Long Term Care Insurance

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
WoW2012
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Joined: Sun Dec 23, 2012 10:28 am

Re: Long Term Care Insurance

Post by WoW2012 »

WoodSpinner wrote: Sun Feb 26, 2023 9:26 pm
Ray_McKigney wrote: Sat Feb 25, 2023 5:30 pm Good grief. :oops:
So far, you are the only one I have read make this allegation!

WoodSpinner

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

Post by Chardo »

Insurance agents should be encouraged to post, not shunned. Like it or not, they are actual experts on the subject.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

MikeG62 wrote: Mon Feb 27, 2023 9:21 am
I don't think that is a particularly attractive catastrophic policy. After all, you are going to spend $250,000 with a very low probability of getting any material benefits (you need to be getting care for >36 months before the real benefits kick in).
I agree with your analysis.
In this particular case, both the husband and the wife had family histories that make it nearly impossible for them to qualify for a traditional long-term care policy AND make it very likely that one or both of them could need care for a very long period of time.

Additionally, maximizing his estate for his heirs was VERY important for him. His current estate is about $7M but he wants to leave even more to his heirs than that.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

Chardo wrote: Sun Mar 05, 2023 12:37 pm Insurance agents should be encouraged to post, not shunned. Like it or not, they are actual experts on the subject.
Thank you, Chardo.
This is particularly true about long-term care insurance. There's so much confusion in the industry about it, even amongst licensed insurance agents.

Recently, an insurance agent told a client of mine that there are no more "stand alone long-term care insurance policies". "The only way to buy long-term care insurance is if you buy it on top of a life insurance policy."

That's 100% false, but it's a shame that an insurance agent isn't even aware of what's available on the market today.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
tj
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Re: Long Term Care Insurance

Post by tj »

WoW2012 wrote: Sun Mar 05, 2023 12:34 pm
Iconicus wrote: Sun Feb 26, 2023 8:48 pm
WoW2012 wrote: Sat May 14, 2022 1:48 pm
ncbill wrote: Tue Apr 19, 2022 4:03 pm

Curious how much that $300k plan WoW2012 sold pays out annually/lifetime.
It was actually a one-time $250K premium. It's a truly "catastrophic plan". It pays practically nothing for the first 36 months (about $3K per month per spouse.) Beginning with the 37th month of care it starts to pay an inflated amount which grows by 5% compound every year from the very first policy year (e.g. . There's no limit on how long it can pay benefits. It'll never run out of LTC benefits.) It's the "high deductible, catastrophic policy" many bogleheads have expressed an interest in. It's out there. You just have to find it. It's easy to qualify for, too. These particular clients had some very challenging health issues that make the probability of needing care for a long time a very real possibility. They would not have been able to qualify for a rich traditional LTCi policy. The $250K was less than 5% of his portfolio. He used the $250K as a way to hedge his bets.
None of the agents that I've worked with this month were able to find such a plan (I don't live in NY). I see that this post was about a year ago. If it is true that you can still buy such a catastrophic plan policy (elim. period = 3yr, unlimited benefit period), please PM me.

There are policies like that which include a lump sum single premium (which is used to pay for the care during the elimination period) followed by annual premiums to pay for the unlimited long-term care benefits.

However, if you're healthy enough to qualify for a traditional LTCi policy, you can get an unlimited benefit period with a 180-day elimination period FOR LESS THAN a policy with a three-year elimination period and an unlimited benefit period.
How is this possible?
Rex66
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Re: Long Term Care Insurance

Post by Rex66 »

One has to be cared though with that

The vast majority of agents are not experts

Most leave the industry within a few years. They get 99% of their training from insurance companies.

Many agents will attempt you to buy an insurance product. Sometimes it’s a good fit. Some times not.

I will say ltci agents have a better chance. It’s not as bad as life agents whom you have an incredibly high chance of being steered towards permanent insurance.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

tj wrote: Sun Mar 05, 2023 12:46 pm
WoW2012 wrote: Sun Mar 05, 2023 12:34 pm
Iconicus wrote: Sun Feb 26, 2023 8:48 pm
WoW2012 wrote: Sat May 14, 2022 1:48 pm
ncbill wrote: Tue Apr 19, 2022 4:03 pm

Curious how much that $300k plan WoW2012 sold pays out annually/lifetime.
It was actually a one-time $250K premium. It's a truly "catastrophic plan". It pays practically nothing for the first 36 months (about $3K per month per spouse.) Beginning with the 37th month of care it starts to pay an inflated amount which grows by 5% compound every year from the very first policy year (e.g. . There's no limit on how long it can pay benefits. It'll never run out of LTC benefits.) It's the "high deductible, catastrophic policy" many bogleheads have expressed an interest in. It's out there. You just have to find it. It's easy to qualify for, too. These particular clients had some very challenging health issues that make the probability of needing care for a long time a very real possibility. They would not have been able to qualify for a rich traditional LTCi policy. The $250K was less than 5% of his portfolio. He used the $250K as a way to hedge his bets.
None of the agents that I've worked with this month were able to find such a plan (I don't live in NY). I see that this post was about a year ago. If it is true that you can still buy such a catastrophic plan policy (elim. period = 3yr, unlimited benefit period), please PM me.

There are policies like that which include a lump sum single premium (which is used to pay for the care during the elimination period) followed by annual premiums to pay for the unlimited long-term care benefits.

However, if you're healthy enough to qualify for a traditional LTCi policy, you can get an unlimited benefit period with a 180-day elimination period FOR LESS THAN a policy with a three-year elimination period and an unlimited benefit period.
How is this possible?

The policy with the 180 day elimination period has no death benefit and no cash value. But it does have an unlimited benefit period and inflation protection.

The policy with the "long elimination period" has a death benefit and requires a large lump sum premium up front to fund care during the elimination period. That's why it's more expensive.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
hoops777
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Re: Long Term Care Insurance

Post by hoops777 »

My brother had a Genworth policy with a 5% inflation adjustment in Calif. I think he bought it about 20 years ago.
He passed 4 years ago and the policy paid out over 300K. He was single and got 98 % of his care at home. He had about 30K left in his policy when he passed.
My wife and I bought the exact same policy 10 or 11 years ago at ages 60/62.
Our premiums have gone up to about 4800 for the two of us.
The original max was 197,000 and is now 321,000 each.
Daily max was 180 and now 293.
90 day elimination.
Last edited by hoops777 on Sun Mar 05, 2023 2:23 pm, edited 1 time in total.
K.I.S.S........so easy to say so difficult to do.
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ResearchMed
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Re: Long Term Care Insurance

Post by ResearchMed »

WoW2012 wrote: Sun Mar 05, 2023 1:18 pm The policy with the 180 day elimination period has no death benefit and no cash value. But it does have an unlimited benefit period and inflation protection.

The policy with the "long elimination period" has a death benefit and requires a large lump sum premium up front to fund care during the elimination period. That's why it's more expensive.

You *REALLY* should have included this information ^^ when you wrote:
WoW2012 wrote: Sun Mar 05, 2023 12:34 pm There are policies like that which include a lump sum single premium (which is used to pay for the care during the elimination period) followed by annual premiums to pay for the unlimited long-term care benefits.

However, if you're healthy enough to qualify for a traditional LTCi policy, you can get an unlimited benefit period with a 180-day elimination period FOR LESS THAN a policy with a three-year elimination period and an unlimited benefit period.
It's things like this that can come across, regardless of one's intentions, as being very misleading.
And there was no need to omit the obviously important missing information!

This kind of thing can *really* get people suspicious.
(Yes, that could include me, too. Given that you aren't selling to any of us, even if some might have wanted to discuss it with you, I wonder *why* you omitted that important clarifying information...)

RM
This signature is a placebo. You are in the control group.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

ResearchMed wrote: Sun Mar 05, 2023 2:02 pm
WoW2012 wrote: Sun Mar 05, 2023 1:18 pm The policy with the 180 day elimination period has no death benefit and no cash value. But it does have an unlimited benefit period and inflation protection.

The policy with the "long elimination period" has a death benefit and requires a large lump sum premium up front to fund care during the elimination period. That's why it's more expensive.

You *REALLY* should have included this information ^^ when you wrote:
WoW2012 wrote: Sun Mar 05, 2023 12:34 pm There are policies like that which include a lump sum single premium (which is used to pay for the care during the elimination period) followed by annual premiums to pay for the unlimited long-term care benefits.

However, if you're healthy enough to qualify for a traditional LTCi policy, you can get an unlimited benefit period with a 180-day elimination period FOR LESS THAN a policy with a three-year elimination period and an unlimited benefit period.
It's things like this that can come across, regardless of one's intentions, as being very misleading.
And there was no need to omit the obviously important missing information!

This kind of thing can *really* get people suspicious.
(Yes, that could include me, too. Given that you aren't selling to any of us, even if some might have wanted to discuss it with you, I wonder *why* you omitted that important clarifying information...)

RM

Thank you for the feedback.
This is what happens when I post while I'm out shopping with my wife.
Last edited by WoW2012 on Sun Mar 05, 2023 10:52 pm, edited 1 time in total.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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WoodSpinner
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Re: Long Term Care Insurance

Post by WoodSpinner »

WoW2012 wrote: Sun Mar 05, 2023 12:35 pm
WoodSpinner wrote: Sun Feb 26, 2023 9:23 pm
chassis wrote: Sat Feb 25, 2023 4:26 pm If WoW2012 sells LTC insurance, he/she should recuse him/herself from this thread?

Anyone else agree?
Absolutely NOT!!

He fas done a great job of informing, not SOLICITING.

It’s very valuable insights!

WoodSpinner
Thank you WoodSpinner. You've made my day!

:D
No worries—glad it helped.
WoodSpinner
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WoodSpinner
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Re: Long Term Care Insurance

Post by WoodSpinner »

WoW2012 wrote: Sun Mar 05, 2023 11:55 am
Not everyone can purchase long-term care insurance. You may not be healthy enough to purchase a policy. You should still make a plan. Making a plan for long-term care requires some effort, some research and some serious discussions with those you love and who love you.

