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However, if you look at the bigger picture, you can see that there is more to meet in long-term care insurance than the naked eye. I can understand why many are still skeptical about statistics don't lie. According to www.acsia.com, at least 75% of Americans aged 75 and above will need long-term care insurance but only a handful 10% of that original number are prepared. The remaining number would rather jump and talk a risk.
No, what it says is that they'll need long-term care.
There's a difference between needing care and needing insurance.
It's an insurance company website that doesn't give the source for the statistics it's using.
Many - not just affluent - seniors manage to pay for their LTC out of their income flow. My MIL is one - she's been in an assisted living facility for 18 months. She draws $1200 a month SS and $1100 a month Veteran's Aid & Attendance. We have rented out her modest home, which nets around $1300 a month. The three together add up to just under her monthly expenses at the LTC. She has some modest savings, around $27k, and we draw on that to pay for her few incidentals not covered by the LTC.
DH's aunt & uncle shared a suite for a few years in the same LTC. They were blue-collar workers and their combined SS and retirement pensions covered covered their expenses. They sold their (again, modest) home just before entering the LTC, and their heirs invested that money to cover incidentals.
DH and I have run the numbers many times and we are confident our pensions will be sufficient to cover LTC expenses. We're fortunate to have good pensions and investments. It'll be a bit closer if one of us in LTC and the other still has to maintain an outside residence, but it will work. We see no reason to invest in a vehicle whose monthly fee will likely far outstrip inflation. Another point I've not seen mentioned here is that the monthly insurance premium must still be paid while drawing benefits.
Mathjack, would you say I have no plan just because I say I'll self insure, and then go on Medicaid? Your statement was just a blanket one, no qualifier -- that many or most people may not have a plan.
I'm single with no kids, no one but myself to protect my assets for. If I have enough to self insure for 2-3 years and then am willing to accept that I'll just go on what ever government program exists at the time...why is that not a plan?
I've looked at LTCI (at 54)...and I just don't want to put 225 a month away for that right now. I can't say I won't change my mind. And I might get a GOOD policy for one year. (to stretch my assets even more.) But the policies I've seen for 200+ a month...pay not even HALF of what costs are TODAY, let alone 30 years from now, even with 3% inflation protection. (Let alone the stories you hear about companies doing everything they can NOT to pay.)
I can't say I absolutely WON"T get a policy (I'm actually leaning toward the life insurance/hybrid.) And I suppose I can't say you don't get that much in return for what you pay...but when this insurance costs more than others combined, it's not surprising that it gives many people pause.
I readily admit that psychologically I'm not ready to spend more money on yet another insurance and NOT a cheap one -- especially one I likely won't need for 25 years or more. I know that 'technically' this insurance is no different from car insurance or homeowners insurance. But frankly I'm feeling 'insuranced" to death. So as of now..my "plan" is self insure for as long as I can, then go on Medicaid. Millions of people are on it, and they're not in hell holes.Some maybe. But I think most are not.
Realize that Mathjak is always in 'asset protection mode' because he is 1/2 of a couple.
I'm the same as you - single with no kids, no one but myself to protect my assets for.
I can say absolutely I will never get a LTC policy.
Realize that Mathjak is always in 'asset protection mode' because he is 1/2 of a couple.
I'm the same as you - single with no kids, no one but myself to protect my assets for.
I can say absolutely I will never get a LTC policy.
I know. But I just have a thing about blanket statements without qualifiers. Because general statements may not (see my qualifier) apply to all. But I'll live. I think Mathjack is cool.
depends on the options you take. our policy does not charge a premium while drawing benefits. if a couple though the premium is due for the healthy spouse but not if for the spouse drawing a benefit. the option was barely a blip in the rate..
Yep i first thought i would go that route since i didn't want to spend the money on it. But the team of pros at money magazine talked me out of it when we did the article with them. They were right.
The more research i did on it the more i realized i was wrong.
Interesting point about asset protection when 1/2 of a couple, inheritance/financial support of children, etc. versus the one person alone. I see this "big difference" overlooked all the time when it comes to financial planning, long term care insurance, reverse mortgages, etc.
I've never seen that in an LTC policy. Could you share more info, please?
It was in my mom's Hancock policy, she died in 2008. Actually it wasn't stated in the policy but we discovered (thank goodness, in time) that it was assumed. In the years following, I heard others report the same. Might not be standard anymore but still it's one more thing to check out.
I had mixed feelings about mom's policy. She took it out in 1988 and on one hand it was solid gold: no waiting period, no max - features that aren't available now. On the other, she paid into it for 19 years and rec'd benefits for some 8 months so bottom-line she didn't recoup her premiums. Also, it wasn't until after her death that we rec'd benefits. Hancock did eventually pay everything, in arrears, but if we had depended upon them to cover expenses from the get-go, we would have been in serious trouble. Even though the policy stated no waiting period, it was months before they paid off, and if we hadn't paid premiums in the interim, they would have denied benefits.
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) apply to all. But I'll live. I think Mathjack is cool.
