Thoughts on Long Term Care Insurance

[dragonfly]

Hello All! L-o-o-o-o-o-o-n-g time lurker here with my first post.

My company is offering a life insurance/long term care policy of $10,000. The amount doubles to $20,000 if used for LTC, or pays $10,000 to your beneficiary(s) if not used. They are paying the premium on this base policy.  We can also buy additional coverage. I'm thinking of buying up to $40,000 which would equal $100,000 in LTC benefits (the company's $10,000 + my $40,000 x 2). Based on my age - 61 - the buy up premium is $140.00/month. I can take the policy with me when I leave, but would have to pick up the company's premium of about $35.00/month so $175.00/month total.

What are your thoughts on LTC policies? Are they worth the cost? I am not married and my daughter lives out of state and is unlikely to return to her home time to care for me in the event it is needed as she and her husband are military. Any one have experience with LTC?   Any input, pros/cons or horror stories is greatly appreciated.

[swamp]

Hi.  Welcome. 

Considering nursing home care is about $10k a month now, you aren't buying much coverage. 

My thoughts on paying for a nursing home:     meh, that's what I saved for.    If I run out of money, that's what medicaid is for. 

[Deleted]

I don't see the point of getting it if you're not married.  It's not like you're going to burn through the retirement nest egg and leave a spouse poor.  If you have enough money to get into a decent place and run out of money, they won't kick you out. 

[happyhoix]

Having watched my mom linger for five years in an assisted living home as she sank into dementia, I've decided to make certain I don't end up that way, so I won't need LTC.

I heard though, some years back, that you're better off taking the amount of money you would spend for the LTC policy and make a monthly deposit into some kind of savings vehicle starting at an early age. Then, if you needed the LTC, you would have that money saved back, and if not, that money would go to your heirs.

 

[swamp]

Apr 8, 2019 13:41:20 GMT -5 minnesotapaintlady said:

I don't see the point of getting it if you're not married.  It's not like you're going to burn through the retirement nest egg and leave a spouse poor.  If you have enough money to get into a decent place and run out of money, they won't kick you out. 

[hoops902]

One question in terms of insurance should always be "who are you protecting?".  If you were married, the answer would be "I'm protecting my spouse from spending all that money on my care and being left destitute" (which may not be accurate based on the amounts the insurance pays out, but in theory, that's who you are protecting).  As it stands, nobody is responsible for your debts/spending but you, so are you protecting yourself?  Not likely, since the amount is minimal and you're unlikely to come out just fine on the other side to enjoy your money.  I wouldn't get the insurance.

[dragonfly]

Unfortunately, as a long-time single parent, my retirement nest egg isn't where it should be so burning through it at a long-term care facility is a possibility.  Also, apparently they can kick you out.  If your money and insurance run out and you need to go on Medicaid, not all places accept Medicaid and you would need to find someplace that does.  So in that instance I would be protecting myself.  However, as Swamp stated above, between my social security, nest egg and $100,000 in LTC coverage, that might not keep me anywhere for long. 

 

[hoops902]

Apr 8, 2019 14:21:39 GMT -5 dragonfly said:

Unfortunately, as a long-time single parent, my retirement nest egg isn't where it should be so burning through it at a long-term care facility is a possibility.  Also, apparently they can kick you out.  If your money and insurance run out and you need to go on Medicaid, not all places accept Medicaid and you would need to find someplace that does.  So in that instance I would be protecting myself.  However, as Swamp stated above, between my social security, nest egg and $100,000 in LTC coverage, that might not keep me anywhere for long. 

 

If your nest egg isn't great, they're going to want to know your assets ahead of time, so they're going to know it.  You're not likely to get into anywhere appreciably better with 100K of LTC than you are without (you'll either get in somewhere that won't kick you out anyways, or the places that will kick you out aren't likely to let you in without significant assets to begin with).  