Your long-term care plan should answer questions like:
If you can stay at home, who will provide the hands-on care? Who will manage the care? If you can’t stay home, where will you go?
Approximately, how much will your care cost per month? Worst case scenario? Best case scenario?

How will the care be paid for? Income sources? Assets?
Who will be the durable power of attorney and handle the finances?
Who will be the healthcare surrogate and handle healthcare decisions?
Are the advance healthcare directives in place?
First, thank you for the post, I think it’s excellent advice.

I am fortunate enough to have a reasonable LTC policy (at least for now) through CalPers. There have been several premium increases but the costs are still reasonable. My wife OTOH is not insurable due to an existing medical condition. So we have no choice but to plan partial self-funding.

Goal will be home care if at all possible. Which is leading us to plan a move to a house where it will be easier to age in place.

We have the start off a plan but the bolded questions still stump me. I can take a few guesses but suspect the answers will have to change based on life and circumstances. I have reserved a significant lump sum for Aging and LTC expenses. My best guess was 3 year stay at a SNF but it’s a guess at best. Any suggestions for a better approach will be appreciated.

One area that I wonder about is how to find someone with a medical background that can act as a liaison between my family and a medical care team. Hopefully with connections for a care team as needed to help spell family members as needed. Any tips on how to find someone like this?


Thanks

WoodSpinner
WoodSpinner
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

WoodSpinner wrote: Sun Mar 05, 2023 7:21 pm
WoW2012 wrote: Sun Mar 05, 2023 11:55 am
Not everyone can purchase long-term care insurance. You may not be healthy enough to purchase a policy. You should still make a plan. Making a plan for long-term care requires some effort, some research and some serious discussions with those you love and who love you.

Your long-term care plan should answer questions like:
If you can stay at home, who will provide the hands-on care? Who will manage the care? If you can’t stay home, where will you go?
Approximately, how much will your care cost per month? Worst case scenario? Best case scenario?

How will the care be paid for? Income sources? Assets?
Who will be the durable power of attorney and handle the finances?
Who will be the healthcare surrogate and handle healthcare decisions?
Are the advance healthcare directives in place?
First, thank you for the post, I think it’s excellent advice.

I am fortunate enough to have a reasonable LTC policy (at least for now) through CalPers. There have been several premium increases but the costs are still reasonable. My wife OTOH is not insurable due to an existing medical condition. So we have no choice but to plan partial self-funding.

Goal will be home care if at all possible. Which is leading us to plan a move to a house where it will be easier to age in place.

We have the start off a plan but the bolded questions still stump me. I can take a few guesses but suspect the answers will have to change based on life and circumstances. I have reserved a significant lump sum for Aging and LTC expenses. My best guess was 3 year stay at a SNF but it’s a guess at best. Any suggestions for a better approach will be appreciated.

One area that I wonder about is how to find someone with a medical background that can act as a liaison between my family and a medical care team. Hopefully with connections for a care team as needed to help spell family members as needed. Any tips on how to find someone like this?


Thanks

WoodSpinner


Hire an aging life specialist:
https://www.aginglifecare.org//

and contact a large home care agency in your area.
I used Amada:
https://www.amadaseniorcare.com/
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
sc9182
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Re: Long Term Care Insurance

Post by sc9182 »

WoW2012 wrote: Sun Mar 05, 2023 11:02 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am Full 100% (or 200% or worse 300%-400%) of the ever-increasing premiums paid could "STRICTLY GO WASTED/LOST"
Policies sold today will not have the big rate increases older policies had because the policies sold today already include those rate increases in the current pricing. This is true in all 50 states.
Independent sources beg to differ:
Long-Term Care Insurance: Higher Premiums for Shrinking Benefits:
https://www.kiplinger.com/retirement/60 ... g-benefits

Regulators across nation warn of this negative effect too (Sep 9, 2022):
"..another round of rate hikes for long-term care insurance"
.. in line for double- or triple-digit percentage jumps in bills for their long-term care insurance.."
https://richmond.com/news/state-and-reg ... 91816.html


"..premium increases of 80% and even more than 100% are not uncommon.." (Nov 2022)
Now, given how often premiums are raising (and by how much!) and worse-yet RBO to top it off -- NAIC is proposing guidelines/regulations - around how to "announce" such rate hikes (Premium Increase Communication ie., don't have sudden heart-attack, but smart-bleed after seeing such notices)
https://content.naic.org/sites/default/ ... anners.pdf

Got any neutral sites/sources to refer the "prices" are FIXED for good -- because my google research indicates otherwise.
sc9182
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Re: Long Term Care Insurance

Post by sc9182 »

WoW2012 wrote: Sun Mar 05, 2023 11:39 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am (we all know 2008/2009 many insurance/re-insurance Co.s going belly-up ..)
When AIG needed a bailout in the fall of 2008, it was NOT the AIG insurance companies that went "belly up". It was the non-regulated part of the company that sold non-regulated credit default swaps that went "belly up". AIG ended up selling many of its insurance companies (which were all very profitable) in order to pay back to the government all of the "bailout money" plus a profit of about $22 billion.

http://www.cnbc.com/id/100397698
This is STRICT "mis-direction" quote'ing incoherent data-point, the above got nothing to do with failed LTCi insurers/re-insurers ..

Care to enlighten about "Penn Treaty" and "American Network" much ?

Circumstances which led to the insolvency of Penn Treaty among others ?
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ResearchMed
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Re: Long Term Care Insurance

Post by ResearchMed »

sc9182 wrote: Mon Mar 06, 2023 6:59 am
WoW2012 wrote: Sun Mar 05, 2023 11:02 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am Full 100% (or 200% or worse 300%-400%) of the ever-increasing premiums paid could "STRICTLY GO WASTED/LOST"
Policies sold today will not have the big rate increases older policies had because the policies sold today already include those rate increases in the current pricing. This is true in all 50 states.
Independent sources beg to differ:
Long-Term Care Insurance: Higher Premiums for Shrinking Benefits:
https://www.kiplinger.com/retirement/60 ... g-benefits

Regulators across nation warn of this negative effect too (Sep 9, 2022):
"..another round of rate hikes for long-term care insurance"
.. in line for double- or triple-digit percentage jumps in bills for their long-term care insurance.."
https://richmond.com/news/state-and-reg ... 91816.html


"..premium increases of 80% and even more than 100% are not uncommon.." (Nov 2022)
Now, given how often premiums are raising (and by how much!) and worse-yet RBO to top it off -- NAIC is proposing guidelines/regulations - around how to "announce" such rate hikes (Premium Increase Communication ie., don't have sudden heart-attack, but smart-bleed after seeing such notices)
https://content.naic.org/sites/default/ ... anners.pdf

Got any neutral sites/sources to refer the "prices" are FIXED for good -- because my google research indicates otherwise.

At least argue about the statement he *did* make, which was that "Policies sold today will not have the big rate increases older policies had".

Where did he say that "the "prices" are FIXED for good"?

I'm not at all sure how there is any certainty about limited price increases, but I have not looked into that.
Alas, the LTC policy we have was pre-any such arrangement.
Fortunately, it is an Employer-based policy (yes, portable after separation), and they have a very aggressive, employee-friendly HR/benefits group. So this LTC policy is, at least, better than others we've heard about... only vague consolation, however.

RM
This signature is a placebo. You are in the control group.
sc9182
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Re: Long Term Care Insurance

Post by sc9182 »

Last time a bud of mine walked into a shady used-car dealership., the salesperson (cum-owner) showed one clunker - and said, that is such a great car - infact was owned by his brother-in-law ; and when bud walked towards another car - "was owned by his brother-in-law" dialogue came-by once again.

Then, I told my bud - either the salesman was a bit shady, or that he possibly got "too many brother-in-laws" problem ..
WoW2012 wrote: Sun Mar 05, 2023 12:22 pm
3) Even a modest policy can protect a lot of assets. My mother-in-law had about $375,000 of benefits in her policy ..
WoW2012 wrote: Sun Mar 05, 2023 11:55 am
Keep in mind, you don’t know when you may need care or how long you may need care. You can’t assume you’ll need only $1X to pay for your care. Your care may cost $2X or $3X. We all expected my (first) father-in-law to die within a year after he had his stroke. He lived seven and a half years after the stroke...
..
(and/or those loved ones responsible for the care recipient) ..
Sorry - we don't find love on the Net, nor try to find love from "insurance" folks ..
Last edited by sc9182 on Mon Mar 06, 2023 7:34 am, edited 2 times in total.
smitcat
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Re: Long Term Care Insurance

Post by smitcat »

sc9182 wrote: Sat Feb 25, 2023 10:15 am We intend to self-fund/expenses not only LTC needs, but just-about every other needs such as: Medical Tourism (if required), any medical-trials, beta-procedures etc (which may or may-not be covered by Medicare and ilk), Vision/Dental among other things with -- with large Trad IRA portfolio. Good bit of such withdrawals (over AGI 7%) may be currently Tax-deductible.

So -- "One dollar in self-funding costs more than one dollar" (though this may almost make sense, drawing large withdrawals from Trad-IRA makes it almost feel like "Tax-Free"). So, in-a-way it could actually cost "less" than one dollar in our plan.

"One dollar in long-term care insurance benefits nets more than one dollar to the portfolio compared to self-funding" this could be such an "incomplete" statement. What if self, spouse (or kids/disabled family) does NEVER incur LTC costs/needs -- Full 100% (or 200% or worse 300%-400%) of the ever-increasing premiums paid could "STRICTLY GO WASTED/LOST"
WoW2012 wrote: Sat Feb 25, 2023 9:36 am ..
One dollar in self-funding costs more than one dollar.
One dollar in long-term care insurance benefits nets more than one dollar to the portfolio compared to self-funding.
We have a Question:
What if one needs LTC needs - but LTCi pays say "then" 60% of costs -- and the needy party can't come-up with paying the "40%" remainder of the money; obviously, this person can't join CCRC due to "short" on "40%" funding.
Does one LTC insurance Co. send a check for that "60%" it owes ? Guessing the policy won't cover NOTHING (unless you also come up with the 40% shortfall amount from self-funding -- to be able to join CCRC) ?

