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After reading the article, I would think that one would at least want to know what their state's maximum guarantee fund is to rescue policyholders. It seem Florida's is $300,000.
I can't imagine how hard it must be to be threatened by a failed company to keep paying your premiums lest you lose it all, and not hearing from guarantee fund. Nor what it's like for those who have a policy that far exceeds their state's maximum payout. And you have to wonder if you'll ever see that payout. It's too dangerous a game for me (clearly I'm in the anti-LTCi camp).
Lastly, these companies that can hide their liabilities to look better (in this case, in Ireland) ...well, there's just too much behind the scenes stuff for me to want to deal with them at all.
Interestingly enough, one poster here, back in 2008 (the year before the court fight started against liquidation - vigorously fought by insurance sales people and the industry itself), recommended Penn Treaty.
i look at all our insurance like i do my auto and fire insurance .
i pay premiums for immediate coverage , not coverage off in the future . each year my premium covers us and next year if they are around that is another story .
they will cover up to 300k in this case . typically policy's are priced so you pay in about 1 years worth of a nursing home charge in premiums once you hit the likely ages but that does not mean you won't need it sooner .
my co-worker fell off a ladder painting , broke his hip and had a stroke during hip surgery . he was paralyzed and is in a home in his 50's. it devastated his family and impoverished them ..
right now that 300k is likely 3x or more what you paid in assuming you have been paying in for decades . .this is also a very rare case . most insurers of life , health ,annuity and long term care just have the policy holders moved to another company .
our health insurer failed . we were moved to another company and any bills not paid were deemed not our responsibility .
Last edited by mathjak107; 04-01-2017 at 10:11 AM..
Our policies are with John Hancock--who stopped issuing new LTCI policies in 2015 but are maintaining the ones they have now
Hopefully John Hancock will stay solvent
But health insurance and LTCI are two separate types of insurance...
As I've posted before, my mom had a vintage John Hancock policy. It was now what is considered a 'cadillac policy', i.e. no deductible, no waiting period, no maximum.
Even so, the 20 years of premium she paid into it amounted to a huge loss after she spent several months in an assisted living center. I don't have the figures at my fingertips but when all was said and done, she would have been better off banking the money she paid in premiums.
On the flip side, DH's mom who has dementia, is entering her 4th year of LTC. She has very modest means - a SS pension, veteran's widow benefits, rental income from her house. Still all of these cobbled together have enabled us to pay her LTC expenses, and an insurance policy would have been superfluous.
Last edited by biscuitmom; 04-04-2017 at 01:01 AM..
I have heard too many horror stories about LTCi and we decided to self-insure. Basically that means we spend less than we could and therefore keep a healthy cushion of savings. For the most part insurance companies cannot cancel a policy, but many (or most, or all) those LTC policies have escape clauses in which the insurance company can change the policy when you renew, and renewal happens yearly. So you pay premiums for years and years and all of a sudden the benefits change on you. The fraction of people who need LTC is so high that insurance companies have to charge close to what your costs would be if you needed LTC, so basically the ROI for the insured is not real high anyway.
premiums are priced so you pay roughly 1 years stay in a snf . that is still reasonable . my dad spent 5 years in a snf facility .
but we didn't buy ours for the 3 years insurance . we bought it for all the perks and protection after the insurance runs out .
the fact they pay for assisted living is a big plus . that is likely to be utilized today more and more .
years ago money magazine did a feature story on us . they wanted to pit their team of pro's against me to see how my plans compare to their ideas .
we were self insuring ltc. they were dead set against it . they were right . living below one's means can mean little in an extended downturn when the money is not intact and a hige chunk evaporated when you need it as well as living below your means does not really mean a whole lot if that money is part of the sum you are basing that draw on since it is counted as being able to have principal spent down to zero if poor outcomes continue . .
we decided not to self insure after self insuring just because we realized after it was pointed out to us that to really be self insuring , that means treating a huge sum of money like any insurance money . it has to be isolated , conservatively invested and always ready and there .
it has to be kept safe ,secure and intact which means no volatile investments as well as keeping that money out of the income stream generation money since a safe withdrawal rate assumes principal is spent down . that means low return on the "insurance money " .
so by taking a policy we can fully invest that money and for just a piece of the gains we can be fully protected and have perks that require no asset shifting , no trusts , no look backs and most important no limit on the stay at home spouses income .
our elder law attorney reinforced that choice when he told us his practice is dominated with the self insurers who in tysons famous words " all have a plan , until they get punched in the face "
suddenly the self insuring aspect becomes a panic situation to the spouse who stays at home ,who can now be thrown in to impoverishment if things go on long enough so they go in to survival mode . generally self insuring means nothing special was done , we just cross our fingers and hope it isn't us that is on the wrong side of a statistic
basically we just leave the money out there with the carrot on the stick and hope it is there if we need it . but the fact is even if it is there , the stay at home spouse will still run a risk of impoverishment so they will go in to survival mode and first find an elder law attorney to try to do something after the fact .
we found it better to try to mitigate things before that happens . our planning and investing now can be done with total disregard of any long term care provisions having to be considered .
