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Old 10-19-2016, 08:58 PM
 
Location: Baltimore, MD
3,745 posts, read 4,220,203 times
Reputation: 6866

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I can see both sides of the argument regarding the need for LTCI. I was sitting here reviewing my options regarding my LTCI renewal and after reading all of the posts, I have decided to suck it up and pay the 15% premium increase (after I give the insurance company a hard time, of course). There are other options including exercising a non-forfeiture right to change my coverage to "paid up" status. I'll probably call to find out more information regarding that option. I purchased the coverage because I do not want my children feeling they need to care for me in my old age. Sure, I'd rather kill myself then go into a facility, but what if I fail? If I didn't have children, I wouldn't bother buying LTCI.

Here's the other side of the argument. One of my sons is an actuary. He works for an insurance company and in general, believes insurance is a rip off.

He only carries minimally required insurance for his vehicle and home. He has a high deductible health insurance policy and he does not carry life insurance. (I'm freaking out over the latter because he has a newborn.) He considers insurance a huge waste of money and true to his nature, he's not willing to part with his money on what he considers a poor bet. Other than the life insurance, I think he's probably right.
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Old 10-19-2016, 09:02 PM
 
Location: SoCal
13,239 posts, read 6,345,210 times
Reputation: 9854
My premium went up 62%. I agreed to the premium. In five years, my pension will pay the LTCI.
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Old 10-19-2016, 09:10 PM
 
12,708 posts, read 9,981,349 times
Reputation: 9515
Quote:
Originally Posted by HopHillers View Post
After an exhaustive LTCi research project, I offer the following thoughts for people who do not currently have LTCi and who do not have access to a policy subsidized by an employer, the federal government or a state government. I mean no disrespect to any of you who have already purchased coverage. This post is not intended for you. I respect your sincere decision to do what you thought was right for you and your family.

Here are the top ten reasons I found as to why LTCi doesnít make sense for most people.

1) New LTCi policies are expensive.
Yes...

Quote:
Originally Posted by HopHillers View Post

2) Those expensive policies will not completely cover you. Inflation adjusted coverage for a worst case scenario of 5+ years in a $10,000+/month nursing home is prohibitively expensive or simply not available.
Ok, but if you gift your assets away at the beginning of the 5 years, the look back period for Medicaid will be over after 5 years, thus you don't need more than 5 years of coverage if you plan strategically for Medicaid to take over.

Quote:
Originally Posted by HopHillers View Post

3) You have to make a lifetime commitment to the program without knowing the cost. Thatís because your total cost will depend on two big unknowns Ö future premium increases and your life expectancy.


available.
They don't offer single premium policies any more? Really? I am skeptical.

Quote:
Originally Posted by HopHillers View Post

4) You may have to drop your coverage without collecting a dime if you canít afford the premiums in the future. This scenario has two unpleasant outcomes: i) you wonít be covered when you may need the coverage the most; and ii) you will lose all the premiums you paid over the years.
See above.

Quote:
Originally Posted by HopHillers View Post

5) The psychology of playing this game stinks, because you have to live your retirement years wishing and hoping you donít get hit with premium increases you canít afford. The probability of worrying about this problem is high.
See above.

Quote:
Originally Posted by HopHillers View Post

6) Statistically speaking, most people will never need or use the policy. You and your family will fight like heck to keep you out of a nursing home. And, on average, most people who go into nursing homes donít stay for very long. Of course some people end up in nursing homes for a long time, but the probability of that is low. If you sit a monkey in front of a typewriter, sooner or later it might pound out the Gettysburg Address. Itís reasonable to bet against the monkey Ö and LTCi.
This is true for *any* insurance. You get insurance precisely to cover the unlikely, not the likely. By this argument, you should not insure you home, car, life, or health either.

Quote:
Originally Posted by HopHillers View Post

7) You may have to sacrifice more enjoyable things in your retirement to pay your LTCi premiums.
Same is true for other insurance as well. So you're going to go without health, home, car, and life insurance too?

