid out?
I have it from a credible source that the profit margins on long-term care insurance are less than the profit margins on auto insurance, homeowner's insurance, disability insurance, life insurance, medicare supplement insurance, umbrella liability insurance etc... That's why most companies stopped selling long-term care insurance. There wasn't enough profit in it for them.
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: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

WoW2012 wrote: Mon Jul 04, 2022 2:20 pm If someone's not willing to write a check for $3k/yr for LTCi, will they be comfortable writing a check for $8K per month for LTC? That's why "self insure" usually turns into "spouse care".
Writing a check for a certain, immediate benefit (i.e., the LTC itself) is quite different than writing a check for an uncertain, future benefit (i.e., insurance).
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RudyS
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Re: Self Insuring LTC or Buying LTCI?

Post by RudyS »

I have previously posted a suggestion to think outside of the traditional box (assisted living, nursing home) for "long term care" and also consider continuing care retirement communities (CCRC). Numerous discussions are here and accessible by searching for CCRC. But briefly, the model is that such communities have 3 levels of care. You start in an independent living unit, then as your situation changes you move to assisted living, and if needed, skilled nursing. We live in one such, the average age is in the low 80's, with people tending to move in their 70's. There is a one-time buy in price, and then a monthly fee. These aren't typically cheap. But this is an alternative model to the traditional LTC. You do have to make the move while still healthy. Worth considering.
Rex66
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Re: Self Insuring LTC or Buying LTCI?

Post by Rex66 »

willthrill81 wrote: Mon Jul 04, 2022 3:53 pm
WoW2012 wrote: Mon Jul 04, 2022 2:20 pm If someone's not willing to write a check for $3k/yr for LTCi, will they be comfortable writing a check for $8K per month for LTC? That's why "self insure" usually turns into "spouse care".
Writing a check for a certain, immediate benefit (i.e., the LTC itself) is quite different than writing a check for an uncertain, future benefit (i.e., insurance).
Yep
Definitely true
Rex66
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Re: Self Insuring LTC or Buying LTCI?

Post by Rex66 »

WoW2012 wrote: Mon Jul 04, 2022 3:50 pm
jebmke wrote: Mon Jul 04, 2022 3:11 pm
WoW2012 wrote: Mon Jul 04, 2022 2:21 pm
jebmke wrote: Mon Jul 04, 2022 1:50 pm
Insurance of any kind carries a cost, whether you are buying an annuity (longevity insurance), life insurance (the other case) etc. I don't purchase either of these because I don't need them -- I don't know the cost of those either.
The average premium is about $3,000 per year.
that is not what I keep asking. The insurance company pays out benefits; they add administrative cost, re-insurance and profit etc. How much of the average policy is benefit vs. non-benefit? What is the cost of the insurance, less the benefits paid out?
I have it from a credible source that the profit margins on long-term care insurance are less than the profit margins on auto insurance, homeowner's insurance, disability insurance, life insurance, medicare supplement insurance, umbrella liability insurance etc... That's why most companies stopped selling long-term care insurance. There wasn't enough profit in it for them.
Also likely true which is why they push hybrids

They make tons on permanent insurance and annuities
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iim7V7IM7
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Re: Self Insuring LTC or Buying LTCI?

Post by iim7V7IM7 »

Thanks for the discussion…

This is a is a bit more detail into my high-level view on how we see funding our retirement at age 65.

Since this is 4-years from now the size of our portfolio to supplement our “reliable” sources of income may vary. I have look at it in two ways: Using Portfolio Visualizer to look at the 10th, 25th and 50th percentiles (2.5% to 8% returns) and by simply assuming 4% to 6% returns for a 55% stock/45% bond on top of our planned contributions. Depending on where we end up in 4-years (tbd) we could have NO contingency reserves beyond the 1-2 years of cash to as high as 22% of our portfolio. Aside from LTC, a lot of unknown events could occur:

Rising healthcare and prescription costs,
High inflation,
My death or death of a spouse,
Unexpected family-related financial responsibilities,
Changing tax policy,
Changes to SSA,
Annuity and pension default risks

There are many unplanned events that can occur across three decades beyond LTC.

----------GOALS------------------------------------ASSETS------------------------------------------LIABILITIES----------------
---------Longevity---------------------------Reliable Income*--------------------——----80% of Essential Expenses
---------Longevity----------------22% to 29% of Diversified Portfolio------------------20% of Essential Expenses**
---------Lifestyle--------------—56% to 71% of Diversified Portfolio--------------—--100% of Discretionary Expenses***
—————Liquidity————————-0% to 22% of of Diversified Portfolio———————————-Contingency****
—————Liquidity------------------——-1-2 years Expense Reserves--------------———-------Contingency
—————Liquidity—————————————-LTC Insurance———————————————————--Contingency
----------Legacy----------—Remainder of Diversified Portfolio/Real Estate--------——Minimal (No Children)

* Two pensions are not COLA and comprise ½ of “reliable income”. The other ½ is Social Security which does COLA
** 20% of “essential expenses will increase because ½ of “reliable income” has no COLA so the 30% of Diversified Portfolio will increase.
*** I suspect the 70% of the diversified portfolio income going to discretionary will decrease as we get older adding liquidity > 80 years old
**** Liquidity for unanticipated events

I will feel better having some LTC (not an unlimited policy) but something that allows us to have a 3 month elimination period, up to 3-years of coverage each at today’s monthly nursing home rates (longer for assisted living or home care which is 75% of claims) with some inflation protection considering funding part of it ourselves as well. If there are longer situations then we will need to fund those on our own. Having some coverage will make operationalizing LTC easier in a potentially difficult time for us.
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Re: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

iim7V7IM7 wrote: Mon Jul 04, 2022 4:59 pm I will feel better having some LTC (not an unlimited policy) but something that allows us to have a 3 month elimination period, up to 3-years of coverage each at today’s monthly nursing home rates (longer for assisted living or home care which is 75% of claims) with some inflation protection considering funding part of it ourselves as well. If there are longer situations then we will need to fund those on our own. Having some coverage will make operationalizing LTC easier in a potentially difficult time for us.
If having a LTC policy will make you feel better, then it may be a good move. There's a lot to be said for sleeping well at night. However, keep in mind that the cost of 3 years of nursing home care for both you and your spouse would likely be around the $600k-$800k range, and you have about triple that in your 'discretionary' portfolio alone. As such, I don't see why you think the insurance would really benefit you that much. But again, if you and/or your spouse will feel better with the coverage, then you should probably consider it.
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smitcat
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Re: Self Insuring LTC or Buying LTCI?