What happens to party - if the "policy covered" amount exhausted -- say one $250K ? Would the person be kicked out of one CCRC then ?
Are there uniform/national-level guidelines on Guarantees/rights of LTCi policyholders -- which guarantees insurance/re-insurance, and full payment guarantees of amounts owed in 10-20-30-40-50 years later !? (we all know 2008/2009 many insurance/re-insurance Co.s going belly-up ..)

With that many unknowns -- 10,20,30,40,50 years down the line -- we be just happy to self-take-care/self-fund LTC/old-age needs to the best of our ability/financial-ability. Nope - we don't self-insure., we intend to self-fund ..

** we respect whoever buys LTCi, depending on their finances/budgets or Models they have. We are just portraying our mental model, developing (or lack of) landscape, and financial handling of such (and many more additional) needs.

Would you please describe your-self fund LTC plan in much greater detail?
Do your parents have this same self-funded LTC?
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AnnetteLouisan
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Re: Long Term Care Insurance

Post by AnnetteLouisan »

Chardo wrote: Sun Mar 05, 2023 12:37 pm Insurance agents should be encouraged to post, not shunned. Like it or not, they are actual experts on the subject.
Agree. We need more informed information about this vital and opaque subject, not less (as long as they aren’t soliciting).
I was told that taking the larger daily amount but not opting for inflation protection would keep rate increases more stable and I could always accept the future purchase option to keep up with inflation instead. Any merit to this?
Last edited by AnnetteLouisan on Mon Mar 06, 2023 8:01 am, edited 1 time in total.
sc9182
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Re: Long Term Care Insurance

Post by sc9182 »

smitcat wrote: Mon Mar 06, 2023 7:31 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am We intend to self-fund/expenses not only LTC needs, but just-about every other needs such as: Medical Tourism (if required), any medical-trials, beta-procedures etc (which may or may-not be covered by Medicare and ilk), Vision/Dental among other things with -- with large Trad IRA portfolio. Good bit of such withdrawals (over AGI 7%) may be currently Tax-deductible.

So -- "One dollar in self-funding costs more than one dollar" (though this may almost make sense, drawing large withdrawals from Trad-IRA makes it almost feel like "Tax-Free"). So, in-a-way it could actually cost "less" than one dollar in our plan.

"One dollar in long-term care insurance benefits nets more than one dollar to the portfolio compared to self-funding" this could be such an "incomplete" statement. What if self, spouse (or kids/disabled family) does NEVER incur LTC costs/needs -- Full 100% (or 200% or worse 300%-400%) of the ever-increasing premiums paid could "STRICTLY GO WASTED/LOST"
WoW2012 wrote: Sat Feb 25, 2023 9:36 am ..
One dollar in self-funding costs more than one dollar.
One dollar in long-term care insurance benefits nets more than one dollar to the portfolio compared to self-funding.
We have a Question:
What if one needs LTC needs - but LTCi pays say "then" 60% of costs -- and the needy party can't come-up with paying the "40%" remainder of the money; obviously, this person can't join CCRC due to "short" on "40%" funding.
Does one LTC insurance Co. send a check for that "60%" it owes ? Guessing the policy won't cover NOTHING (unless you also come up with the 40% shortfall amount from self-funding -- to be able to join CCRC) ?

What happens to party - if the "policy covered" amount exhausted -- say one $250K ? Would the person be kicked out of one CCRC then ?
Are there uniform/national-level guidelines on Guarantees/rights of LTCi policyholders -- which guarantees insurance/re-insurance, and full payment guarantees of amounts owed in 10-20-30-40-50 years later !? (we all know 2008/2009 many insurance/re-insurance Co.s going belly-up ..)

With that many unknowns -- 10,20,30,40,50 years down the line -- we be just happy to self-take-care/self-fund LTC/old-age needs to the best of our ability/financial-ability. Nope - we don't self-insure., we intend to self-fund ..

** we respect whoever buys LTCi, depending on their finances/budgets or Models they have. We are just portraying our mental model, developing (or lack of) landscape, and financial handling of such (and many more additional) needs.

Would you please describe your-self fund LTC plan in much greater detail?
Do your parents have this same self-funded LTC?
Heh, ought to read first paragraph !?
Freefun
Posts: 1237
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Re: Long Term Care Insurance

Post by Freefun »

sc9182 wrote: Mon Mar 06, 2023 6:59 am
WoW2012 wrote: Sun Mar 05, 2023 11:02 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am Full 100% (or 200% or worse 300%-400%) of the ever-increasing premiums paid could "STRICTLY GO WASTED/LOST"
Policies sold today will not have the big rate increases older policies had because the policies sold today already include those rate increases in the current pricing. This is true in all 50 states.
Independent sources beg to differ:
Long-Term Care Insurance: Higher Premiums for Shrinking Benefits:
https://www.kiplinger.com/retirement/60 ... g-benefits

Regulators across nation warn of this negative effect too (Sep 9, 2022):
"..another round of rate hikes for long-term care insurance"
.. in line for double- or triple-digit percentage jumps in bills for their long-term care insurance.."
https://richmond.com/news/state-and-reg ... 91816.html


"..premium increases of 80% and even more than 100% are not uncommon.." (Nov 2022)
Now, given how often premiums are raising (and by how much!) and worse-yet RBO to top it off -- NAIC is proposing guidelines/regulations - around how to "announce" such rate hikes (Premium Increase Communication ie., don't have sudden heart-attack, but smart-bleed after seeing such notices)
https://content.naic.org/sites/default/ ... anners.pdf

Got any neutral sites/sources to refer the "prices" are FIXED for good -- because my google research indicates otherwise.
I don't understand the articles you cited.

In one article it cites a rate increase from a policy in 2004.

In another, it mentions rate increases with no mention of when the policies originated.

I didn't see anyone say in this thread that rate increases can't or don't happen, rather that policies originating now reflect necessary price increases. Even the articles you cite seem to back this up, since they mention that rate increases frequently are the result of bad data used for original pricing. I'd imagine data points improved significantly.
Remember when you wanted what you currently have?
smitcat
Posts: 13308
Joined: Mon Nov 07, 2016 9:51 am

Re: Long Term Care Insurance

Post by smitcat »

sc9182 wrote: Mon Mar 06, 2023 7:35 am
smitcat wrote: Mon Mar 06, 2023 7:31 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am We intend to self-fund/expenses not only LTC needs, but just-about every other needs such as: Medical Tourism (if required), any medical-trials, beta-procedures etc (which may or may-not be covered by Medicare and ilk), Vision/Dental among other things with -- with large Trad IRA portfolio. Good bit of such withdrawals (over AGI 7%) may be currently Tax-deductible.

So -- "One dollar in self-funding costs more than one dollar" (though this may almost make sense, drawing large withdrawals from Trad-IRA makes it almost feel like "Tax-Free"). So, in-a-way it could actually cost "less" than one dollar in our plan.

"One dollar in long-term care insurance benefits nets more than one dollar to the portfolio compared to self-funding" this could be such an "incomplete" statement. What if self, spouse (or kids/disabled family) does NEVER incur LTC costs/needs -- Full 100% (or 200% or worse 300%-400%) of the ever-increasing premiums paid could "STRICTLY GO WASTED/LOST"
WoW2012 wrote: Sat Feb 25, 2023 9:36 am ..
One dollar in self-funding costs more than one dollar.
One dollar in long-term care insurance benefits nets more than one dollar to the portfolio compared to self-funding.
We have a Question:
What if one needs LTC needs - but LTCi pays say "then" 60% of costs -- and the needy party can't come-up with paying the "40%" remainder of the money; obviously, this person can't join CCRC due to "short" on "40%" funding.
Does one LTC insurance Co. send a check for that "60%" it owes ? Guessing the policy won't cover NOTHING (unless you also come up with the 40% shortfall amount from self-funding -- to be able to join CCRC) ?

What happens to party - if the "policy covered" amount exhausted -- say one $250K ? Would the person be kicked out of one CCRC then ?
Are there uniform/national-level guidelines on Guarantees/rights of LTCi policyholders -- which guarantees insurance/re-insurance, and full payment guarantees of amounts owed in 10-20-30-40-50 years later !? (we all know 2008/2009 many insurance/re-insurance Co.s going belly-up ..)

With that many unknowns -- 10,20,30,40,50 years down the line -- we be just happy to self-take-care/self-fund LTC/old-age needs to the best of our ability/financial-ability. Nope - we don't self-insure., we intend to self-fund ..

** we respect whoever buys LTCi, depending on their finances/budgets or Models they have. We are just portraying our mental model, developing (or lack of) landscape, and financial handling of such (and many more additional) needs.

Would you please describe your-self fund LTC plan in much greater detail?
Do your parents have this same self-funded LTC?
Heh, ought to read first paragraph !?
Are your parents self funding LTC?

In your self-funded LTC plan what are some of the details such as...
- how much are you setting aside for LTC?
- how much per person at various ages? (75, 80, 85 ,etc)
- what AA will your use as some funds are earmarked for LTC?
- how are you planning to maintain those funds in a TIRa at those ages?
Details on how the plan will actually work, it will be very insightful to see how your plan is intended to work.
Silk McCue
Posts: 8954
Joined: Thu Feb 25, 2016 6:11 pm

Re: Long Term Care Insurance

Post by Silk McCue »

sc9182 wrote: Mon Mar 06, 2023 7:26 am Sorry - we don't find love on the Net, nor try to find love from "insurance" folks ..
You clearly have an axe to grind. That comment is completely off the wall and distorts the comment regarding “ and/or those loved ones responsible for the care recipient)”.

I owned a Private Duty Home Health Agency taking care of the elderly in their homes and in facilities. I can tell you that the family members often carry a heavy burden in trying to take care of their loved ones.