Last edited by mathjak107; 04-04-2017 at 02:44 AM..
It's a risk (that it'll remain solvent and affordable) I'm willing to take for now. Fortunately it's not putting a big dent in the monthly expenses (right now). We'll see how high the premiums get over the future years (Fed LTC program).
premiums are priced so you pay roughly 1 years stay in a snf . that is still reasonable . my dad spent 5 years in a snf facility .
but we didn't buy ours for the 3 years insurance . we bought it for all the perks and protection after the insurance runs out .
the fact they pay for assisted living is a big plus . that is likely to be utilized today more and more .
years ago money magazine did a feature story on us . they wanted to pit their team of pro's against me to see how my plans compare to their ideas .
we were self insuring ltc. they were dead set against it . they were right . living below one's means can mean little in an extended downturn when the money is not intact and a hige chunk evaporated when you need it as well as living below your means does not really mean a whole lot if that money is part of the sum you are basing that draw on since it is counted as being able to have principal spent down to zero if poor outcomes continue . .
we decided not to self insure after self insuring just because we realized after it was pointed out to us that to really be self insuring , that means treating a huge sum of money like any insurance money . it has to be isolated , conservatively invested and always ready and there .
it has to be kept safe ,secure and intact which means no volatile investments as well as keeping that money out of the income stream generation money since a safe withdrawal rate assumes principal is spent down . that means low return on the "insurance money " .
so by taking a policy we can fully invest that money and for just a piece of the gains we can be fully protected and have perks that require no asset shifting , no trusts , no look backs and most important no limit on the stay at home spouses income .
our elder law attorney reinforced that choice when he told us his practice is dominated with the self insurers who in tysons famous words " all have a plan , until they get punched in the face "
suddenly the self insuring aspect becomes a panic situation to the spouse who stays at home ,who can now be thrown in to impoverishment if things go on long enough so they go in to survival mode . generally self insuring means nothing special was done , we just cross our fingers and hope it isn't us that is on the wrong side of a statistic
basically we just leave the money out there with the carrot on the stick and hope it is there if we need it . but the fact is even if it is there , the stay at home spouse will still run a risk of impoverishment so they will go in to survival mode and first find an elder law attorney to try to do something after the fact .
we found it better to try to mitigate things before that happens . our planning and investing now can be done with total disregard of any long term care provisions having to be considered .
I've previously shared and will share again here the saga of our previously multimillionaire friends. Once and only once we discussed this topic with them and rapidly found it was a topic better left off the table. They were part of the "LTCI is a scam" crowd. They were at the time rolling in money and "self insured" (but definitely not the way insurance companies do it). Well, one of them got hit with a series of crises and is now in need of 24 x 7 x 365 home care. The "self insurance" funds are long gone. Now, cash flow comes from family members' charity and a reverse mortgage. Massive wealth destruction is in process and the surviving spouse may be hoping for a shortened life.
I've previously shared and will share again here the saga of our previously multimillionaire friends. Once and only once we discussed this topic with them and rapidly found it was a topic better left off the table. They were part of the "LTCI is a scam" crowd. They were at the time rolling in money and "self insured" (but definitely not the way insurance companies do it). Well, one of them got hit with a series of crises and is now in need of 24 x 7 x 365 home care. The "self insurance" funds are long gone. Now, cash flow comes from family members' charity and a reverse mortgage. Massive wealth destruction is in process and the surviving spouse may be hoping for a shortened life.
I think your example reflects my thinking. If you are able to afford LTCi and don't buy it you are taking a risk that I have no interest in taking. Yes I have a great policy that I got years ago at a low rate premium fixed so it is easy for me to say. But it is my situation and if you can afford and don't buy that is your choice. My concern is for those who legitimately can't afford and are above the current Medicaid level. Who knows what that level will be down the road.
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