Post by smitcat »

willthrill81 wrote: Mon Jul 04, 2022 12:08 pm
smitcat wrote: Mon Jul 04, 2022 12:03 pm
willthrill81 wrote: Mon Jul 04, 2022 12:00 pm
smitcat wrote: Mon Jul 04, 2022 10:40 am
willthrill81 wrote: Mon Jul 04, 2022 10:23 am

There's no need to 'reserve' funds for LTC. If LTC expenses begin, most to all the discretionary expenses that the OP is already budgeting $80k/year for will cease and be replaced by LTC expenses.
Assign no funds to LTC? Make no changes to AA for consideration of potential higher costs?
Why would you make AA changes in consideration of potential LTC expenses? The OP is already planning on withdrawing $80k from the $2m for discretionary purposes, so substituting that for LTC expenses if they occur doesn't seem like a big deal to me, even if the LTC expenses are greater than that.

Remember that exceptionally few people will ever incur more than $500k (today's dollars) of LTC expenses.
Maybe it is different for the OP - when one of our parents required care the costs for the other parent to live besides LTC was not lower at all.
That would require funds to be available for LTC and appropriately reserved.
First, even that wouldn't require that funds be set aside for LTC. At an advanced age, LTC expenses generally occur for no more than 5 years and usually significantly shorter, resulting in the person's death. After that point, they obviously incur no further expenses beyond a funeral. It's an unusual situation where a widow(er) has exactly the same expenses as the couple did before. I imagine that the lion's share of couples who had $2m but were left with $1.5m after a LTC event that resulted in one spouse's death, for instance, would still be in really good financial shape. But this is something that the OP might want to consider.

Second, I don't think that it's typical for a couple's discretionary expenses to remain the same once one spouse is receiving LTC. Speaking for myself, I don't think that I would be globetrotting if my DW was needing LTC, even if someone else was providing the care.
Neither one or two was applicable in my parent's case - no one was globetrotting before or after the first was receiving care. The survivor in both of our parent's cases did not have the exact same expenses as before but they were much higher than 1/2 of the previous expenses. I could likely go back and figure this out ...but it seemed like they were about 85-90% of those expenses left after the first SS payment was discontinued.
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willthrill81
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Re: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

smitcat wrote: Mon Jul 04, 2022 6:50 pm
willthrill81 wrote: Mon Jul 04, 2022 12:08 pm
smitcat wrote: Mon Jul 04, 2022 12:03 pm
willthrill81 wrote: Mon Jul 04, 2022 12:00 pm
smitcat wrote: Mon Jul 04, 2022 10:40 am

Assign no funds to LTC? Make no changes to AA for consideration of potential higher costs?
Why would you make AA changes in consideration of potential LTC expenses? The OP is already planning on withdrawing $80k from the $2m for discretionary purposes, so substituting that for LTC expenses if they occur doesn't seem like a big deal to me, even if the LTC expenses are greater than that.

Remember that exceptionally few people will ever incur more than $500k (today's dollars) of LTC expenses.
Maybe it is different for the OP - when one of our parents required care the costs for the other parent to live besides LTC was not lower at all.
That would require funds to be available for LTC and appropriately reserved.
First, even that wouldn't require that funds be set aside for LTC. At an advanced age, LTC expenses generally occur for no more than 5 years and usually significantly shorter, resulting in the person's death. After that point, they obviously incur no further expenses beyond a funeral. It's an unusual situation where a widow(er) has exactly the same expenses as the couple did before. I imagine that the lion's share of couples who had $2m but were left with $1.5m after a LTC event that resulted in one spouse's death, for instance, would still be in really good financial shape. But this is something that the OP might want to consider.

Second, I don't think that it's typical for a couple's discretionary expenses to remain the same once one spouse is receiving LTC. Speaking for myself, I don't think that I would be globetrotting if my DW was needing LTC, even if someone else was providing the care.
Neither one or two was applicable in my parent's case - no one was globetrotting before or after the first was receiving care. The survivor in both of our parent's cases did not have the exact same expenses as before but they were much higher than 1/2 of the previous expenses. I could likely go back and figure this out ...but it seemed like they were about 85-90% of those expenses left after the first SS payment was discontinued.
Those who anticipate such a situation should incorporate that information into their planning. It sounds as though your parents didn't have much discretionary spending. That's certainly not the case with the OP.
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smitcat
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Re: Self Insuring LTC or Buying LTCI?

Post by smitcat »

willthrill81 wrote: Mon Jul 04, 2022 6:56 pm
smitcat wrote: Mon Jul 04, 2022 6:50 pm
willthrill81 wrote: Mon Jul 04, 2022 12:08 pm
smitcat wrote: Mon Jul 04, 2022 12:03 pm
willthrill81 wrote: Mon Jul 04, 2022 12:00 pm

Why would you make AA changes in consideration of potential LTC expenses? The OP is already planning on withdrawing $80k from the $2m for discretionary purposes, so substituting that for LTC expenses if they occur doesn't seem like a big deal to me, even if the LTC expenses are greater than that.

Remember that exceptionally few people will ever incur more than $500k (today's dollars) of LTC expenses.
Maybe it is different for the OP - when one of our parents required care the costs for the other parent to live besides LTC was not lower at all.
That would require funds to be available for LTC and appropriately reserved.
First, even that wouldn't require that funds be set aside for LTC. At an advanced age, LTC expenses generally occur for no more than 5 years and usually significantly shorter, resulting in the person's death. After that point, they obviously incur no further expenses beyond a funeral. It's an unusual situation where a widow(er) has exactly the same expenses as the couple did before. I imagine that the lion's share of couples who had $2m but were left with $1.5m after a LTC event that resulted in one spouse's death, for instance, would still be in really good financial shape. But this is something that the OP might want to consider.

