Hybrid LTC policies - a new trend for aging boomers? (supplement, long-term)
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I was talking to a buddy of mine over the weekend who runs a small elder care consultancy practice, primarily providing advisory services on EoL financial planning. He has taken out a hybrid LTC for him and his wife that provides a ~$100,000 life insurance component and ~$200,000 total LTC component at age 70. As one ages, the LTC component increases, and the life insurance component decreases.
He's saying more of his clients go to toward the hybrid option, as traditional LTC is either use it or lose it, and traditional LI doesn't cover the long-term costs of someone who is impaired. Pair a hybrid with a strong acute care policy, and he thinks most bases are at least partially covered. Most people are probably the most underfunded and vulnerable from the LTC perspective.
Do you think these policies at least cover more bases? Are they a trend going forward?
I don't think that sounds like a good policy either unless you have enough money to cover your LTC needs and don't really need the insurance. $100K is not much of a life insurance policy and $200K is very little to reserve for LTC needs.
The best plan is to purchase both life insurance and LTC insurance at a young age when the policies will be less expensive.
Also, please note, that if you are single, and no one is relying upon your income, there really isn't any need for life insurance.
they are terrible . most are not are not inflation adjusted at all and cap out and can leave you in a position in 20 years of having no insurance at all . having a little bit of insurance does you no good if you need to go on medicaid and lose assets or income anyway .
for the amount of dough you need to put in to one of these you can take a small piece of the gains on a regular ltc plan and pay the premium .
these are good for those who can't qualify for a regular plan
I don't think that sounds like a good policy either unless you have enough money to cover your LTC needs and don't really need the insurance. $100K is not much of a life insurance policy and $200K is very little to reserve for LTC needs.
The best plan is to purchase both life insurance and LTC insurance at a young age when the policies will be less expensive.
Also, please note, that if you are single, and no one is relying upon your income, there really isn't any need for life insurance.
Exactly what I was thinking. $200k doesn't go very far if someone is incapacitated or in an LTC facility for a long time. I have had two great aunts in the last couple of years die after between 3-5 years in nursing homes who probably ran up more than the $200k benefit.
I think his monthly premium is around $300/month for a 60 year old smoking male, increasing with age.
Quote:
Originally Posted by mathjak107
they are terrible . most are not are not inflation adjusted at all and cap out and can leave you in a position in 20 years of having no insurance at all . having a little bit of insurance does you no good if you need to go on medicaid and lose assets or income anyway .
for the amount of dough you need to put in to one of these you can take a small piece of the gains on a regular ltc plan and pay the premium .
these are good for those who can't qualify for a regular plan
My opinion was that the cost/benefit ratio was so bad that dead is still dead and broke is still broke, even after exhausting this plan's benefits in many cases.
Unless you are at an employer that offers LTCI as a bene (increasingly rare and many employers who have offered traditionally are now dropping it), or, signed up years ago / at a very young age, good luck even finding LTCI any more.
Sounds like a poor investment unless one is in poor health and seriously expects to use the LTC benefits at a early age.
I'll take my chances.
As I've posted before, truth of the matter is only 15% of people over 65 spend any time in a nursing home (I learned this fact thru my employment as a social worked who dealt with the elderly. One of my last clients died in a nursing home. He was 91 and was in LTC for 11 days). That 15% figure includes many who only spend a few weeks in LTC recovering from surgery or an injury. And Medicare pays for that.
70% end up needing either in home care , assisted living or nursing home care at some point while according to census info 20% of the population over 65 is in a nursing home .
which one will you be ?
spin the wheel . if it is you on the wrong side of the statistic you better be prepared or everything you worked a lifetime for can be gone and the stay at home spouse impoverished .
personally i couldn't spin the wheel and see someone possibly setting up their spouse for a life of impoverishment the wheel setting my spouse up for a life of impoverishment .
that is why many have insurance , trusts and other plans . to protect against the fact that the chance it is them is not financially devastating .
what do you think the chances of your house burning down or totaling your car are in any given year ? thousands of times less then needing long term care .
How much insurance you need depends on how much of your own money you have. (and what illness, condition or care need you have, which of course one never can predict)
LTCI usually doesn't pay for every bit of LTC costs. It usually supplements, and therefore stretches out your money longer.
As it so happens, exactly a year ago -- at age 54, I looked at, and got quotes for both traditional LTC and Hybrid policies…..with quotes in the 200-250 a month range. I ended up not getting any of them I'm SINK, so will just pay until the money runs out, and go on Medicaid. I also have already made some decisions about estate planning so unless I just happen to change my mind that's the way things will stay. I haven't carried out those plans, so they're not in place yet -- and of course I may not get to institute them. But that's my plan as of now
-----------------------------
All 90 elimination period -- for in home or facility care -- TRADITIONAL STAND ALONE LTC policy:
HYBRIDS: with extended care rider for LTC, 80% option for cash out for any use
AGE......POLICY MAX ....MAX Monthly Benefit........Monthly Premium
54........250,000.............$5,000.............. ..........$250.50
54........250,000.............$4,920.............. ..........$236.00
in these parts we need 400-500 a day . also inflation in long term care has been above 5% a year . . what happens to your policy amount at 80 ?
we have a nys partnership plan with 350 a day , 5% inflation adder ( we can't get less then 5% here ) , 3 years insurance and full asset and income protection after the insurance run out .
we are in our 60's and after our 1600.00 state tax credit for the two of us we pay about 6500.00 a year . had we started earlier it would have been a lot less plus now i got a surcharge for being pre diabetic .
we really wanted it for the perks not so much the 3 years nursing home / 6 years in home care
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