Cheers
smitcat
Posts: 13308
Joined: Mon Nov 07, 2016 9:51 am

Re: Long Term Care Insurance

Post by smitcat »

Freefun wrote: Mon Mar 06, 2023 7:39 am
sc9182 wrote: Mon Mar 06, 2023 6:59 am
WoW2012 wrote: Sun Mar 05, 2023 11:02 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am Full 100% (or 200% or worse 300%-400%) of the ever-increasing premiums paid could "STRICTLY GO WASTED/LOST"
Policies sold today will not have the big rate increases older policies had because the policies sold today already include those rate increases in the current pricing. This is true in all 50 states.
Independent sources beg to differ:
Long-Term Care Insurance: Higher Premiums for Shrinking Benefits:
https://www.kiplinger.com/retirement/60 ... g-benefits

Regulators across nation warn of this negative effect too (Sep 9, 2022):
"..another round of rate hikes for long-term care insurance"
.. in line for double- or triple-digit percentage jumps in bills for their long-term care insurance.."
https://richmond.com/news/state-and-reg ... 91816.html


"..premium increases of 80% and even more than 100% are not uncommon.." (Nov 2022)
Now, given how often premiums are raising (and by how much!) and worse-yet RBO to top it off -- NAIC is proposing guidelines/regulations - around how to "announce" such rate hikes (Premium Increase Communication ie., don't have sudden heart-attack, but smart-bleed after seeing such notices)
https://content.naic.org/sites/default/ ... anners.pdf

Got any neutral sites/sources to refer the "prices" are FIXED for good -- because my google research indicates otherwise.
I don't understand the articles you cited.

In one article it cites a rate increase from a policy in 2004.

In another, it mentions rate increases with no mention of when the policies originated.

I didn't see anyone say in this thread that rate increases can't or don't happen, rather that policies originating now reflect necessary price increases. Even the articles you cite seem to back this up, since they mention that rate increases frequently are the result of bad data used for original pricing. I'd imagine data points improved significantly.
"I didn't see anyone say in this thread that rate increases can't or don't happen."
FWIW - we know a number of folks who have known future pricing/costs for LTCi including ourselves. There have been a number of posts on Bogleheads where others have stated the same.
Freefun
Posts: 1237
Joined: Sun Jan 14, 2018 2:55 pm

Re: Long Term Care Insurance

Post by Freefun »

smitcat wrote: Mon Mar 06, 2023 7:43 am
Freefun wrote: Mon Mar 06, 2023 7:39 am
sc9182 wrote: Mon Mar 06, 2023 6:59 am
WoW2012 wrote: Sun Mar 05, 2023 11:02 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am Full 100% (or 200% or worse 300%-400%) of the ever-increasing premiums paid could "STRICTLY GO WASTED/LOST"
Policies sold today will not have the big rate increases older policies had because the policies sold today already include those rate increases in the current pricing. This is true in all 50 states.
Independent sources beg to differ:
Long-Term Care Insurance: Higher Premiums for Shrinking Benefits:
https://www.kiplinger.com/retirement/60 ... g-benefits

Regulators across nation warn of this negative effect too (Sep 9, 2022):
"..another round of rate hikes for long-term care insurance"
.. in line for double- or triple-digit percentage jumps in bills for their long-term care insurance.."
https://richmond.com/news/state-and-reg ... 91816.html


"..premium increases of 80% and even more than 100% are not uncommon.." (Nov 2022)
Now, given how often premiums are raising (and by how much!) and worse-yet RBO to top it off -- NAIC is proposing guidelines/regulations - around how to "announce" such rate hikes (Premium Increase Communication ie., don't have sudden heart-attack, but smart-bleed after seeing such notices)
https://content.naic.org/sites/default/ ... anners.pdf

Got any neutral sites/sources to refer the "prices" are FIXED for good -- because my google research indicates otherwise.
I don't understand the articles you cited.

In one article it cites a rate increase from a policy in 2004.

In another, it mentions rate increases with no mention of when the policies originated.

I didn't see anyone say in this thread that rate increases can't or don't happen, rather that policies originating now reflect necessary price increases. Even the articles you cite seem to back this up, since they mention that rate increases frequently are the result of bad data used for original pricing. I'd imagine data points improved significantly.
"I didn't see anyone say in this thread that rate increases can't or don't happen."
FWIW - we know a number of folks who have known future pricing/costs for LTCi including ourselves. There have been a number of posts on Bogleheads where others have stated the same.
Fair enough however it would be helpful to understand for BH'ers policies that had mentioned increases, when those policies originated.
Remember when you wanted what you currently have?
smitcat
Posts: 13308
Joined: Mon Nov 07, 2016 9:51 am

Re: Long Term Care Insurance

Post by smitcat »

smitcat wrote: Mon Mar 06, 2023 7:43 am
Freefun wrote: Mon Mar 06, 2023 7:39 am
sc9182 wrote: Mon Mar 06, 2023 6:59 am
WoW2012 wrote: Sun Mar 05, 2023 11:02 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am Full 100% (or 200% or worse 300%-400%) of the ever-increasing premiums paid could "STRICTLY GO WASTED/LOST"
Policies sold today will not have the big rate increases older policies had because the policies sold today already include those rate increases in the current pricing. This is true in all 50 states.
Independent sources beg to differ:
Long-Term Care Insurance: Higher Premiums for Shrinking Benefits:
https://www.kiplinger.com/retirement/60 ... g-benefits

Regulators across nation warn of this negative effect too (Sep 9, 2022):
"..another round of rate hikes for long-term care insurance"
.. in line for double- or triple-digit percentage jumps in bills for their long-term care insurance.."
https://richmond.com/news/state-and-reg ... 91816.html


"..premium increases of 80% and even more than 100% are not uncommon.." (Nov 2022)
Now, given how often premiums are raising (and by how much!) and worse-yet RBO to top it off -- NAIC is proposing guidelines/regulations - around how to "announce" such rate hikes (Premium Increase Communication ie., don't have sudden heart-attack, but smart-bleed after seeing such notices)
https://content.naic.org/sites/default/ ... anners.pdf

Got any neutral sites/sources to refer the "prices" are FIXED for good -- because my google research indicates otherwise.
I don't understand the articles you cited.

In one article it cites a rate increase from a policy in 2004.

In another, it mentions rate increases with no mention of when the policies originated.

I didn't see anyone say in this thread that rate increases can't or don't happen, rather that policies originating now reflect necessary price increases. Even the articles you cite seem to back this up, since they mention that rate increases frequently are the result of bad data used for original pricing. I'd imagine data points improved significantly.
"I didn't see anyone say in this thread that rate increases can't or don't happen."
FWIW - we know a number of folks who have known future pricing/costs for LTCi including ourselves. There have been a number of posts on Bogleheads where others have stated the same.
Agreed- it is always good to know as much as you can even about past policies. There have been other posts where folks gave more detail on their policies and increases over time - unfortunately I do not have that link handy.
sc9182
Posts: 2180
Joined: Wed Aug 17, 2016 7:43 pm

Re: Long Term Care Insurance

Post by sc9182 »

Fine with folks who bought, paying-thru for respective LTC policies.
Then again - it seems a "self selection" tilted pool in this page of loving rapid responses.

There may be a saying by someone (is that Clark Howard ?) - neither the rich (is that $3 million+ ?), nor the poor typically need/afford LTCi policies.

Got no axe to grind - just trying to research on what the state of affairs in LTCi field. What used to be 1000+ insurance companies offering LTCi policies now whittled down to about, 10 now !? :oops:

The other day (in a different thread) couple of the current posters (from this thread/page) indicated -- may be I am from/ties-with the Insurance Industry; now -- hearing, I have an axe to grind (against). Loving this ..

Suffice to say that one day we want to strike rich or go broke trying :happy (definitely not helped with LTCi - in either scenarios ..)
Last edited by sc9182 on Mon Mar 06, 2023 8:40 am, edited 2 times in total.
smitcat
Posts: 13308
Joined: Mon Nov 07, 2016 9:51 am

Re: Long Term Care Insurance

Post by smitcat »

sc9182 wrote: Mon Mar 06, 2023 8:21 am Fine with folks who bought, paying-thru for respective LTC policies.
Then again - it seems a "self selection" tilted pool in this page of loving rapid responses.

There may be a saying by someone (is that Clark Howard ?) - neither the rich (is that $3 million+), nor the poor typically need/afford LTCi policies.

Got no axe to grind - just trying to research on what the state of affairs in LTCi field. The other day (in a different thread) couple of the current posters (from this thread/page) indicated -- may be I am from/ties-with the Insurance Industry; now -- hearing, I have an axe to grind (against). Loving this ..

Suffice to say that one day we want to strike rich or go broke trying :happy (definitely not helped with LTCi - in either scenarios ..)
What are these other plans you had posted about?

Are your parents self funding LTC? What is there plan?

In your self-funded LTC plan what are some of the details such as...
- how much are you setting aside for LTC?
- how much per person at various ages? (75, 80, 85 ,etc)
- what AA will your use as some funds are earmarked for LTC?
- how are you planning to maintain those funds in a TIRa at those ages?
Details on how the plan will actually work, it will be very insightful to see how your plan is intended to work.
User avatar
Artful Dodger
Posts: 1952
Joined: Thu Oct 20, 2016 12:56 pm

Re: Long Term Care Insurance

Post by Artful Dodger »

WoW2012 wrote: Sun Mar 05, 2023 11:55 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am we be just happy to self-take-care/self-fund LTC/old-age needs to the best of our ability/financial-ability. Nope - we don't self-insure., we intend to self-fund ..

** we respect whoever buys LTCi, depending on their finances/budgets or Models they have. We are just portraying our mental model, developing (or lack of) landscape, and financial handling of such (and many more additional) needs.

A few thoughts on self-funding:

The WORST way to self-insure for long-term care is to:

Tell yourself
you’re going to
self-insure for
long-term care.

That’s it.

That’s the worst way to self-insure. Many people tell themselves and only themselves their “plan”. They never have a meaningful discussion with the people who mean the most to them.

