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Old 08-24-2017, 07:04 AM
 
216 posts, read 114,102 times
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there are problems with those hybrid life policies and they end up being very poor deals . besides the fact they are very very costly internally and become more so as rates rise the fact is you may have to double the size of the policy decades from now when the amount is 2x what you planned for .
I respectfully disagree, if you add an inflation rider benefits do increase just as a traditional policy does. If one focuses on the guarantees, policy performance outside the guarantees is irrelevant.
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Old 08-24-2017, 07:23 AM
 
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they are overly expensive deals without the inflation rider . they become even worse more costly deals with it . read michael kitce's link i posted if you want to know why they are overly expensive poor ways of dealing with ltc .
let me repeat my opinon . they should only be used as a last resort
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Old 08-24-2017, 07:29 AM
 
216 posts, read 114,102 times
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So how are they overly expensive? If you don't use them your premiums are returned, they can pay a lifetime claim, the guarantees are what should be focused on. Many investors and advisors would disagree they are expensive deals. You can't get lifetime benefits with traditional product with the exception of one company with very strict underwriting. These are not for everyone. I see you bought a NWM policy, did you compare rates with other traditional policies? I find they are some of the most expensive in the market.
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Old 08-24-2017, 07:31 AM
 
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i explained it above , so here it is again .

as michael kitces stated :


As traditional long-term care (LTC) insurance becomes more and more expensive, and interest rates remain at ultra-low levels, planners and their clients have become increasingly interested in so-called “Hybrid LTC” policies that match together a life insurance or annuity policy with LTC coverage, especially with a more favorable set of tax rules that took effect in 2010. For many, though, the primary appeal of hybrid policies is the simple fact that, unlike their traditional LTC insurance brethren, the premiums really are guaranteed and cannot be increased in the future. Given some of the extraordinarily large premium increases that traditional LTC coverage has experienced in recent years – especially for some of the early policies issued in the 1990s and early 2000s – a cost guarantee is remarkably reassuring.

Yet the reality is that the guarantee of LTC premiums in a hybrid policy may be entirely offset by the fact that the insurance company controls the cash value, and is under no obligation to pay a going rate of return, especially if interest rates rise. In other words, it doesn’t really matter that the insurance company can’t increase the premiums on the policy by $4,000/year, when the company can simply under-pay on the interest rate by $4,000/year to accomplish the same result! And while the cash value of a hybrid LTC policy generally does remain liquid, taking a withdrawal to reinvest to get better, higher rates would entail surrendering the policy and forfeiting the LTC coverage! In fact, for some types of hybrid LTC policies, the arrangement contractually provides no rate of return to the client at all, and is essentially the equivalent of the client selling a call option on interest rates to the insurance company, where the more rates rise the greater the company wins at the expense of the client!

Given the unique structure of hybrid LTC policies, though, there are still several circumstances where they may be appropriate, despite the concerns about how they may perform in a rising rate environment. In some cases, simplified underwriting provides a way to get coverage for those who otherwise couldn’t get any, and in other scenarios, the favorable tax treatment alone can make a hybrid policy compelling as a place to park an existing appreciated annuity. Nonetheless, the bottom line is that in today’s environment, consumers must be careful not to engage into hybrid policies that amount to little more than offering the insurance company the unilateral right to profit if/when interest rates rise, when the reality is that simply following a “buy LTC insurance and invest the rest” philosophy would lead to a far better outcome in the long run.

https://www.kitces.com/blog/is-the-l...just-a-mirage/
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Old 08-24-2017, 07:33 AM
 
71,463 posts, read 71,652,652 times
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Originally Posted by Pintail07 View Post
So how are they overly expensive? If you don't use them your premiums are returned, they can pay a lifetime claim, the guarantees are what should be focused on. Many investors and advisors would disagree they are expensive deals. You can't get lifetime benefits with traditional product with the exception of one company with very strict underwriting. These are not for everyone. I see you bought a NWM policy, did you compare rates with other traditional policies? I find they are some of the most expensive in the market.
i never owned a nwm policy . i own a new york state partnership plan which i really bought for the full asset and income protection after the 3 years snf or 6 years in home care /assisted living runs out .

i looked in to a hybrid . to get the coverage i needed i had to plunk down a few hundred k at a very very low return . just what i would give up in return i am paying for my policy with a lot more left over .
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Old 08-24-2017, 07:43 AM
 
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Quote:
Originally Posted by mathjak107 View Post
i never owned a nwm policy . i own a new york state partnership plan which i really bought for the full asset and income protection after the 3 years snf or 6 years in home care /assisted living runs out .

I'm looking into my state partnership plan. Have a meeting with another agent on August 31th with
a company offers the partnership plan. I visited and got a quote from one insurance company and they
did not even mentioned the state partnership and they are actually setup for it. I didn't know it until I read about it on this forum and that was after I got my quote. Pretty disappointing the agent did not even bring it up to me while we visited about LTC. I call my state agency and the person was very good explaining it to me and told me no one should be being buying LTC with out the protection if they have assets to protect. People are just not educated on the plan and benefits. The agent I am getting the quote from on August 31th knew all about it and will fully explain it to us during our meeting. Looking forward to that.
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Old 08-24-2017, 07:47 AM
 
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what state ?
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Old 08-24-2017, 08:03 AM
 
708 posts, read 501,365 times
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Quote:
Originally Posted by mathjak107 View Post
what state ?
North Dakota
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Old 08-24-2017, 08:33 AM
 
Location: Hiding from Antifa?
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I hate to say it, but are we not at the same point with LTC, where we were back in the early 20th century when Social Security was implemented? If a government LTC plan with income withholding were started where the people that are older and out of or almost out of the workforce could still use Medicaid if needed (phased out over time). But, this time make it a true trust fund, where the funds can never be used for anything else, so that future taxpayers have nothing to worry or complain about.

People's wealth is getting ripped away from them, sometimes via Medicaid taking it, leaving the person in LTC unable to pass it on to their heirs. In many cases, the heirs are close to being in the same situation, but they have nothing left to cover their needs. It just keeps snowballing in many families.

As long as the life expectancy keeps increasing the problem will only get worse. This is the reason we are seeing this problem in the first place. 50 years ago we didn't have the problem. Most families were single income and if someone did need LTC, someone was available to take care of them.

We just put my dad into a Nursing home/rehab center in Ohio. Soon, his care will be on Medicaid. The only thing saving my sister from losing the home she is living in (my Dad's) is the fact that she is disabled.

My dad, 92, keeps telling my BIL to bring in his gun so he can take care of the problem. For those willing to, maybe assisted suicide is another part of the solution. I'd hate to see my dad go that way, since his problems are only physical. He is mentally sound, unless you consider his wish to die a mental issue. If only I could have hit the Powerball! I could have had him set up in a new handicap equipped house with 24x7 nursing care.
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Old 08-24-2017, 10:33 AM
 
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Quote:
Originally Posted by Willistonite View Post
North Dakota
i don't think they offer total asset or income protection . i think it is more like if medicaid spends 300k then 300k is protected .

Last edited by mathjak107; 08-24-2017 at 10:42 AM..
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