Quote:
Originally Posted by HopHillers View Post

8) You donít need LTCi if you have financial assets over $2-3 million. You can afford to self insure.
Reasonable...

Quote:
Originally Posted by HopHillers View Post

9) You probably canít afford LTCi if you have financial assets under $250,000 to $500,000.
Reasonable...

Quote:
Originally Posted by HopHillers View Post

10) Getting your insurance company to pay benefits is not without risk. You must hope your insurance company stays solvent for a long time or doesnít sell your policy to a financially weaker company. And, you may need an advocate to fight the insurance company to get your benefits, because you will be in no condition to do so.
Good points! It is important to choose a solid company that is less likely to go bankrupt or stiff you, but the risk is very real and cannot be completely eliminated.

Quote:
Originally Posted by HopHillers View Post

[mod note: "LTCi", sometimes known as "LTC", is Long-Term Care Insurance.]
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Old 10-19-2016, 10:13 PM
 
Location: Metropolis IL
1,603 posts, read 1,894,176 times
Reputation: 2352
If it wasn't for various retirement forums on the web, I would have never herad of LTC insurance. No one I know personally has ever heard of them either, much less have a policy.

Guess I have friends in low places.
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Old 10-19-2016, 11:17 PM
 
6,885 posts, read 7,289,708 times
Reputation: 9791
A very dear friend of 30-plus years happened to discuss LTCI (both our parents needed care, we’re just at that age)….
And she told me that she and her husband have gone with Genworth……not a company either of the two people I consulted recommended (for me).

I asked her “are you sure that’s a good company” she said it was one her adviser had checked out….so I dropped the subject. It was after-the-fact so I saw no need in continuing to second guess it with her. It’s not a company I would have chosen, but what was I going to say to her: ”Oh no, not that company? I heard this-and-that about it?” I asked her if they researched that company and others…she said they did. So I dropped it.

Quote:
Given it was going to cost $8,500/ yr for 3 years of coverage, we would still be very exposed if we needed care for 5 to 15 years. We still had an exposure problem.
Unless one can get a policy that covers ALL one’s care costs there’s always going to be SOME kind of exposure risk. How many companies are even offering LIFETIME coverage anymore?? Any? If you pay for a coverage at 250 a day and care costs you 300 – or your max is 5K a month and you care is 7K a month you STILL have to come up with the rest. Due to cost, at age 54, I only even got quotes for 3 year coverage. Five- and ten year obviously would have cost even more. Not to say that having a policy isn't better than not having one. Personally while I AM healthy and can truly enjoy my life, I don't' want to take $250 a month out of my budget for LTCI. I'm just being honest with myself about that.

In MY case all LTCI would do is STRETCH the money I DO have, and of course, hopefully stretch it to longer than I live, so I don’t run out. In my last consultation I realized that I had enough for three years of private pay in a facility, and that most people aren't in a facility that long. So I'm not getting insurance now. And I have enough for longer that that if home care is less than 24/7. An elder may need more than three years of help with some ADLs, but I don't think most people need more than three years of private pay home care 24/7.

I readily accept that by not having LTCI I’m hoping that odds play out in my favor.
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Old 10-20-2016, 02:25 AM
 
71,663 posts, read 71,801,099 times
Reputation: 49256
Quote:
Originally Posted by reneeh63 View Post
You may not be likely to need life or homeowners insurance...and that's why they are so much cheaper than decent LTCi...also, we all have a lot of experience with those products - they are simple to understand, pretty clear what they cover, and the premiums seem to rise in a reasonable manner. None of that applies to LTCi.
we got our renewal this week and our ltc premium did not go up 1 penny . so far they seem to have nailed the numbers correctly unlike the earlier policy's. first year we saw a 1k increase but since that things are flat
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Old 10-20-2016, 02:31 AM
 
71,663 posts, read 71,801,099 times
Reputation: 49256
Quote:
Originally Posted by ncole1 View Post
Yes...



