Long term care insurance
We are big fans of long term care insurance. My wife and I each have two policies. Just wondering what others are doing. Our agent tells us not many people are walking in and buying this stuff.
i feel long term ins is important and am currently considering purchasing!
about 1 year ago
I to am a fan, but have not been able to obtain it. In 1999 I had an operation for AVN of the hips. I had surgery on the left hip and the doctors expected to have to do the same surgery on the right hip within three months. However, it has not been necessary in the past seven years! Yet, I 've been turned down for long term care insurance from several companies. I believe it is a very important security to have, but can't get it.
about 1 year ago
Luckily the company I worked for had a long term care insurance option available in which I didn't need to medically qualify. My spouse did need to complete a medical questionaire and qualify though. Our credit union financial group had a seminar on long term care just after the policy became available describing the best policy options.
Long term care insurance is for people with median savings in the $200K to $1M.
People below this threshold will quickly lose their savings to the nursing home and go on Medicaid and people above this threshold can usually self insure.
Long term care insurance is for people with median savings in the $200K to $1M.
People below this threshold will quickly lose their savings to the nursing home and go on Medicaid and people above this threshold can usually self insure.
about 1 year ago
I kid you not, a friend of mine bought the long term care insurance and within a year had a stroke. For her first two months home, it *paid* her granddaughter to care for her in her own home and then paid an agency for someone to come in a few hours every day. It lasted for a few years until the maximum was reached, but she was able to enjoy those previous years in her own home. I can't say enough good about long term care!
about 1 year ago
I'm 59 and will be 60 soon. My government health benefits plan offers long term care insurance through Prudential. Seems like pretty good coverage but would cost approximately $318 a month even though its under a group. When I ordered the application, it came with the 62 page Shoppers Guide to Long Term Care Insurance published by the National Association of Insurance Commissioners.
I highly recommend that anyone thinking about long term care insurance (LTCI) get this guide. I believe it is available online as well. It contains questions and worksheets to help you determine if LTCI is right for you. Questions asked are: how much your assets, not counting your home, are worth, up to $50,000, do you plan to pay for long term care soley from your income or tap your savings to help, do you expect your income to increase or decrease and would you be able to afford say a 20% increase in premiums? I haven't completed the application yet, but I'm hoping when I do, I get accepted. I want to have the options of having at home care, care at an adult day care center, a fine nursing home or assistant living facility. My doctor says the latter is really becoming popular but can be expensive so he agreed that LTCI was a good idea for me. Also, I feel that it may not be necessary to have $200,000 in savings as someone posted. I believe that depending on Medicaid will restrict one's personal and financial choices as well as facilities in which one could reside. I'm willing to spend 4% of my income and assets to save the other 96%. I hope this helps everyone considering LTC.
I highly recommend that anyone thinking about long term care insurance (LTCI) get this guide. I believe it is available online as well. It contains questions and worksheets to help you determine if LTCI is right for you. Questions asked are: how much your assets, not counting your home, are worth, up to $50,000, do you plan to pay for long term care soley from your income or tap your savings to help, do you expect your income to increase or decrease and would you be able to afford say a 20% increase in premiums? I haven't completed the application yet, but I'm hoping when I do, I get accepted. I want to have the options of having at home care, care at an adult day care center, a fine nursing home or assistant living facility. My doctor says the latter is really becoming popular but can be expensive so he agreed that LTCI was a good idea for me. Also, I feel that it may not be necessary to have $200,000 in savings as someone posted. I believe that depending on Medicaid will restrict one's personal and financial choices as well as facilities in which one could reside. I'm willing to spend 4% of my income and assets to save the other 96%. I hope this helps everyone considering LTC.
about 1 year ago
Hi. Please don't think that I am telling anyone not to buy LTCI, but I have done some research and here's some things that I think people should consider....
LTC is expensive and just who needs to purchase this insurance is debatable. The rule of thumb seems to be 'the richer you are the less you need a policy, and the poorer you are the sillier it is to pay for insurance you can't afford to pay for something that likely you will not need...or benefits you may well not get even get if you do end up in assisted living'.
Point one: LTC policies are a little better than they used to be (Alzheimer's wasn't even covered). But even today many people living in assisted living facilities do not qualify for benefits. You have to be in really bad shape to get benefits. And how long does the average person linger on in really bad shape?
Point two: How long do you have to wait for benefits to kick in if you are in really bad shape? A month? 100 days? Are you dead yet?