Second, I don't think that it's typical for a couple's discretionary expenses to remain the same once one spouse is receiving LTC. Speaking for myself, I don't think that I would be globetrotting if my DW was needing LTC, even if someone else was providing the care.
Neither one or two was applicable in my parent's case - no one was globetrotting before or after the first was receiving care. The survivor in both of our parent's cases did not have the exact same expenses as before but they were much higher than 1/2 of the previous expenses. I could likely go back and figure this out ...but it seemed like they were about 85-90% of those expenses left after the first SS payment was discontinued.
Those who anticipate such a situation should incorporate that information into their planning. It sounds as though your parents didn't have much discretionary spending. That's certainly not the case with the OP.
That is exactly what I had posted above.
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Re: Self Insuring LTC or Buying LTCI?

Post by pascal »

I think self insuring for LTC will require its own AA or have a higher emergency fund. For me, an emergency fund is a form of self insurance to be used to service debt when I cannot earn due to an emergency. I do not want to liquidate my rental property or sell stocks and bonds in response to such an event. If I do have to sell, then it carries its own tax burden and cost at the time of sale which I am not sure I will be in a position to evaluate and make a sound judgment on.

As someone wrote here earlier - your risk is your own assessment. People will have different opinions but at the end of the day its you who have to foot the bill. The enemy of a good plan is the search of a perfect plan.
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Re: Self Insuring LTC or Buying LTCI?

Post by marcopolo »

pascal wrote: Mon Jul 04, 2022 7:52 pm I think self insuring for LTC will require its own AA or have a higher emergency fund. For me, an emergency fund is a form of self insurance to be used to service debt when I cannot earn due to an emergency. I do not want to liquidate my rental property or sell stocks and bonds in response to such an event. If I do have to sell, then it carries its own tax burden and cost at the time of sale which I am not sure I will be in a position to evaluate and make a sound judgment on.

As someone wrote here earlier - your risk is your own assessment. People will have different opinions but at the end of the day its you who have to foot the bill. The enemy of a good plan is the search of a perfect plan.
For me, my entire net worth is my emergency fund.
In a true emergency, I would liquidate whatever I needed to get through it. If I was not willing to do that, then it probably was not really an emergency.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: Self Insuring LTC or Buying LTCI?

Post by jebmke »

marcopolo wrote: Mon Jul 04, 2022 8:11 pm
pascal wrote: Mon Jul 04, 2022 7:52 pm I think self insuring for LTC will require its own AA or have a higher emergency fund. For me, an emergency fund is a form of self insurance to be used to service debt when I cannot earn due to an emergency. I do not want to liquidate my rental property or sell stocks and bonds in response to such an event. If I do have to sell, then it carries its own tax burden and cost at the time of sale which I am not sure I will be in a position to evaluate and make a sound judgment on.

As someone wrote here earlier - your risk is your own assessment. People will have different opinions but at the end of the day its you who have to foot the bill. The enemy of a good plan is the search of a perfect plan.
For me, my entire net worth is my emergency fund.
In a true emergency, I would liquidate whatever I needed to get through it. If I was not willing to do that, then it probably was not really an emergency.
Same
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Re: Self Insuring LTC or Buying LTCI?

Post by Rex66 »

pascal wrote: Mon Jul 04, 2022 7:52 pm I think self insuring for LTC will require its own AA or have a higher emergency fund. For me, an emergency fund is a form of self insurance to be used to service debt when I cannot earn due to an emergency. I do not want to liquidate my rental property or sell stocks and bonds in response to such an event. If I do have to sell, then it carries its own tax burden and cost at the time of sale which I am not sure I will be in a position to evaluate and make a sound judgment on.

As someone wrote here earlier - your risk is your own assessment. People will have different opinions but at the end of the day its you who have to foot the bill. The enemy of a good plan is the search of a perfect plan.
Even if you don’t need ltc, you are spending down those assets. You also can deduct ltc expenses if significant.
HIinvestor
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Re: Self Insuring LTC or Buying LTCI?esnt

Post by HIinvestor »

In evaluating LTCi, please understand the terms of whatever policy you are considering. The patient must be evaluated and found unable to perform x number of specified activities of daily living. It doesn’t matter how slowly or painfully the person performs it, they CANNOT do it.

I did ask the MetLife agent if my understanding was correct and he agreed it was. LTCi can be a Godsend for the right client and a black hole for others. It’s all cost-benefit, assets and needs. It should certainly be considered and discussed. Lots to weigh and unpack
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Re: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

pascal wrote: Mon Jul 04, 2022 7:52 pm I think self insuring for LTC will require its own AA or have a higher emergency fund. For me, an emergency fund is a form of self insurance to be used to service debt when I cannot earn due to an emergency. I do not want to liquidate my rental property or sell stocks and bonds in response to such an event. If I do have to sell, then it carries its own tax burden and cost at the time of sale which I am not sure I will be in a position to evaluate and make a sound judgment on.
The problem is that paying LTCi premiums requires an ongoing liquidation of part of your portfolio, resulting in higher taxes. Granted, that can be planned for better than unexpected LTC expenses, but those LTC expenses may never manifest themselves, and even if they do, they could easily result in a lower total tax burden.
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Re: Self Insuring LTC or Buying LTCI?

Post by jebmke »

pascal wrote: Mon Jul 04, 2022 7:52 pm I think self insuring for LTC will require its own AA or have a higher emergency fund. For me, an emergency fund is a form of self insurance to be used to service debt when I cannot earn due to an emergency. I do not want to liquidate my rental property or sell stocks and bonds in response to such an event. If I do have to sell, then it carries its own tax burden and cost at the time of sale which I am not sure I will be in a position to evaluate and make a sound judgment on.

As someone wrote here earlier - your risk is your own assessment. People will have different opinions but at the end of the day its you who have to foot the bill. The enemy of a good plan is the search of a perfect plan.
A living trust might help; or a POA. Much of the expense may be deductible mitigating the tax risk.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: Self Insuring LTC or Buying LTCI?