Here’s something many people don't think about:
When you need care, you won’t be the one making the decisions anymore.
When your health has been compromised and you need help with basic, daily tasks, the people you’ve invited into your life, your dearest loved ones, will be responsible for your care and safety.
They’ll be the ones making the decisions.

If you’ve never shared your plans to self-insure with them, how do you know they will fulfill your wishes? Keep in mind:
Planning for long-term care is not planning for your death.
Planning for long-term care is planning for your quality of life
(should you ever need daily assistance).
Planning for long-term care is planning for your loved ones’ quality of life (should you ever need daily assistance).

Long-term care planning is not about “you” it's about “them” (your loved ones). The purpose of planning for long-term care is to minimize the negative consequences a long-term care event would have on your family's physical, emotional, and financial well-being.

Not everyone can purchase long-term care insurance. You may not be healthy enough to purchase a policy. You should still make a plan. Making a plan for long-term care requires some effort, some research and some serious discussions with those you love and who love you.

Your long-term care plan should answer questions like:
If you can stay at home, who will provide the hands-on care? Who will manage the care? If you can’t stay home, where will you go?
Approximately, how much will your care cost per month? Worst case scenario? Best case scenario?
How will the care be paid for? Income sources? Assets?
Who will be the durable power of attorney and handle the finances?
Who will be the healthcare surrogate and handle healthcare decisions?
Are the advance healthcare directives in place?

Keep in mind, you don’t know when you may need care or how long you may need care. You can’t assume you’ll need only $1X to pay for your care. Your care may cost $2X or $3X. We all expected my (first) father-in-law to die within a year after he had his stroke. He lived seven and a half years after the stroke. We expected his care to cost $1X. It cost $5X, which, in his case, was everything they had ever saved. He spent the last two and a half years of his life on Medicaid.

Therefore, you must make a list of your assets and prioritize them in the order in which they should be liquidated to pay for your care.

Make sure your loved ones understand and are in agreement with the strategy (especially your spouse/partner, if applicable). If you don’t make it clear to your loved ones that you want them to spend the assets to pay for your care, they may decide to sacrifice their own health/career/family to try to "save the 401(k)".

Regardless of when it's addressed, a Long Term Care decision lies in wait for most of us. Better to deal with it sooner, when you have more options, rather than later when it’s a crisis.
Excellent post.
MikeG62
Posts: 5065
Joined: Tue Nov 15, 2016 2:20 pm
Location: New Jersey

Re: Long Term Care Insurance

Post by MikeG62 »

WoW2012 wrote: Sun Mar 05, 2023 11:55 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am we be just happy to self-take-care/self-fund LTC/old-age needs to the best of our ability/financial-ability. Nope - we don't self-insure., we intend to self-fund ..

** we respect whoever buys LTCi, depending on their finances/budgets or Models they have. We are just portraying our mental model, developing (or lack of) landscape, and financial handling of such (and many more additional) needs.

A few thoughts on self-funding:

The WORST way to self-insure for long-term care is to:

Tell yourself
you’re going to
self-insure for
long-term care.

That’s it.

That’s the worst way to self-insure. Many people tell themselves and only themselves their “plan”. They never have a meaningful discussion with the people who mean the most to them.

Here’s something many people don't think about:
When you need care, you won’t be the one making the decisions anymore.
When your health has been compromised and you need help with basic, daily tasks, the people you’ve invited into your life, your dearest loved ones, will be responsible for your care and safety.
They’ll be the ones making the decisions.

If you’ve never shared your plans to self-insure with them, how do you know they will fulfill your wishes? Keep in mind:
Planning for long-term care is not planning for your death.
Planning for long-term care is planning for your quality of life
(should you ever need daily assistance).
Planning for long-term care is planning for your loved ones’ quality of life (should you ever need daily assistance).

Long-term care planning is not about “you” it's about “them” (your loved ones). The purpose of planning for long-term care is to minimize the negative consequences a long-term care event would have on your family's physical, emotional, and financial well-being.

Not everyone can purchase long-term care insurance. You may not be healthy enough to purchase a policy. You should still make a plan. Making a plan for long-term care requires some effort, some research and some serious discussions with those you love and who love you.

Your long-term care plan should answer questions like:
If you can stay at home, who will provide the hands-on care? Who will manage the care? If you can’t stay home, where will you go?
Approximately, how much will your care cost per month? Worst case scenario? Best case scenario?
How will the care be paid for? Income sources? Assets?
Who will be the durable power of attorney and handle the finances?
Who will be the healthcare surrogate and handle healthcare decisions?
Are the advance healthcare directives in place?

Keep in mind, you don’t know when you may need care or how long you may need care. You can’t assume you’ll need only $1X to pay for your care. Your care may cost $2X or $3X. We all expected my (first) father-in-law to die within a year after he had his stroke. He lived seven and a half years after the stroke. We expected his care to cost $1X. It cost $5X, which, in his case, was everything they had ever saved. He spent the last two and a half years of his life on Medicaid.

Therefore, you must make a list of your assets and prioritize them in the order in which they should be liquidated to pay for your care.

Make sure your loved ones understand and are in agreement with the strategy (especially your spouse/partner, if applicable). If you don’t make it clear to your loved ones that you want them to spend the assets to pay for your care, they may decide to sacrifice their own health/career/family to try to "save the 401(k)".

Regardless of when it's addressed, a Long Term Care decision lies in wait for most of us. Better to deal with it sooner, when you have more options, rather than later when it’s a crisis.
There are fair and really good points here. Nothing I say below should detract from that.

However, the statement that "a LTC decision lies in wait for MOST of us" seems an exaggeration. You are the expert here, but really, more than 50% of the population will end up needing LTC?

Beyond that, it will only be a small subset of those people who meet the 2 of 6 ADL's required to qualify for benefits under most policies or have dementia at a level that rises to "severe cognitive impairment". And for those who do, by the time they get there they may well be near the very end of their lives and therefore unlikely to get a lot of value out of all the premiums they've paid.

Sure, there are those who have a stoke or get early onset Alzheimers. But they are very much the exception and not the norm.

This is where I struggle with the decision (the value proposition). Especially for someone who has the resources to self-insure...
Real Knowledge Comes Only From Experience
sc9182
Posts: 2180
Joined: Wed Aug 17, 2016 7:43 pm

Re: Long Term Care Insurance

Post by sc9182 »

MikeG62 wrote: Mon Mar 06, 2023 9:11 am
WoW2012 wrote: Sun Mar 05, 2023 11:55 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am we be just happy to self-take-care/self-fund LTC/old-age needs to the best of our ability/financial-ability. Nope - we don't self-insure., we intend to self-fund ..

** we respect whoever buys LTCi, depending on their finances/budgets or Models they have. We are just portraying our mental model, developing (or lack of) landscape, and financial handling of such (and many more additional) needs.

A few thoughts on self-funding:

The WORST way to self-insure for long-term care is to:

Tell yourself
you’re going to
self-insure for
long-term care.

That’s it.


That’s the worst way to self-insure. Many people tell themselves and only themselves their “plan”. They never have a meaningful discussion with the people who mean the most to them.
..
Regardless of when it's addressed, a Long Term Care decision lies in wait for most of us. Better to deal with it sooner, when you have more options, rather than later when it’s a crisis.
There are fair and really good points here. Nothing I say below should detract from that.

However, the statement that "a LTC decision lies in wait for MOST of us" seems an exaggeration. You are the expert here, but really, more than 50% of the population will end up needing LTC?

Beyond that, it will only be a small subset of those people who meet the 2 of 6 ADL's required to qualify for benefits under most policies or have dementia at a level that rises to "severe cognitive impairment". And for those who do, by the time they get there they may well be near the very end of their lives and therefore unlikely to get a lot of value out of all the premiums they've paid.

Sure, there are those who have a stoke or get early onset Alzheimers. But they are very much the exception and not the norm.

This is where I struggle with the decision (the value proposition). Especially for someone who has the resources to self-insure...
Good points Mike ..

We simply segregate "LTC need (if that)" from managing "money" aspect.

As for other references by WoW2012 -- do we NOT want to pay for Medicare Part-B etc .. those are STRICTLY "irrelevant" to this LTCi discussion (in as much as: your AIG reference -- instead of skipping over highly-relevant Penn & American LTC carrier fiasco).

Also: in-regards to what's-said by WoW2012 "The WORST way to self-insure for long-term care is to:" \\\
we did NOT say, we will self-insure, we mentioned self-fund. With approximately 60% loss ratio (someone post the reference) on LTCi policies -- basically, at-best 60% is going towards care + expenses" and prolly 40% is FAT-profit (and to manage "risk" at pool/aggregate level). We also do not want to "separate" our hard-earned money - with 40%+ overhead ..

We simply have a habit of managing our money, the "BH-way" -- don't need asset managers, nor Insurance Co., managing our money at 40% overheads ..
Last edited by sc9182 on Mon Mar 06, 2023 9:42 am, edited 2 times in total.
User avatar
WoodSpinner
Posts: 3505
Joined: Mon Feb 27, 2017 12:15 pm

Re: Long Term Care Insurance

Post by WoodSpinner »

WoW2012 wrote: Sun Mar 05, 2023 10:55 pm
Hire an aging life specialist:
https://www.aginglifecare.org//

and contact a large home care agency in your area.
I used Amada:
https://www.amadaseniorcare.com/
Thanks for the tips, will check them out.
WoodSpinner
User avatar
WoodSpinner
Posts: 3505
Joined: Mon Feb 27, 2017 12:15 pm

Re: Long Term Care Insurance

Post by WoodSpinner »

smitcat wrote: Mon Mar 06, 2023 7:55 am
smitcat wrote: Mon Mar 06, 2023 7:43 am
Freefun wrote: Mon Mar 06, 2023 7:39 am
sc9182 wrote: Mon Mar 06, 2023 6:59 am
WoW2012 wrote: Sun Mar 05, 2023 11:02 am

Policies sold today will not have the big rate increases older policies had because the policies sold today already include those rate increases in the current pricing. This is true in all 50 states.
Independent sources beg to differ:
Long-Term Care Insurance: Higher Premiums for Shrinking Benefits:
https://www.kiplinger.com/retirement/60 ... g-benefits

Regulators across nation warn of this negative effect too (Sep 9, 2022):
"..another round of rate hikes for long-term care insurance"
.. in line for double- or triple-digit percentage jumps in bills for their long-term care insurance.."
https://richmond.com/news/state-and-reg ... 91816.html


"..premium increases of 80% and even more than 100% are not uncommon.." (Nov 2022)
Now, given how often premiums are raising (and by how much!) and worse-yet RBO to top it off -- NAIC is proposing guidelines/regulations - around how to "announce" such rate hikes (Premium Increase Communication ie., don't have sudden heart-attack, but smart-bleed after seeing such notices)
https://content.naic.org/sites/default/ ... anners.pdf

Got any neutral sites/sources to refer the "prices" are FIXED for good -- because my google research indicates otherwise.
I don't understand the articles you cited.