[Deleted]

One of the problems with LTC is whether you can afford it after you retire.  Will this insurance always be $175 a month, or does it rise as you get older?  Have they been gradually raising the premium, a necessity because the cost of care rises.  If they don't, it can mean a huge increase all of a sudden.  Does the company have a good rating so that you can be pretty sure they will still be around if/when you do need it?  Insurance companies can go out of business and leave you with nothing.

I think LTC is a crap shoot these days.  I looked at it and thought, "Do I want to save more money (in my case $275 a month for better coverage than you describe) towards my retirement, or do I want to make sure I live in a 'nice enough' nursing home someday?"  I chose retirement. 

When I do get to the nursing home, I don't want to stay long.

[Deleted]

I haven't bought LTC for some of the reasons already cited:  premiums can go up (or you can be forced to accept lower coverage in return for no premium changes), no spouse I need to protect, that's what my savings are for.  In my case, with no spouse. if I enter LTC my house gets sold, my car, travel, utilities and most other expenses go to zero (so all my income can pay for LTC).  Another concern is that sometimes coverage might not kick in when you want it to;  some LTC covers in-home assistance but the insurer gets to define when you're eligible (a function of what "activities of daily living" you can and cannot do) and what it covers.  I can see the possibility of a period when I might not need full-time care in a facility but could use someone to come to the house, help me bathe, prepare meals, etc.  (Ugh.   Not a nice picture but I have to be realistic.)  Also not sure how it helps in an "interim" place such as the Assisted Living facility where my 88-year old Dad lives.  He has his own unit but the fees include cleaning, repairs, yard work and meals in a central facility in the fees. 

So- I'm hanging onto my money to maintain flexibility.

I'm also wary of hybrid policies such as you describe.  While they have the advantage of paying off even if you don't need LTC, in my opinion if you need life insurance you should buy life insurance and not mix it with LTC.

Oh, and just to muddy the waters:  the policy you describe would have one advantage.  If it's guaranteed renewable as long as you pay your premiums, it does have the advantage of locking in your coverage now.  If you develop conditions down the road that would make other companies reluctant to insure you, you'd have this coverage. 


 

[Deleted]

I posted this before and still find it true:

They are all written backwards in my opinion. Every LTC policy will pay up to $X/mo to a maximum of $Y.

It makes no sense. I can afford $X/mo until $Y. What I need is something to cover when I exceed $X/mo or $Y. And telling me 98% (or whatever high number they state) of people don't exceed the 5 years (with median being 2 years), I would think the 2 people that exceeded that really want a policy that doesn't kick them to the street.

After that you have to add all the exclusions and rules to get the benefit, I think I will take the risk, invest myself and probably have better funding than the "fake" feeling of safety they try to sell.

[dannylion]

Apr 8, 2019 18:19:35 GMT -5 @logicnow said:

I posted this before and still find it true:

They are all written backwards in my opinion. Every LTC policy will pay up to $X/mo to a maximum of $Y.

It makes no sense. I can afford $X/mo until $Y. What I need is something to cover when I exceed $X/mo or $Y. And telling me 98% (or whatever high number they state) of people don't exceed the 5 years (with median being 2 years), I would think the 2 people that exceeded that really want a policy that doesn't kick them to the street.

After that you have to add all the exclusions and rules to get the benefit, I think I will take the risk, invest myself and probably have better funding than the "fake" feeling of safety they try to sell.

That was my decision when I was considering LTC insurance many years ago.  I am fortunate to have a substantial pension, so I focused on investing with the goal of achieving a level of retirement income that would allow me to cash-flow whatever level of care I might require.  If I had a spouse or dependents, I might have made a different choice, but having only myself to consider, I am comfortable with my decision not to pursue LTC insurance.  Some friends who opted for the LTCI have seen their premiums increase and their benefits reduced and have expressed concern about whether their "investment" will prove to have been the right choice.  

[jelloshots4all]

I have no answers.