Post by JoeRetire »

willthrill81 wrote: Tue Jul 05, 2022 12:10 am The problem is that paying LTCi premiums requires an ongoing liquidation of part of your portfolio, resulting in higher taxes. Granted, that can be planned for better than unexpected LTC expenses, but those LTC expenses may never manifest themselves, and even if they do, they could easily result in a lower total tax burden.
LOL!

I can honestly say I've never heard anyone worry about the "tax burden" due to LTCi premiums.

How much in additional taxes do you imagine you would end up paying each year? :oops:
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Re: Self Insuring LTC or Buying LTCI?

Post by valleyrock »

One thing I learned when taking care of a relative who needed long term care: even if the funds exist, there's a psychological barrier to spending them. Spending up to $100,000+ per year is not something people are used to, so there can be a tendency to look for the least expensive options. That may work out fine, but sometimes you get what you pay for. Going in with the mindset that large sums are going to be spent, one way or the other, can help, I think. Instead of paying low and expecting to pay more over time, consider, at least as a thought exercise, starting with a Cadillac and moving to a budget model as more is learned about needs and options.

Another thing is that there may be options which are not typically in the mainstream of the LTC paradigm. Such as buying or renting an apartment and having a young relative who's between jobs move in to handle care. Or there are below the radar approaches to hiring that out. There are tradeoffs. But as the population ages, we need more thinking outside the box. Community college programs might be developed which combine aspects of nursing care with geriatrics and home management. Nannies for the elderly, that kind of thing.
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Re: Self Insuring LTC or Buying LTCI?

Post by jebmke »

valleyrock wrote: Tue Jul 05, 2022 6:47 am One thing I learned when taking care of a relative who needed long term care: even if the funds exist, there's a psychological barrier to spending them. Spending up to $100,000+ per year is not something people are used to, so there can be a tendency to look for the least expensive options. That may work out fine, but sometimes you get what you pay for. Going in with the mindset that large sums are going to be spent, one way or the other, can help, I think. Instead of paying low and expecting to pay more over time, consider, at least as a thought exercise, starting with a Cadillac and moving to a budget model as more is learned about needs and options.

Another thing is that there may be options which are not typically in the mainstream of the LTC paradigm. Such as buying or renting an apartment and having a young relative who's between jobs move in to handle care. Or there are below the radar approaches to hiring that out. There are tradeoffs. But as the population ages, we need more thinking outside the box. Community college programs might be developed which combine aspects of nursing care with geriatrics and home management. Nannies for the elderly, that kind of thing.
The problem in some area is lack of providers at any cost. Probably true in my rural area. I may have to figure out how to roll myself off the end of the dock.
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Re: Self Insuring LTC or Buying LTCI?

Post by ChrisC »

JoeRetire wrote: Tue Jul 05, 2022 6:03 am
willthrill81 wrote: Tue Jul 05, 2022 12:10 am The problem is that paying LTCi premiums requires an ongoing liquidation of part of your portfolio, resulting in higher taxes. Granted, that can be planned for better than unexpected LTC expenses, but those LTC expenses may never manifest themselves, and even if they do, they could easily result in a lower total tax burden.
LOL!

I can honestly say I've never heard anyone worry about the "tax burden" due to LTCi premiums.

How much in additional taxes do you imagine you would end up paying each year? :oops:
Yep, that's really a funny observation about potential tax burdens with paying for LTCi premiums, which are eligible for medical expense deductibility or could be paid, as I do, from an HSA funds. I have no idea about an "ongoing liquidation of part of your portfolio" for paying LTCi premiums -- if you have to use your portfolio for living or medical expenses, then so be it, tax burden aside.
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Re: Self Insuring LTC or Buying LTCI?

Post by dknightd »

I've decided to self insure. I keep a line item in my budget for it. We also have equity in our home. We also have income for life. Either the kids will get money, or, it could be spent on long term care.

Edit: I'm, pretty sure I do not want to be in long term care for very long.
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
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Re: Self Insuring LTC or Buying LTCI?

Post by ChrisC »

valleyrock wrote: Tue Jul 05, 2022 6:47 am One thing I learned when taking care of a relative who needed long term care: even if the funds exist, there's a psychological barrier to spending them. Spending up to $100,000+ per year is not something people are used to, so there can be a tendency to look for the least expensive options. That may work out fine, but sometimes you get what you pay for. Going in with the mindset that large sums are going to be spent, one way or the other, can help, I think. Instead of paying low and expecting to pay more over time, consider, at least as a thought exercise, starting with a Cadillac and moving to a budget model as more is learned about needs and options.
I've heard about this barrier before, where people with the capacity to spend generously for LTC simply become stingy and want family members to provide all the necessary care or pay for the necessary care on the cheap. I think this would be a major problem for a couple where one spouse needs LTC and expects the other healthy spouse to be the caregiver -- it would drain the physical and mental health of the caregiving spouse. I think having LTCi makes it less likely for the healthy spouse or other family members to incur the primary caregiving role for someone who needs LTCI, though our LTCi permits family members to be paid for assuming that role for home health care provided to an LTCi insured. Unfortunately, I know of several couples, with no LTCI, who expect the other spouse to perform all caregiving responsibilites if one of them needs LTC.
valleyrock wrote: Tue Jul 05, 2022 6:47 am Another thing is that there may be options which are not typically in the mainstream of the LTC paradigm. Such as buying or renting an apartment and having a young relative who's between jobs move in to handle care. Or there are below the radar approaches to hiring that out. There are tradeoffs. But as the population ages, we need more thinking outside the box. Community college programs might be developed which combine aspects of nursing care with geriatrics and home management. Nannies for the elderly, that kind of thing.
I know of a few people who will be relying on the girl down the street or the young lady in the apartment down the hall who will take care of them when they need LTC. It's just wishful thinking. A major impediment to providing suitable LTC for the elderly is that the caregiving, paid personnel are low wage, low status, and they have to perform extremely difficult jobs. Even in the most desirable, well-appointed skilled nursing care facilities, staff turn-over is a major, on-going problem. Have you ever met a CNA that has stayed at the same facility for more than 2-3 years?
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Re: Self Insuring LTC or Buying LTCI?