Ok, but if you gift your assets away at the beginning of the 5 years, the look back period for Medicaid will be over after 5 years, thus you don't need more than 5 years of coverage if you plan strategically for Medicaid to take over.



.
the real problem with medicaid planning is that it can be all well and good you preserved a few million in assets . now try to have your spouse live off that income . they can't in many areas because the stay at home spouse's income is capped at low levels once medicaid is used . i know my wife would live an impoverished life style trying to live on the medicaid income limits of 2990.00 a month in nyc .

a low income housing project allows more income than that .

so it is something to consider. with medicaid planning because there is the income issue as well as an asset issue .

our plan pulls the income restriction off medicaid if they pick up our bills .

right now there is no limit but they request the stay at home spouse contribute 25% of the income to care but it is only a request .

i would gladly pay the 25% . to be able to keep 75% of all the income with no limit while medicaid continues to pay for the private home you initially picked out is an amazing deal

Last edited by mathjak107; 10-20-2016 at 03:13 AM..
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Old 10-20-2016, 03:07 AM
 
Location: Massachusetts
207 posts, read 132,087 times
Reputation: 533
Quote:
Originally Posted by lenora View Post
I can see both sides of the argument regarding the need for LTCI. I was sitting here reviewing my options regarding my LTCI renewal and after reading all of the posts, I have decided to suck it up and pay the 15% premium increase (after I give the insurance company a hard time, of course). There are other options including exercising a non-forfeiture right to change my coverage to "paid up" status. I'll probably call to find out more information regarding that option. I purchased the coverage because I do not want my children feeling they need to care for me in my old age. Sure, I'd rather kill myself then go into a facility, but what if I fail? If I didn't have children, I wouldn't bother buying LTCI.

Here's the other side of the argument. One of my sons is an actuary. He works for an insurance company and in general, believes insurance is a rip off.

He only carries minimally required insurance for his vehicle and home. He has a high deductible health insurance policy and he does not carry life insurance. (I'm freaking out over the latter because he has a newborn.) He considers insurance a huge waste of money and true to his nature, he's not willing to part with his money on what he considers a poor bet. Other than the life insurance, I think he's probably right.
Interesting observation from your son. I'd like to add that the insurance broker I went to to get LTCi quotes is the owner of a large successful commercial and personal agency in Boston. He's the real deal. He's also been a dear friend for 25 years. His advice to me was to not purchase LTCi because it wasn't worth it. BTW, his father suffered from dementia and was in assisted living for 7 years. His argument was that the economics simply do not make sense. He also warned me that future premium increases were going to be part of the equation.

Does that opinion mean that he thinks all insurance is a bad deal? Obviously not. The claim that if you oppose LTCi, you oppose all insurance is illogical. It's a red herring that's designed to misdirect and mislead the debate.
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Old 10-20-2016, 03:14 AM
 
71,663 posts, read 71,801,099 times
Reputation: 49256
insurance is pooled risk and a way of multiplying the results . pooled risk always needs more who lose than win to work . this is why insurance can do things you can't do on your own .

just look at how risk pooling in something like a single premium annuity works .

take 25 of us and have us each buy a 25 year muni bond at 3% . well at the end of 25 years all we got if we live is a 3% roi per year. it never gets any better than that ..

if we assume each year 1 of us dies ,we throw that money in the pool for those who go on , by the time the 25th year comes the last man standing see's an amazing 10% roi per year as an average .

that is on a bond that never paid more than 3% .

so insurance is risk pooling and it does things you may never be able to do on your own . so we tend to insure against those events in life that if it is us can be particularly devastating to us. we all may have different ideas as to what those events are .

Last edited by mathjak107; 10-20-2016 at 04:03 AM..
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Old 10-20-2016, 04:47 AM
 
71,663 posts, read 71,801,099 times
Reputation: 49256
Quote:
Originally Posted by ncole1 View Post
Yes...


They don't offer single premium policies any more? Really? I am skeptical.


.
we have not seen them offered as an option in anything we looked at . last time we saw them was many many many years ago when we first started looking in to plans . by the time we acted they were no longer an option .
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