Point three: The affluent probably don't need LTC insurance. Even if they end up in a nursing home for a long period, which is unlikely, their annual income will probably cover the costs. Living expenses are redirected. Social Security and other income (pensions, investments) will pay most or all costs. Proceeds of real estate sales should be considered. Paying $50,000 - $75,000 a year is very probably not a problem to 'pay as you-go' for people that are well situated in retirement. No need for insurance. Even if my husband and I both become completely unable to care for ourselves and end up in a nursing home (and most times it's a widow that ends up in assisted living, not both husband and wife) we would have no trouble at all paying $150,000 for many years (his pension, selling 2 homes, our investments, social security, no other living expenses).
Point four: Your insurance salesman has intensive training on just how to scare/guilt you into buying something that will make him a nice profit, so don't fall for the hard sell.
Point five: Let's say someone 55 hears the insurance salesman's horror stories about ending up in a slummy nursing home but decides not to buy a policy. Instead they invest the amount of the annual premium and by age 75 have about $50,000. Enough for months of good care. But hardly anyone 75 needs this care, so let's assume the person stops adding to the investments at 75, but the money grows. At 85, the person would have almost $100,000. That's a nice amount, in addition to social security, other investments, a pension, proceeds from a house or condo when long term care is finally needed. And odds are it won't be. Or the person won't qualify for benefits. And then all that money hasn't been spent in premiums is available.
If you are very clever you can now see how there could well be cases when the cost of LTC insurance might even make assisted living unaffordable.
Of course there's much more.
Premium increases!!!!!
And inflation!!
And amount of coverage!!
And deductables!!
And fraud!!!
And how policies are dropped!!
This is just a taste of the other side of the coin.
And if you decide to buy it, it goes without saying that you should find someone that will compare ALL policies and find one that is in YOUR BEST INTEREST.
Reading:
view link
view link
view link
Again, I'm not saying don't buy LTCI. I'm just saying understand exactly what you are buying and why you are buying it.
(Note: some of what I have said above is based on the excellent book 'Get a Life: You Don't Need a Mllion to Retire Well'.)
And if you made it through this long post...wow and thanks!!
LTC is expensive and just who needs to purchase this insurance is debatable. The rule of thumb seems to be 'the richer you are the less you need a policy, and the poorer you are the sillier it is to pay for insurance you can't afford to pay for something that likely you will not need...or benefits you may well not get even get if you do end up in assisted living'.
Point one: LTC policies are a little better than they used to be (Alzheimer's wasn't even covered). But even today many people living in assisted living facilities do not qualify for benefits. You have to be in really bad shape to get benefits. And how long does the average person linger on in really bad shape?
Point two: How long do you have to wait for benefits to kick in if you are in really bad shape? A month? 100 days? Are you dead yet?
Point three: The affluent probably don't need LTC insurance. Even if they end up in a nursing home for a long period, which is unlikely, their annual income will probably cover the costs. Living expenses are redirected. Social Security and other income (pensions, investments) will pay most or all costs. Proceeds of real estate sales should be considered. Paying $50,000 - $75,000 a year is very probably not a problem to 'pay as you-go' for people that are well situated in retirement. No need for insurance. Even if my husband and I both become completely unable to care for ourselves and end up in a nursing home (and most times it's a widow that ends up in assisted living, not both husband and wife) we would have no trouble at all paying $150,000 for many years (his pension, selling 2 homes, our investments, social security, no other living expenses).
Point four: Your insurance salesman has intensive training on just how to scare/guilt you into buying something that will make him a nice profit, so don't fall for the hard sell.
Point five: Let's say someone 55 hears the insurance salesman's horror stories about ending up in a slummy nursing home but decides not to buy a policy. Instead they invest the amount of the annual premium and by age 75 have about $50,000. Enough for months of good care. But hardly anyone 75 needs this care, so let's assume the person stops adding to the investments at 75, but the money grows. At 85, the person would have almost $100,000. That's a nice amount, in addition to social security, other investments, a pension, proceeds from a house or condo when long term care is finally needed. And odds are it won't be. Or the person won't qualify for benefits. And then all that money hasn't been spent in premiums is available.
If you are very clever you can now see how there could well be cases when the cost of LTC insurance might even make assisted living unaffordable.
Of course there's much more.
Premium increases!!!!!
And inflation!!
And amount of coverage!!