Post by jebmke »

ChrisC wrote: Tue Jul 05, 2022 7:37 am I know of a few people who will be relying on the girl down the street or the young lady in the apartment down the hall who will take care of them when they need LTC. It's just wishful thinking.
Because the men don't have drivers licenses?
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: Self Insuring LTC or Buying LTCI?

Post by nhs76 »

Someone above mentioned the Continuing Care Retirement Communities, how one can start in Independent Living and progress to Assisted Living and Nursing Care when the time is right. Beware that what sounds like a great idea may be great, or it may not go as planned, depending on the community and the state of residence. My father in NY State was not allowed to transfer from Independent to the community's Assisted Living facility because the Assisted Living facility was only approved for certain levels of care, and they said he needed a different level. Assisted Living is not as highly regulated as Nursing Homes, so each facility can be different in what they offer. The moral of the story is, ask a lot of specific questions before you move in; don't assume it will all work out later on.
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Re: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

JoeRetire wrote: Tue Jul 05, 2022 6:03 am
willthrill81 wrote: Tue Jul 05, 2022 12:10 am The problem is that paying LTCi premiums requires an ongoing liquidation of part of your portfolio, resulting in higher taxes. Granted, that can be planned for better than unexpected LTC expenses, but those LTC expenses may never manifest themselves, and even if they do, they could easily result in a lower total tax burden.
LOL!

I can honestly say I've never heard anyone worry about the "tax burden" due to LTCi premiums.

How much in additional taxes do you imagine you would end up paying each year? :oops:
Whatever your marginal tax rate is multiplied by the premiums. It's not something that concerns me at all, but it clearly concerns pascal.

I've never before heard of someone who was concerned about the 'tax burden' created by paying for LTC expenses.
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Re: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

ChrisC wrote: Tue Jul 05, 2022 7:06 am
JoeRetire wrote: Tue Jul 05, 2022 6:03 am
willthrill81 wrote: Tue Jul 05, 2022 12:10 am The problem is that paying LTCi premiums requires an ongoing liquidation of part of your portfolio, resulting in higher taxes. Granted, that can be planned for better than unexpected LTC expenses, but those LTC expenses may never manifest themselves, and even if they do, they could easily result in a lower total tax burden.
LOL!

I can honestly say I've never heard anyone worry about the "tax burden" due to LTCi premiums.

How much in additional taxes do you imagine you would end up paying each year? :oops:
Yep, that's really a funny observation about potential tax burdens with paying for LTCi premiums, which are eligible for medical expense deductibility or could be paid, as I do, from an HSA funds. I have no idea about an "ongoing liquidation of part of your portfolio" for paying LTCi premiums -- if you have to use your portfolio for living or medical expenses, then so be it, tax burden aside.
As I said to JoeRetire, the taxes resulting from paying for LTC expenses are not a concern for me. Rather, I was replying to pascal's concern and pointing out that you don't avoid taxes with LTCi.
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Re: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

ChrisC wrote: Tue Jul 05, 2022 7:37 am I've heard about this barrier before, where people with the capacity to spend generously for LTC simply become stingy and want family members to provide all the necessary care or pay for the necessary care on the cheap.
I'm sure that that happens fairly often. By the same token, we've have many threads here over the years from people with multi-million dollar portfolios commenting on their seeming inability to spend more than something like 2% of their portfolio each year.

I don't think the issue is that people don't want to pay for LTC as much as many retirees dependent on their portfolio are scared about running out of money, even if that fear is unjustified.
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Re: Self Insuring LTC or Buying LTCI?

Post by pascal »

willthrill81 wrote: Tue Jul 05, 2022 9:42 am
JoeRetire wrote: Tue Jul 05, 2022 6:03 am
willthrill81 wrote: Tue Jul 05, 2022 12:10 am The problem is that paying LTCi premiums requires an ongoing liquidation of part of your portfolio, resulting in higher taxes. Granted, that can be planned for better than unexpected LTC expenses, but those LTC expenses may never manifest themselves, and even if they do, they could easily result in a lower total tax burden.
LOL!

I can honestly say I've never heard anyone worry about the "tax burden" due to LTCi premiums.

How much in additional taxes do you imagine you would end up paying each year? :oops:
Whatever your marginal tax rate is multiplied by the premiums. It's not something that concerns me at all, but it clearly concerns pascal.

I've never before heard of someone who was concerned about the 'tax burden' created by paying for LTC expenses.
My comment is taken out of context. I was saying that in order to fund LTC expenses outside of an emergency fund you might have to sell part of your portfolio because you need the money "immediately" rather than a planned glide path. This was in context of having a separate AA for LTC expenses so that you do not have to make a distress sale.
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Re: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

pascal wrote: Tue Jul 05, 2022 9:51 am
willthrill81 wrote: Tue Jul 05, 2022 9:42 am
JoeRetire wrote: Tue Jul 05, 2022 6:03 am
willthrill81 wrote: Tue Jul 05, 2022 12:10 am The problem is that paying LTCi premiums requires an ongoing liquidation of part of your portfolio, resulting in higher taxes. Granted, that can be planned for better than unexpected LTC expenses, but those LTC expenses may never manifest themselves, and even if they do, they could easily result in a lower total tax burden.
LOL!

I can honestly say I've never heard anyone worry about the "tax burden" due to LTCi premiums.

How much in additional taxes do you imagine you would end up paying each year? :oops:
Whatever your marginal tax rate is multiplied by the premiums. It's not something that concerns me at all, but it clearly concerns pascal.

I've never before heard of someone who was concerned about the 'tax burden' created by paying for LTC expenses.
My comment is taken out of context. I was saying that in order to fund LTC expenses outside of an emergency fund you might have to sell part of your portfolio because you need the money "immediately" rather than a planned glide path. This was in context of having a separate AA for LTC expenses so that you do not have to make a distress sale.
Thanks for the clarification. But how much additional taxes would be paid by this 'distress sale'? Likely no more than 10%? I don't see that as good justification for a separate AA for LTC expenses (it seems like the tax tale wagging the investment dog), and that's aside from the fact that one does not know how much those LTC expenses will be. For at least 50% of retirees, those expenses will be zero.
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Re: Self Insuring LTC or Buying LTCI?