In one article it cites a rate increase from a policy in 2004.

In another, it mentions rate increases with no mention of when the policies originated.

I didn't see anyone say in this thread that rate increases can't or don't happen, rather that policies originating now reflect necessary price increases. Even the articles you cite seem to back this up, since they mention that rate increases frequently are the result of bad data used for original pricing. I'd imagine data points improved significantly.
"I didn't see anyone say in this thread that rate increases can't or don't happen."
FWIW - we know a number of folks who have known future pricing/costs for LTCi including ourselves. There have been a number of posts on Bogleheads where others have stated the same.
Agreed- it is always good to know as much as you can even about past policies. There have been other posts where folks gave more detail on their policies and increases over time - unfortunately I do not have that link handy.
Here is a thread that I started around my policy and its increase….
viewtopic.php?t=355551

WoodSpinner
WoodSpinner
smitcat
Posts: 13308
Joined: Mon Nov 07, 2016 9:51 am

Re: Long Term Care Insurance

Post by smitcat »

sc9182 wrote: Mon Mar 06, 2023 9:35 am
MikeG62 wrote: Mon Mar 06, 2023 9:11 am
WoW2012 wrote: Sun Mar 05, 2023 11:55 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am we be just happy to self-take-care/self-fund LTC/old-age needs to the best of our ability/financial-ability. Nope - we don't self-insure., we intend to self-fund ..

** we respect whoever buys LTCi, depending on their finances/budgets or Models they have. We are just portraying our mental model, developing (or lack of) landscape, and financial handling of such (and many more additional) needs.

A few thoughts on self-funding:

The WORST way to self-insure for long-term care is to:

Tell yourself
you’re going to
self-insure for
long-term care.

That’s it.


That’s the worst way to self-insure. Many people tell themselves and only themselves their “plan”. They never have a meaningful discussion with the people who mean the most to them.
..
Regardless of when it's addressed, a Long Term Care decision lies in wait for most of us. Better to deal with it sooner, when you have more options, rather than later when it’s a crisis.
There are fair and really good points here. Nothing I say below should detract from that.

However, the statement that "a LTC decision lies in wait for MOST of us" seems an exaggeration. You are the expert here, but really, more than 50% of the population will end up needing LTC?

Beyond that, it will only be a small subset of those people who meet the 2 of 6 ADL's required to qualify for benefits under most policies or have dementia at a level that rises to "severe cognitive impairment". And for those who do, by the time they get there they may well be near the very end of their lives and therefore unlikely to get a lot of value out of all the premiums they've paid.

Sure, there are those who have a stoke or get early onset Alzheimers. But they are very much the exception and not the norm.

This is where I struggle with the decision (the value proposition). Especially for someone who has the resources to self-insure...
Good points Mike ..

We simply segregate "LTC need (if that)" from managing "money" aspect.

As for other references by WoW2012 -- do we NOT want to pay for Medicare Part-B etc .. those are STRICTLY "irrelevant" to this LTCi discussion (in as much as: your AIG reference -- instead of skipping over highly-relevant Penn & American LTC carrier fiasco).

Also: in-regards to what's-said by WoW2012 "The WORST way to self-insure for long-term care is to:" \\\
we did NOT say, we will self-insure, we mentioned self-fund. With approximately 60% loss ratio (someone post the reference) on LTCi policies -- basically, at-best 60% is going towards care + expenses" and prolly 40% is FAT-profit (and to manage "risk" at pool/aggregate level). We also do not want to "separate" our hard-earned money - with 40%+ overhead ..

We simply have a habit of managing our money, the "BH-way" -- don't need asset managers, nor Insurance Co., managing our money at 40% overheads ..
"we did NOT say, we will self-insure, we mentioned self-fund."

It is easy to say that but please help us understand how this self-funding will work.

Are your parents self funding LTC? What is their plan?

In your self-funded LTC plan what are some of the details such as...
- how much are you setting aside for LTC?
- how much per person at various ages? (75, 80, 85 ,etc)
- what AA will your use as some funds are earmarked for LTC?
- how are you planning to maintain those funds in a TIRa at those ages?
Details on how the plan will actually work, it will be very insightful to see how your plan is intended to work.
smitcat
Posts: 13308
Joined: Mon Nov 07, 2016 9:51 am

Re: Long Term Care Insurance

Post by smitcat »

WoodSpinner wrote: Mon Mar 06, 2023 9:49 am
smitcat wrote: Mon Mar 06, 2023 7:55 am
smitcat wrote: Mon Mar 06, 2023 7:43 am
Freefun wrote: Mon Mar 06, 2023 7:39 am
sc9182 wrote: Mon Mar 06, 2023 6:59 am
Independent sources beg to differ:
Long-Term Care Insurance: Higher Premiums for Shrinking Benefits:
https://www.kiplinger.com/retirement/60 ... g-benefits

Regulators across nation warn of this negative effect too (Sep 9, 2022):
"..another round of rate hikes for long-term care insurance"
.. in line for double- or triple-digit percentage jumps in bills for their long-term care insurance.."
https://richmond.com/news/state-and-reg ... 91816.html


"..premium increases of 80% and even more than 100% are not uncommon.." (Nov 2022)
Now, given how often premiums are raising (and by how much!) and worse-yet RBO to top it off -- NAIC is proposing guidelines/regulations - around how to "announce" such rate hikes (Premium Increase Communication ie., don't have sudden heart-attack, but smart-bleed after seeing such notices)
https://content.naic.org/sites/default/ ... anners.pdf

Got any neutral sites/sources to refer the "prices" are FIXED for good -- because my google research indicates otherwise.
I don't understand the articles you cited.

In one article it cites a rate increase from a policy in 2004.

In another, it mentions rate increases with no mention of when the policies originated.

I didn't see anyone say in this thread that rate increases can't or don't happen, rather that policies originating now reflect necessary price increases. Even the articles you cite seem to back this up, since they mention that rate increases frequently are the result of bad data used for original pricing. I'd imagine data points improved significantly.
"I didn't see anyone say in this thread that rate increases can't or don't happen."
FWIW - we know a number of folks who have known future pricing/costs for LTCi including ourselves. There have been a number of posts on Bogleheads where others have stated the same.
Agreed- it is always good to know as much as you can even about past policies. There have been other posts where folks gave more detail on their policies and increases over time - unfortunately I do not have that link handy.
Here is a thread that I started around my policy and its increase….
viewtopic.php?t=355551

WoodSpinner
Thank you !!
sc9182
Posts: 2180
Joined: Wed Aug 17, 2016 7:43 pm

Re: Long Term Care Insurance

Post by sc9182 »

Silk McCue wrote: Mon Mar 06, 2023 7:41 am
sc9182 wrote: Mon Mar 06, 2023 7:26 am Sorry - we don't find love on the Net, nor try to find love from "insurance" folks ..
You clearly have an axe to grind. That comment is completely off the wall and distorts the comment regarding “ and/or those loved ones responsible for the care recipient)”.

I owned a Private Duty Home Health Agency taking care of the elderly in their homes and in facilities. I can tell you that the family members often carry a heavy burden in trying to take care of their loved ones.

Cheers
Thanks for your comment - you sure took care of your clients; I am guessing it is for profit, not charity ..
As for "family members often carry a heavy burden in trying to take care of their loved ones" -- Yes, indeed - but the loved ones care/love primarily originates/remains at home (such love/care extents to out-of-home care locations too)

Nobody said "care" is neither easy, nor cheap. How one "plans/pays" for such care is what we are discussing.

Like I mentioned up-the-thread:

We simply have a habit of managing our money, the "BH-way" -- don't need asset managers, nor Insurance Co., to manage our money with 40% LTC overheads ..
WoW2012
Posts: 1455
Joined: Sun Dec 23, 2012 10:28 am

Re: Long Term Care Insurance

Post by WoW2012 »

sc9182 wrote: Mon Mar 06, 2023 6:59 am
WoW2012 wrote: Sun Mar 05, 2023 11:02 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am Full 100% (or 200% or worse 300%-400%) of the ever-increasing premiums paid could "STRICTLY GO WASTED/LOST"
Policies sold today will not have the big rate increases older policies had because the policies sold today already include those rate increases in the current pricing. This is true in all 50 states.
Independent sources beg to differ:
Long-Term Care Insurance: Higher Premiums for Shrinking Benefits:
https://www.kiplinger.com/retirement/60 ... g-benefits

Regulators across nation warn of this negative effect too (Sep 9, 2022):
"..another round of rate hikes for long-term care insurance"
.. in line for double- or triple-digit percentage jumps in bills for their long-term care insurance.."
https://richmond.com/news/state-and-reg ... 91816.html


"..premium increases of 80% and even more than 100% are not uncommon.." (Nov 2022)
Now, given how often premiums are raising (and by how much!) and worse-yet RBO to top it off -- NAIC is proposing guidelines/regulations - around how to "announce" such rate hikes (Premium Increase Communication ie., don't have sudden heart-attack, but smart-bleed after seeing such notices)
https://content.naic.org/sites/default/ ... anners.pdf

Got any neutral sites/sources to refer the "prices" are FIXED for good -- because my google research indicates otherwise.