And deductables!!
And fraud!!!
And how policies are dropped!!
This is just a taste of the other side of the coin.
And if you decide to buy it, it goes without saying that you should find someone that will compare ALL policies and find one that is in YOUR BEST INTEREST.
Reading:
view link
view link
view link
Again, I'm not saying don't buy LTCI. I'm just saying understand exactly what you are buying and why you are buying it.
(Note: some of what I have said above is based on the excellent book 'Get a Life: You Don't Need a Mllion to Retire Well'.)
And if you made it through this long post...wow and thanks!!
about 1 year ago
I agree with post #6.
The expense of an LTC policy is indeed quite a burdon. One issue that was not addressed in #6 is the fact that LTC policies are over-priced because insurance companies do not have sufficient claims experience with these kind of contracts as they have only been around for 25-30 years and relatively few claims have been submitted or paid.
Who cares you ask? Well insurance companies have to make money and the premium rates that they charge have a huge amount of "wiggle room" to insure that they collect enough money from the customer in order to (1) pay the agent his commission, (2) cover the administrative costs of the policy over a long term, (3) establish a pool of money in order to pay for future claims, and (4) make a profit.
They pretty-much know how the accurately figure out how to much to charge for #s 1,2, and 4, but #3 requires a good bit of guess work so they all build in excess charges in this part of the pricing in hopes that it is enough.
They do not have this problem with life insurance as they have millions of past claims (100 years +) and can accurately predict how many of us will die.
I would much rather self insure this part of my personal risk management program.
The expense of an LTC policy is indeed quite a burdon. One issue that was not addressed in #6 is the fact that LTC policies are over-priced because insurance companies do not have sufficient claims experience with these kind of contracts as they have only been around for 25-30 years and relatively few claims have been submitted or paid.
Who cares you ask? Well insurance companies have to make money and the premium rates that they charge have a huge amount of "wiggle room" to insure that they collect enough money from the customer in order to (1) pay the agent his commission, (2) cover the administrative costs of the policy over a long term, (3) establish a pool of money in order to pay for future claims, and (4) make a profit.
They pretty-much know how the accurately figure out how to much to charge for #s 1,2, and 4, but #3 requires a good bit of guess work so they all build in excess charges in this part of the pricing in hopes that it is enough.
They do not have this problem with life insurance as they have millions of past claims (100 years +) and can accurately predict how many of us will die.
I would much rather self insure this part of my personal risk management program.
about 1 year ago
"One issue that was not addressed in #6 is the fact that LTC policies are over-priced because insurance companies do not have sufficient claims experience with these kind of contracts as they have only been around for 25-30 years and relatively few claims have been submitted or paid."
Mike, I think you and I will become great friends!!
OK, your reasoning is right but your conclusion might be wrong. It seems that policies are UNDERpriced. Premiums can (and do) skyrocket. They can't raise rates on individuals, but they can impose a general rate increase.
view link
I read somewhere that an elderly person had their premium increased by 700%. Here is thie link (google is wonderful):
view link
Mike, I think you and I will become great friends!!
OK, your reasoning is right but your conclusion might be wrong. It seems that policies are UNDERpriced. Premiums can (and do) skyrocket. They can't raise rates on individuals, but they can impose a general rate increase.
view link
I read somewhere that an elderly person had their premium increased by 700%. Here is thie link (google is wonderful):
view link
about 1 year ago
I have had a problem with getting long term care. They say because I am Bi-Polar it will be hard to get. Any one else with an idea of a company who is a little nicer than the one with AARP.
10 months ago
"Our agent tells us not many people are walking in and buying this stuff."
LOL...Sounds like your agent is making you part of his/her marketing plan.
LTC is one of the most expensive and least understood kinds of insurance that you can buy IMHO. I used to sell it by the truck load and folk's really did not know what the heck they were paying for. Usually Mrs. Prospect wanted to buy so that she would not be strapped down looking after the much older Mr. Prospect is their old age.
If you can self-insure, do it and save a bunch!
LOL...Sounds like your agent is making you part of his/her marketing plan.
LTC is one of the most expensive and least understood kinds of insurance that you can buy IMHO. I used to sell it by the truck load and folk's really did not know what the heck they were paying for. Usually Mrs. Prospect wanted to buy so that she would not be strapped down looking after the much older Mr. Prospect is their old age.
If you can self-insure, do it and save a bunch!
10 months ago