Post by pascal »

willthrill81 wrote: Tue Jul 05, 2022 9:55 am But how much additional taxes would be paid by this 'distress sale'? Likely no more than 10%? I don't see that as good justification for a separate AA for LTC expenses (it seems like the tax tale wagging the investment dog), and that's aside from the fact that one does not know how much those LTC expenses will be. For at least 50% of retirees, those expenses will be zero.
Yes, we don't know that number. We also don't know when that expenditure might happen and if its going to be a long drawn out expense or shorter stints of considerable expense. Also, we don't know if the person incapacitated is the only one able to make sound judgment on what part of the portfolio should be sold to fund expenses and for how long. Tax and the possibility of making a distress sale is what drives the need to have an emergency fund. If that is not a concern and you are willing to melt portions of your portfolio to get the best possible care whenever the case arises, then there really is no case for any LTCi.
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Re: Self Insuring LTC or Buying LTCI?

Post by ChrisC »

willthrill81 wrote: Tue Jul 05, 2022 9:48 am
ChrisC wrote: Tue Jul 05, 2022 7:37 am I've heard about this barrier before, where people with the capacity to spend generously for LTC simply become stingy and want family members to provide all the necessary care or pay for the necessary care on the cheap.
I'm sure that that happens fairly often. By the same token, we've have many threads here over the years from people with multi-million dollar portfolios commenting on their seeming inability to spend more than something like 2% of their portfolio each year.

I don't think the issue is that people don't want to pay for LTC as much as many retirees dependent on their portfolio are scared about running out of money, even if that fear is unjustified.
No, I’m talking about people who do have the ability to comfortably pay for outsourcing LTC (and thus are not scared of running out of money) but see their family members as caregivers responsible for assuming the enormous burden of LTC. This isn’t an inability to spend in general but an emotional mindset perhaps grounded in family or cultural values. I personally know a few of these folks. They will likely embark on this plan until it doesn’t work if they land in a position to need LTC.
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Re: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

ChrisC wrote: Tue Jul 05, 2022 12:29 pm
willthrill81 wrote: Tue Jul 05, 2022 9:48 am
ChrisC wrote: Tue Jul 05, 2022 7:37 am I've heard about this barrier before, where people with the capacity to spend generously for LTC simply become stingy and want family members to provide all the necessary care or pay for the necessary care on the cheap.
I'm sure that that happens fairly often. By the same token, we've have many threads here over the years from people with multi-million dollar portfolios commenting on their seeming inability to spend more than something like 2% of their portfolio each year.

I don't think the issue is that people don't want to pay for LTC as much as many retirees dependent on their portfolio are scared about running out of money, even if that fear is unjustified.
No, I’m talking about people who do have the ability to comfortably pay for outsourcing LTC (and thus are not scared of running out of money) but see their family members as caregivers responsible for assuming the enormous burden of LTC. I personally know a few of these folks. They will likely embark on this plan until it doesn’t work if they land in a position to need LTC.
I'll be careful to not throw stones at such folks. They might be very willing to provide LTC to a family member themselves and so expect the same from them. But at the same time, they should know that the burden of providing LTC can be very high. When both my grandparents needed such care for six months after a car accident, there was no choice but for them to move in with us. My mother was a retired nurse and able to provide them the care they needed, but it took quite a toll on her. The 24/7 nature of it was probably the hardest aspect. But we have a neighbor who provided most of her husband's LTC for several years because she wanted him at home with her and had a hard time finding good home health aides. Even when was able to find some, they only came over one day a week.
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Re: Self Insuring LTC or Buying LTCI?

Post by Rex66 »

In many areas it’s very difficult to get good and reliable aides especially if coverage is near 24-7. Doesn’t matter if you have insurance or not. For one family member we pay extra beyond tge agreed rates (guess you can call it a tip) but the issue persists.
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Re: Self Insuring LTC or Buying LTCI?

Post by JoeRetire »

dknightd wrote: Tue Jul 05, 2022 7:24 am Edit: I'm, pretty sure I do not want to be in long term care for very long.
Do you imagine anyone does? :confused
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Re: Self Insuring LTC or Buying LTCI?

Post by ChrisC »

willthrill81 wrote: Tue Jul 05, 2022 12:35 pm
ChrisC wrote: Tue Jul 05, 2022 12:29 pm
willthrill81 wrote: Tue Jul 05, 2022 9:48 am
ChrisC wrote: Tue Jul 05, 2022 7:37 am I've heard about this barrier before, where people with the capacity to spend generously for LTC simply become stingy and want family members to provide all the necessary care or pay for the necessary care on the cheap.
I'm sure that that happens fairly often. By the same token, we've have many threads here over the years from people with multi-million dollar portfolios commenting on their seeming inability to spend more than something like 2% of their portfolio each year.

I don't think the issue is that people don't want to pay for LTC as much as many retirees dependent on their portfolio are scared about running out of money, even if that fear is unjustified.
No, I’m talking about people who do have the ability to comfortably pay for outsourcing LTC (and thus are not scared of running out of money) but see their family members as caregivers responsible for assuming the enormous burden of LTC. I personally know a few of these folks. They will likely embark on this plan until it doesn’t work if they land in a position to need LTC.
I'll be careful to not throw stones at such folks. They might be very willing to provide LTC to a family member themselves and so expect the same from them. But at the same time, they should know that the burden of providing LTC can be very high. When both my grandparents needed such care for six months after a car accident, there was no choice but for them to move in with us. My mother was a retired nurse and able to provide them the care they needed, but it took quite a toll on her. The 24/7 nature of it was probably the hardest aspect. But we have a neighbor who provided most of her husband's LTC for several years because she wanted him at home with her and had a hard time finding good home health aides. Even when was able to find some, they only came over one day a week.
Who’s throwing stones? It’s always a choice for people who are in need of LTC to want other family members to assume that burden even though they can well afford to outsource LTC to someone else. I would not want my family members to take on that burden if I can afford to outsource it. Your examples demonstrate that sometimes there isn't that much of a choice for the person in need of LTC, either because he or she cannot afford to outsource it, the outsource option is not a good fit, or because a caregiving family member has decided to take on that burden, for whatever reason. My wife and I are taking away that last situation for our family. I don't see how that's throwing stones at anyone.
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Re: Self Insuring LTC or Buying LTCI?