I went to visit a 74 yr old friend whom suffered a severe stroke 4 weeks ago.  I know he had good union coverage insurance, but it didn't cover the hospital they originally took him too.  They had to move him to a rehab facility that took his insurance.

It was a nice, clean facility, but I wondered about his quality of care?  I don't know his specific diagnosis except from his son.  It was heart breaking to see him today.  

I agree with happy.  And will tell my kids the same.  My money should not be spent on LTC.  Throw a party, get me drunk, slip me some strong drugs and say goodbye on my terms!!

[nittanycheme]

My DH and I have been considering a LTC policy.  However, we quickly ruled out ones combined with life insurance.  You get a lot less $ for the money you are willing to pay in since they need to fund the life insurance part.  We have been drawn to them for a couple of reasons:  1) the ones we have looked at also pay for in-home care and 2) we don't want to leave the left-alive spouse penniless.  While you can have life insurance, depending on how you pay (or don't) the nursing home may require that it be turned over to them.  His grandma ended up almost having that happen, although she passed right before the change went through.  Since she was going in on Medicaid plus the $ she had from her pension, they were requiring that any additional assets, which included her life insurance, be converted to cash to help pay.    The in-home care part is helpful since you may still be well enough to be at home, but need help with some of the activities of daily living.  And the $ go further with in-home care.  The policies were were looking at were for ~$200,000 to 250,000 benefit for each of us.  The total is based on a certain $ per day for a specified years, inflation protection, and a few of the policies let us "share" the pool of money.    You may want to look at if the policy covers any in-home care, any inflation protection, etc.   At age 61, depending on your assets, it may be worth it depending on what the qualifying events/restrictions are, what other options you have for help, etc. 

[bookkeeper]

DH and I have LTC insurance.  Just had a check up with our agent.  We have had the policies in place for a little over 10 years.  In that time we have had one premium increase.  Currently our premium is $190/month for both of us.   It is so cheap because we were younger when we purchased it.

It made sense for us because DH was working a job with 30 years of service and out retirement.  If something happened to him before he was able to stop work and access his retirement, we would have had a hell of a time paying for nursing home care.   As our agent put it:  You have enough money to retire early, but you don't have enough money to retire if one of you lands in the nursing home.

DH is an active guy, biking, hunting, fishing, hiking, 4 wheeling.  I have taken him to the emergency room more than once.  I have a clumsy streak a mile long too.  I could totally see myself needing skilled care after tripping on the sidewalk and hitting my head!

Now that we are a little farther along financially, we could make different choices with that $190/month.  So far we have chosen to keep our policies.

[tskeeter]

Apr 8, 2019 13:24:56 GMT -5 dragonfly said:

Hello All! L-o-o-o-o-o-o-n-g time lurker here with my first post.

My company is offering a life insurance/long term care policy of $10,000. The amount doubles to $20,000 if used for LTC, or pays $10,000 to your beneficiary(s) if not used. They are paying the premium on this base policy.  We can also buy additional coverage. I'm thinking of buying up to $40,000 which would equal $100,000 in LTC benefits (the company's $10,000 + my $40,000 x 2). Based on my age - 61 - the buy up premium is $140.00/month. I can take the policy with me when I leave, but would have to pick up the company's premium of about $35.00/month so $175.00/month total.

What are your thoughts on LTC policies? Are they worth the cost? I am not married and my daughter lives out of state and is unlikely to return to her home time to care for me in the event it is needed as she and her husband are military. Any one have experience with LTC?   Any input, pros/cons or horror stories is greatly appreciated.

I’d be hesitant about buying additional coverage through your employer’s LTC insurance plan.  Often, the cost of the additional coverage is more than it would cost to buy the insurance on the open market.  The way it works is the employer gets a good deal on the insurance offered as an employee benefit and the insurance company hopes that enough employees buy additional coverage at above market rates that the insurance company comes out ahead.