Those articles are talking about the old policies, not the new policies.
The old policies have been experiencing large rate increases for the past 9 years or so.
If you google "Rate Stability Regulation" you can learn more about it.
Any policy sold today MUST include all the rate increases from the past.
If you're going to quote me, quote me accurately.
I did not say "prices are fixed for good".
I said, "Policies sold today will not have the big rate increases older policies had because the policies sold today already include those rate increases in the current pricing."
Just google "Rate Stability Regulation" and you'll learn more about it.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
Posts: 1455
Joined: Sun Dec 23, 2012 10:28 am

Re: Long Term Care Insurance

Post by WoW2012 »

sc9182 wrote: Mon Mar 06, 2023 7:16 am
WoW2012 wrote: Sun Mar 05, 2023 11:39 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am (we all know 2008/2009 many insurance/re-insurance Co.s going belly-up ..)
When AIG needed a bailout in the fall of 2008, it was NOT the AIG insurance companies that went "belly up". It was the non-regulated part of the company that sold non-regulated credit default swaps that went "belly up". AIG ended up selling many of its insurance companies (which were all very profitable) in order to pay back to the government all of the "bailout money" plus a profit of about $22 billion.

http://www.cnbc.com/id/100397698
This is STRICT "mis-direction" quote'ing incoherent data-point, the above got nothing to do with failed LTCi insurers/re-insurers ..

Care to enlighten about "Penn Treaty" and "American Network" much ?

Circumstances which led to the insolvency of Penn Treaty among others ?
Penn Treaty ignored LTC insurance industry standards.
Penn Treaty sold policies that ignored federal guidelines.
To qualify for benefits under Penn Treaty's policy, a claimant only needed to require assistance with 2 of 6 Instrumental Activities of Daily Living (IADL's). See charts below.

https://app.box.com/s/slsaz2lx0cekxv7qrs1uk4gj7q7yuwbm


https://app.box.com/s/obds41t4p4ha8lrfga6yspcl7sr0imzl


Image


Image
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
Posts: 1455
Joined: Sun Dec 23, 2012 10:28 am

Re: Long Term Care Insurance

Post by WoW2012 »

sc9182 wrote: Mon Mar 06, 2023 7:26 am Last time a bud of mine walked into a shady used-car dealership., the salesperson (cum-owner) showed one clunker - and said, that is such a great car - infact was owned by his brother-in-law ; and when bud walked towards another car - "was owned by his brother-in-law" dialogue came-by once again.

Then, I told my bud - either the salesman was a bit shady, or that he possibly got "too many brother-in-laws" problem ..
WoW2012 wrote: Sun Mar 05, 2023 12:22 pm
3) Even a modest policy can protect a lot of assets. My mother-in-law had about $375,000 of benefits in her policy ..
WoW2012 wrote: Sun Mar 05, 2023 11:55 am
Keep in mind, you don’t know when you may need care or how long you may need care. You can’t assume you’ll need only $1X to pay for your care. Your care may cost $2X or $3X. We all expected my (first) father-in-law to die within a year after he had his stroke. He lived seven and a half years after the stroke...
..
(and/or those loved ones responsible for the care recipient) ..
Sorry - we don't find love on the Net, nor try to find love from "insurance" folks ..

ad hominem
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
sc9182
Posts: 2180
Joined: Wed Aug 17, 2016 7:43 pm

Re: Long Term Care Insurance

Post by sc9182 »

WoW2012 wrote: Mon Mar 06, 2023 11:31 am
sc9182 wrote: Mon Mar 06, 2023 7:16 am
WoW2012 wrote: Sun Mar 05, 2023 11:39 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am (we all know 2008/2009 many insurance/re-insurance Co.s going belly-up ..)
When AIG needed a bailout in the fall of 2008, it was NOT the AIG insurance companies that went "belly up". It was the non-regulated part of the company that sold non-regulated credit default swaps that went "belly up". AIG ended up selling many of its insurance companies (which were all very profitable) in order to pay back to the government all of the "bailout money" plus a profit of about $22 billion.

http://www.cnbc.com/id/100397698
This is STRICT "mis-direction" quote'ing incoherent data-point, the above got nothing to do with failed LTCi insurers/re-insurers ..

Care to enlighten about "Penn Treaty" and "American Network" much ?

Circumstances which led to the insolvency of Penn Treaty among others ?
Penn Treaty ignored LTC insurance industry standards.
Penn Treaty sold policies that ignored federal guidelines.
To qualify for benefits under Penn Treaty's policy, a claimant only needed to require assistance with 2 of 6 Instrumental Activities of Daily Living (IADL's). See charts below.

https://app.box.com/s/slsaz2lx0cekxv7qrs1uk4gj7q7yuwbm


https://app.box.com/s/obds41t4p4ha8lrfga6yspcl7sr0imzl


Image


Image
Would, or how would, one have known about such failures apriori !? That was the point I earlier raised about - lack of standards and nationwide/uniform regulation (or the lack thereof)

Is there any LTC insurance failure victim fund "pre-funded" by "then" LTC market providers ? Let us know ..
rustwood
Posts: 202
Joined: Mon Jan 17, 2022 2:05 pm

Re: Long Term Care Insurance

Post by rustwood »

I've been trying to find the value in the LTCi options available to my wife and I. We can purchase an annuity that would allow us to get a long term care rider. Roughly speaking, we would put down $120k for the annuity now and pay $1600 a year for a rider which provides an additional 30 months of coverage. The payout would start at ~$4k/month with a compounded inflation adjustment of 3%. The first 30 months of coverage would come out of the annuity, then the rider would kick in for up to 30 additional months. If we never receive any LTC payments, we would receive cash value of the annuity with a return of ~2.5% nominal. We have no specific legacy goals though, so that isn't really a factor for us. The cost of higher levels of coverage would scale more or less linearly.

I am a Maxifi user so I decided to model the benefit of having this coverage vs not having it. Maxifi takes into account tax impacts, inflation, etc, so it is a useful tool, but one needs to make quite a few assumptions. I've tried to model what I think would be the best case scenario for ROI on the coverage. I'll detail how I did that next, but the net result was that was roughly the same whether we get the policy or not. It came out slightly ahead with the annuity, but only by a tiny fraction of our net worth and only when assuming a LTC event that would return the full benefit of the coverage. Interestingly, if we opt for a 60 month rider for $2700/yr, the result is roughly the same but given the same assumptions, we'd be left with an additional 30 months of care benefit available,

My assumptions were as follows:
  • Future investment returns: 1.47% real. I think this is a sufficiently conservative estimate. If we earn more, the model almost certainly tips in favor of self-funding.
  • Duration of LTC: 60 months - to fully utilize the annuity and rider benefit. Of course it is entirely possibly our care needs will be much shorter
  • Cost of LTC: $5700/month, plus a 4% inflation factor (more than the annuity provides). The base amount is the Genworth estimate for assisted living in our area. We may need skilled nursing for some period of time, but this is already enough to max out the coverage.
  • The care recipient will die at the end of the care term and the annual premiums will cease since no additional payouts will be available. That just makes the lifetime modelling a bit cleaner and I can't see how it would impact the issue at hand.
I would be interested in feedback on my approach, but remember I am intentionally trying to optimize it to provide the best-case scenario for this coverage. Of course I included all of the care costs that would be incurred beyond the coverage benefit. I also ran separate projections that assumed the care will be needed by my spouse 10, 20, 30, and 40 years from now. There were small differences, but the result was roughly the same in all cases. That may have been somewhat of a coincidence due to the assumptions that I used though.

Barring a flaw in my assumptions/modelling, it doesn't seem like we are getting much value in terms of risk pooling. Of course if we don't use all of the benefit, then self-funding becomes even more attractive. I have received estimates for similar traditional LTC which appear to be even more costly than this annuity for a reduced benefit term. It would likely be a better value if care was needed within the next 10-20 years though. With that said, we may be getting relatively high quotes because our health status makes us a bad risk - if we are able to squeak by the underwriting.

There is an unlimited rider available for $4200 a year. I can see how that could be a good value to protect against needing many years of care, but given the monthly limit, if we needed 8-10 years of care we'd probably still be in a medicare scenario with the unlimited LTC coverage. Plus, we may well need much more skilled nursing, thus be even more likely to run out of funds. Having the partial coverage might improve our care options though.

I am not against using insurance to mitigate our LTC risk, even if that means that there is a significant chance that the benefit we receive might fall far short of what it costs, but I'd at least like to be able to construct a scenario in which it would work out well for us. I will continue to mull these options and look for new ones, but I am now exploring how to best position us to self-fund LTC (e.g. a significant buffer in cash and cash-adjacent investments, HELOC that could be tapped, discussion with loved ones and a trusted planner).
Last edited by rustwood on Mon Mar 06, 2023 12:48 pm, edited 2 times in total.
WoW2012
Posts: 1455
Joined: Sun Dec 23, 2012 10:28 am

Re: Long Term Care Insurance

Post by WoW2012 »

AnnetteLouisan wrote: Mon Mar 06, 2023 7:34 am
Chardo wrote: Sun Mar 05, 2023 12:37 pm Insurance agents should be encouraged to post, not shunned. Like it or not, they are actual experts on the subject.
Agree. We need more informed information about this vital and opaque subject, not less (as long as they aren’t soliciting).
I was told that taking the larger daily amount but not opting for inflation protection would keep rate increases more stable and I could always accept the future purchase option to keep up with inflation instead. Any merit to this?

If you live in a state that has a long-term care partnership program, that advice is HORRIBLE.
Keep in mind, some companies/agents do NOT sell long-term care partnership policies.
Some agents don't do it because it requires extra training.
Some companies don't sell it because it requires extra bookkeeping and reporting to the state.

The only states that don't have long-term care partnership programs are:
Alaska, Hawaii, Mississippi and Vermont.