Post by RudyS »

nhs76 wrote: Tue Jul 05, 2022 7:48 am Someone above mentioned the Continuing Care Retirement Communities, how one can start in Independent Living and progress to Assisted Living and Nursing Care when the time is right. Beware that what sounds like a great idea may be great, or it may not go as planned, depending on the community and the state of residence. My father in NY State was not allowed to transfer from Independent to the community's Assisted Living facility because the Assisted Living facility was only approved for certain levels of care, and they said he needed a different level. Assisted Living is not as highly regulated as Nursing Homes, so each facility can be different in what they offer. The moral of the story is, ask a lot of specific questions before you move in; don't assume it will all work out later on.
I wrote that post. You make a very good point, which is valid for any facility you are considering. There are numerous types of CCRC, what I described is a typical Type 1. But there are many variations and it depends on more than the State. I know of one place where the skilled nursing part is not set up for dementia care. One just has to do careful research.
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Re: Self Insuring LTC or Buying LTCI?

Post by ChrisC »

pascal wrote: Tue Jul 05, 2022 10:13 am
willthrill81 wrote: Tue Jul 05, 2022 9:55 am But how much additional taxes would be paid by this 'distress sale'? Likely no more than 10%? I don't see that as good justification for a separate AA for LTC expenses (it seems like the tax tale wagging the investment dog), and that's aside from the fact that one does not know how much those LTC expenses will be. For at least 50% of retirees, those expenses will be zero.
Yes, we don't know that number. We also don't know when that expenditure might happen and if its going to be a long drawn out expense or shorter stints of considerable expense. Also, we don't know if the person incapacitated is the only one able to make sound judgment on what part of the portfolio should be sold to fund expenses and for how long. Tax and the possibility of making a distress sale is what drives the need to have an emergency fund. If that is not a concern and you are willing to melt portions of your portfolio to get the best possible care whenever the case arises, then there really is no case for any LTCi.
There's still a case for LTCi. I don't think there's anyone who has ever made the case in this forum that a good LTCi policy, if activated and used to its fullest coverage, doesn't trump self-funding, strictly from a financial standpoint. I calculate that if I were to get hit by a car tomorrow and became a quadriplegic, or 4 months from now became afflicted with some neurological disorder rendering me helpless, or 5 years from now became cognitively impaired with the onset of dementia, that in each case my LTCi policy would be substantially better than self-funding if I used that policy for the duration of its coverage, 5 years in my case. My break-even points might be different for each policy triggering situation and certainly I don't gain the benefits of the policy if I never use it or use it for a short period before the break-even period (of where policy benefits equal premiums paid, plus lost opportunity/investment cost). But right now, the break-even period for my first event mentioned here would be around 4 months of policy coverage. It might be 12 months for the last event mentioned if my premiums get increased next year, as I expect.

Further, I purchased LTCi primarily to shift the financial burden of LTC to someone else, rather than to my portfolio or my assets, and to avoid my family from scrambling around to figure out what assets in my portfolio to use for LTC. It might not be a big deal for me to do that, but I can see it would be difficult for my spouse or other family members to do that if I became mentally incompetent: do we use Dad's HSA funds to fund some of the LTC, do we liquidate some stocks or index funds he has in his taxable accounts and which ones, do we use the income stream from RMDs (or do we continue to do Roth conversions) and how does this impact tax planning? I've had to scramble to financially manage LTC for my mother, MIL and BIL, and it's not a simple task for the personal finance novice.
Last edited by ChrisC on Tue Jul 05, 2022 4:14 pm, edited 1 time in total.
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Re: Self Insuring LTC or Buying LTCI?

Post by smitcat »

RudyS wrote: Tue Jul 05, 2022 3:29 pm
nhs76 wrote: Tue Jul 05, 2022 7:48 am Someone above mentioned the Continuing Care Retirement Communities, how one can start in Independent Living and progress to Assisted Living and Nursing Care when the time is right. Beware that what sounds like a great idea may be great, or it may not go as planned, depending on the community and the state of residence. My father in NY State was not allowed to transfer from Independent to the community's Assisted Living facility because the Assisted Living facility was only approved for certain levels of care, and they said he needed a different level. Assisted Living is not as highly regulated as Nursing Homes, so each facility can be different in what they offer. The moral of the story is, ask a lot of specific questions before you move in; don't assume it will all work out later on.
I wrote that post. You make a very good point, which is valid for any facility you are considering. There are numerous types of CCRC, what I described is a typical Type 1. But there are many variations and it depends on more than the State. I know of one place where the skilled nursing part is not set up for dementia care. One just has to do careful research.
Also do careful research on the current and potential future financial condition of any considered CCRC.
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Re: Self Insuring LTC or Buying LTCI?

Post by mrc »

My inlaws bought into a "full service" CCRC in Michigan in 1996, FIL died in 1997, MIL remained there until ~2014 when she moved to a memory care unit. During the time MIL was still independent, the facility underwent a number of changes — all for the worse. 24X7 on site medical care transitioned to monthly visits by an MD. Emergency service consisted of a trip to the hospital by ambulance. Meal quality eroded. Staffing levels were reduced. They started nickle-diming all sorts of services. And when MIL moved it, it took over a year to receive the initial deposited money back. My FIL thought he set up MIL in a great situation and he would have been very disappointed at how things turned out. The facility has since declared bankruptcy and been sold (twice). Bear this in mind when making long term care arrangements that involved a CCRC.

Regarding LTCi policies, check your state's coverage for care if the carried goes bankrupt while you are receiving benefits. My state only covered something like $250,000, which we could self insure for.
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Re: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

ChrisC wrote: Tue Jul 05, 2022 3:22 pm
willthrill81 wrote: Tue Jul 05, 2022 12:35 pm
ChrisC wrote: Tue Jul 05, 2022 12:29 pm
willthrill81 wrote: Tue Jul 05, 2022 9:48 am
ChrisC wrote: Tue Jul 05, 2022 7:37 am I've heard about this barrier before, where people with the capacity to spend generously for LTC simply become stingy and want family members to provide all the necessary care or pay for the necessary care on the cheap.
I'm sure that that happens fairly often. By the same token, we've have many threads here over the years from people with multi-million dollar portfolios commenting on their seeming inability to spend more than something like 2% of their portfolio each year.

I don't think the issue is that people don't want to pay for LTC as much as many retirees dependent on their portfolio are scared about running out of money, even if that fear is unjustified.
No, I’m talking about people who do have the ability to comfortably pay for outsourcing LTC (and thus are not scared of running out of money) but see their family members as caregivers responsible for assuming the enormous burden of LTC. I personally know a few of these folks. They will likely embark on this plan until it doesn’t work if they land in a position to need LTC.
I'll be careful to not throw stones at such folks. They might be very willing to provide LTC to a family member themselves and so expect the same from them. But at the same time, they should know that the burden of providing LTC can be very high. When both my grandparents needed such care for six months after a car accident, there was no choice but for them to move in with us. My mother was a retired nurse and able to provide them the care they needed, but it took quite a toll on her. The 24/7 nature of it was probably the hardest aspect. But we have a neighbor who provided most of her husband's LTC for several years because she wanted him at home with her and had a hard time finding good home health aides. Even when was able to find some, they only came over one day a week.
Who’s throwing stones? It’s always a choice for people who are in need of LTC to want other family members to assume that burden even though they can well afford to outsource LTC to someone else. I would not want my family members to take on that burden if I can afford to outsource it. Your examples demonstrate that sometimes there isn't that much of a choice for the person in need of LTC, either because he or she cannot afford to outsource it, the outsource option is not a good fit, or because a caregiving family member has decided to take on that burden, for whatever reason. My wife and I are taking away that last situation for our family. I don't see how that's throwing stones at anyone.
I didn't mean to say that you were throwing stones. Rather, I simply wanted to clarify, particularly for others who might be reading this, that family members providing LTC for one another is not always due to hard heartedness or a desire to hang on to money.
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Re: Self Insuring LTC or Buying LTCI?

Post by hudson »

What's the optimal age for buying LTC insurance?
For someone that is the optimal age and healthy, how much does it cost and what's the payout?
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Re: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

hudson wrote: Tue Jul 05, 2022 8:36 pm What's the optimal age for buying LTC insurance?
As late as you can while you're health is still good enough to qualify. If you buy a policy in your 50s, you should realize that it's very unlikely that you'll file a claim until you're in your 70s; according to the AALTCI, 92% of LTCi benefits begin at age 70 or later. That's a long time to pay premiums with only a tiny likelihood of a claim. But if you wait until you're in your 60s, your health might not be good enough to qualify for a policy. So it's a bit of a catch-22; either starting paying for a policy that you're very unlikely to utilize for at least a decade or risk not being able to buy a policy at all.
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Re: Self Insuring LTC or Buying LTCI?

Post by Silk McCue »

hudson wrote: Tue Jul 05, 2022 8:36 pm What's the optimal age for buying LTC insurance?
For someone that is the optimal age and healthy, how much does it cost and what's the payout?
Here’s a snip from me on a thread last March.
You buy LTCi with your health and age. At policy based ages of 59/62 we purchased 6 year benefit $200 per day coverage with 3% compounded inflation coverage within the past 6 months. These are Partnership policies that provide asset protection of $438,000 (6 years x 365 x $200) plus inflation for the well spouse were one to need to go on Medicaid. We don’t expect to need that benefit but it is there if needed. 90 day elimination period.

Raising rates is possible but if they do so it requires approval by my states insurance regulators and cannot include any additional profit since it is a Partnership policy. .

Our combined annual premium is $6200 with my portion being slightly less than my wife’s. With no children and having owned a private duty home health agency taking care of the elderly in their homes and in facilities this has been a part of our plan for quite some time. We are very pleased to have this in place. We of course will be there to help one another should the need arise in the future but don’t want to place an undue or overwhelming burden on the other should care needs become significant.

The policy was written by Mass Mutual. We used Scott Olson as our broker having learned of him a few years back. You can Google his name if you want to find his web presence and contact information.
He is broadly licensed and has access to multiple providers as well as varying flavors of LTCi.
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Re: Self Insuring LTC or Buying LTCI?

Post by ChrisC »

hudson wrote: Tue Jul 05, 2022 8:36 pm What's the optimal age for buying LTC insurance?
For someone that is the optimal age and healthy, how much does it cost and what's the payout?
I bought at age 48, with coverage effective on 1/1/2003. Since then (with at least one premium increase and one downgrade in my inflation adjustment from 5% to 2.6%), I've sunk in around $28K in premiums -- this buys me 5 years of coverage, with a daily benefit amount of $314, and total lifetime benefit of $574K.

Perhaps, if I invested my monthly premiums in Apple stock over that period of time, self-funding would be more optimal in hindsight. :oops:

I'm ok if my policy nevers pays out -- actually I'd be delighted if that occurred, but if circumstances dictate that I have to use the policy for a while, I'd be happy that I took out that policy even if coverage lasted a few months. I'm not searching for a sweet spot of coverage or payout.

My wife and I are belt and suspenders people when it comes to potential LTC; we can financially self-insure and our current home has aging in place (and potential live-in home health care written all over it); we have LTCi (and in my case, my annual premium is now $2004), and we're on the waitlist for a CCRC.
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Re: Self Insuring LTC or Buying LTCI?

Post by CloseEnough »

Interesting discussion. I will probably "self insure" if/when LTC becomes necessary, but will take another look at it after reading this thread. I know there are risks of not buying LTCi. There are also risk when buying LTCi.
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Re: Self Insuring LTC or Buying LTCI?

Post by willthrill81 »

CloseEnough wrote: Wed Jul 06, 2022 8:45 am Interesting discussion. I will probably "self insure" if/when LTC becomes necessary, but will take another look at it after reading this thread. I know there are risks of not buying LTCi. There are also risk when buying LTCi.
Correct. There are risks whichever path one takes. One seldom discussed is one's LTCi company not paying for a claim without a fight. I can think of two posters who have dealt with this specific issue, one of whom was involved in a months long legal battle and had to hire an attorney (at her own expense, of course) before the company would pay the claim for her father.
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