Massachusetts has one, but it does not require any type of inflation protection.

If you live in CA, CT, IN or NY, they have partnership programs but they are out-of-date and not worth buying right now.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
Posts: 1455
Joined: Sun Dec 23, 2012 10:28 am

Re: Long Term Care Insurance

Post by WoW2012 »

sc9182 wrote: Mon Mar 06, 2023 8:21 am What used to be 1000+ insurance companies offering LTCi policies now whittled down to about, 10 now !? :oops:
According to the NAIC, there are a little over 170 different insurance companies that have sold long-term care insurance over the years. You can read about the claims experience of the 100 largest on the

"NAIC Long-Term Care Insurance Experience Report"

published annually.

Most of the 170+ companies stopped selling long-term care insurance around 2001 (shortly after the "Rate Stability Regulation" model act was approved by the NAIC.)

Since the Rate Stability Regulation does not allow insurers to price normal profit levels into rate increases, and since the Rate Stability Regulation penalizes the insurance company if they seek a rate increase (by forcing them to lower their profits), that's when most companies decided to stop selling LTCi policies.

The number of companies selling new long-term care insurance policies has fluctuated between 10 and 20 companies for the past 18 years or so.

How many companies manufacture new cars today? There used to be hundreds. Now it's about a dozen?
Does that mean that we should not buy new cars?
Headline in Forbes: "The car industry has failed because only 12 companies still make new cars!"
Or does that mean that the companies that stopped manufacturing cars were not as good as the companies that survived. The ones still doing it are the ones who know how to do it and can create a good product at a reasonable price.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
hoops777
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Re: Long Term Care Insurance

Post by hoops777 »

So are you saying Calif partnership policies like ours that we bought 10 years ago from Genworth are out of date and not worth having, or just the new ones?
K.I.S.S........so easy to say so difficult to do.
WoW2012
Posts: 1455
Joined: Sun Dec 23, 2012 10:28 am

Re: Long Term Care Insurance

Post by WoW2012 »

Artful Dodger wrote: Mon Mar 06, 2023 8:48 am
WoW2012 wrote: Sun Mar 05, 2023 11:55 am
sc9182 wrote: Sat Feb 25, 2023 10:15 am we be just happy to self-take-care/self-fund LTC/old-age needs to the best of our ability/financial-ability. Nope - we don't self-insure., we intend to self-fund ..

** we respect whoever buys LTCi, depending on their finances/budgets or Models they have. We are just portraying our mental model, developing (or lack of) landscape, and financial handling of such (and many more additional) needs.

A few thoughts on self-funding:

The WORST way to self-insure for long-term care is to:

Tell yourself
you’re going to
self-insure for
long-term care.

That’s it.

That’s the worst way to self-insure. Many people tell themselves and only themselves their “plan”. They never have a meaningful discussion with the people who mean the most to them.

Here’s something many people don't think about:
When you need care, you won’t be the one making the decisions anymore.
When your health has been compromised and you need help with basic, daily tasks, the people you’ve invited into your life, your dearest loved ones, will be responsible for your care and safety.
They’ll be the ones making the decisions.

If you’ve never shared your plans to self-insure with them, how do you know they will fulfill your wishes? Keep in mind:
Planning for long-term care is not planning for your death.
Planning for long-term care is planning for your quality of life
(should you ever need daily assistance).
Planning for long-term care is planning for your loved ones’ quality of life (should you ever need daily assistance).

Long-term care planning is not about “you” it's about “them” (your loved ones). The purpose of planning for long-term care is to minimize the negative consequences a long-term care event would have on your family's physical, emotional, and financial well-being.

Not everyone can purchase long-term care insurance. You may not be healthy enough to purchase a policy. You should still make a plan. Making a plan for long-term care requires some effort, some research and some serious discussions with those you love and who love you.

Your long-term care plan should answer questions like:
If you can stay at home, who will provide the hands-on care? Who will manage the care? If you can’t stay home, where will you go?
Approximately, how much will your care cost per month? Worst case scenario? Best case scenario?
How will the care be paid for? Income sources? Assets?
Who will be the durable power of attorney and handle the finances?
Who will be the healthcare surrogate and handle healthcare decisions?
Are the advance healthcare directives in place?

Keep in mind, you don’t know when you may need care or how long you may need care. You can’t assume you’ll need only $1X to pay for your care. Your care may cost $2X or $3X. We all expected my (first) father-in-law to die within a year after he had his stroke. He lived seven and a half years after the stroke. We expected his care to cost $1X. It cost $5X, which, in his case, was everything they had ever saved. He spent the last two and a half years of his life on Medicaid.

Therefore, you must make a list of your assets and prioritize them in the order in which they should be liquidated to pay for your care.

Make sure your loved ones understand and are in agreement with the strategy (especially your spouse/partner, if applicable). If you don’t make it clear to your loved ones that you want them to spend the assets to pay for your care, they may decide to sacrifice their own health/career/family to try to "save the 401(k)".

Regardless of when it's addressed, a Long Term Care decision lies in wait for most of us. Better to deal with it sooner, when you have more options, rather than later when it’s a crisis.
Excellent post.

You made my day!
Thank you for the encouragement!

Have a beer on me: :beer
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
Posts: 1455
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Re: Long Term Care Insurance

Post by WoW2012 »

MikeG62 wrote: Mon Mar 06, 2023 9:11 am
There are fair and really good points here. Nothing I say below should detract from that.

However, the statement that "a LTC decision lies in wait for MOST of us" seems an exaggeration. You are the expert here, but really, more than 50% of the population will end up needing LTC?

Beyond that, it will only be a small subset of those people who meet the 2 of 6 ADL's required to qualify for benefits under most policies or have dementia at a level that rises to "severe cognitive impairment". And for those who do, by the time they get there they may well be near the very end of their lives and therefore unlikely to get a lot of value out of all the premiums they've paid.

Sure, there are those who have a stoke or get early onset Alzheimers. But they are very much the exception and not the norm.

This is where I struggle with the decision (the value proposition). Especially for someone who has the resources to self-insure...
Excellent points!
I agree with you.

I think it's reasonable to conclude that 50% of retirees will need some form of long-term care. Even if it ends up being only a short period of care (6 months or less), having a plan in place, in advance, (not just long-term care insurance, but a long-term care plan) is still beneficial to the care recipient and his/her loved ones.

And, to clarify, I am NOT saying that 50% of LTCi policyholders will draw benefits from their policy. If that were true, it would not be an insurable risk.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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ResearchMed
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Re: Long Term Care Insurance

Post by ResearchMed »

WoW2012 wrote: Mon Mar 06, 2023 12:03 pm Have a beer on me:

Heh. We have no way to send you the bill! :wink:

hoops777 wrote: Mon Mar 06, 2023 12:02 pm So are you saying Calif partnership policies like ours that we bought 10 years ago from Genworth are out of date and not worth having, or just the new ones?

Same question for all the states you mentioned and also MA.

I assume there's no way to capture that partnership later?

And "later", one wouldn't still qualify for coverage, as aging sets in, etc.

Thanks very much!

RM
This signature is a placebo. You are in the control group.
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AnnetteLouisan
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Re: Long Term Care Insurance

Post by AnnetteLouisan »

ResearchMed wrote: Mon Mar 06, 2023 12:13 pm
WoW2012 wrote: Mon Mar 06, 2023 12:03 pm Have a beer on me:

Heh. We have no way to send you the bill! :wink:

hoops777 wrote: Mon Mar 06, 2023 12:02 pm So are you saying Calif partnership policies like ours that we bought 10 years ago from Genworth are out of date and not worth having, or just the new ones?

Same question for all the states you mentioned and also MA.

I assume there's no way to capture that partnership later?

And "later", one wouldn't still qualify for coverage, as aging sets in, etc.

Thanks very much!

RM
Similar here: NY, over ten years ago, good insurer, group policy.
WoW2012
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Re: Long Term Care Insurance

Post by WoW2012 »

sc9182 wrote: Mon Mar 06, 2023 11:39 am
WoW2012 wrote: Mon Mar 06, 2023 11:31 am
Penn Treaty ignored LTC insurance industry standards.
Penn Treaty sold policies that ignored federal guidelines.
To qualify for benefits under Penn Treaty's policy, a claimant only needed to require assistance with 2 of 6 Instrumental Activities of Daily Living (IADL's). See charts below.

https://app.box.com/s/slsaz2lx0cekxv7qrs1uk4gj7q7yuwbm


https://app.box.com/s/obds41t4p4ha8lrfga6yspcl7sr0imzl


Image


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Would, or how would, one have known about such failures apriori !? That was the point I earlier raised about - lack of standards and nationwide/uniform regulation (or the lack thereof)

Is there any LTC insurance failure victim fund "pre-funded" by "then" LTC market providers ? Let us know ..
sc9: ...how would, one have known about such failures apriori !?
wow: First off, their financial ratings were never very good. They always had below average financial ratings. Second, shop around. Do a little homework. If a policy that pays benefits if someone needs help with cooking and cleaning is 30% LESS premium than a policy that pays benefits if someone needs help with bathing and dress, the policy doesn't pass the sniff test. That's why I didn't sell the Penn Treaty policy. Consumers asked me to sell it to them and I refused because I knew what would happen.

sc9: That was the point I earlier raised about - lack of standards and nationwide/uniform regulation (or the lack thereof)
wow: There are industry standards and federal standards. Penn Treaty ignored them. The federal standards were created in 1996. In 1997 Penn Treaty intentionally created a policy that did NOT meet the federal standards.

Just because Yugo made lousy cars doesn't mean Toyota makes lousy cars.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
Posts: 1455
Joined: Sun Dec 23, 2012 10:28 am

Re: Long Term Care Insurance

Post by WoW2012 »

hoops777 wrote: Mon Mar 06, 2023 12:02 pm So are you saying Calif partnership policies like ours that we bought 10 years ago from Genworth are out of date and not worth having, or just the new ones?
Your policy is great.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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