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Old 10-04-2017, 06:48 PM
 
3,072 posts, read 816,938 times
Reputation: 1704

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Quote:
Originally Posted by Pintail07 View Post
What do you see as "bad product'? What would you say are the bad parts? Rates can never be changed, benefits can never be changes except to increase/
Thank you for again raising this option. I had previously taken a look at it, including the Kitces article and moved on. Having increasingly convinced myself that LTCi might not work for me, this is worth a second review.

One Kitces cite where the product IS appropriate is: Using a hybrid life/LTC policy for a portion of money that was specifically going to be allocated to lower-return bonds anyway AND is not anticipated to ever be needed.

This I would do. Take some extra cash (not ever invested, though it was meant to be) and dump a bond fund and a lower-performing equity fund that have minimal capital gains to reduce tax consequences. I'd then adjust the 401K to rebalance into the desired equity / bond / cash ratio, treating the $100,000 as cash or depending on the product policy, a low-performing bond.

Sure, the $100,000 isn't accessible, but with a large pension (adequate for living expenses) I'm already sheltered from a down market.

The loss in "opportunity cost" while not negligible will be minimized.

Too, while not all policies fully (or even provide ANY) return for rising interest rates ... frankly, the more profitable to the insurance company, the more stable the product. It's another "hidden" cost that I'm fine with.

It's worth it to supplement possible LTC needs while maintaining the flexibility I want. Decide on a CCRC several years from now, cash it in. In interim there's a LTCi benefit. The payout would be about what I'd want to supplement other income flows to "self insure" without drawing down the portfolio.

A quick google didn't show the cost of COL riders, but that's a valid issue.

One comment of Kitces that I do question - in skimming, maybe I missed the point. He argues that investing the $100,000 in bond funds would almost (in this low interest environment) be adequate to cover the LTCi premiums. Fair enough. But here isn't he ignoring the (admittedly not great) but still existing death benefit from an unused hybrid policy that doesn't exist in LTCi? Plus, there's a risk of principle loss with a bond fund that doesn't exist in this product.
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Old 10-04-2017, 07:00 PM
 
216 posts, read 114,130 times
Reputation: 168
Quote:
Originally Posted by EveryLady View Post
Thank you for again raising this option. I had previously taken a look at it, including the Kitces article and moved on. Having increasingly convinced myself that LTCi might not work for me, this is worth a second review.

One Kitces cite where the product IS appropriate is: Using a hybrid life/LTC policy for a portion of money that was specifically going to be allocated to lower-return bonds anyway AND is not anticipated to ever be needed.

This I would do. Take some extra cash (not ever invested, though it was meant to be) and dump a bond fund and a lower-performing equity fund that have minimal capital gains to reduce tax consequences. I'd then adjust the 401K to rebalance into the desired equity / bond / cash ratio, treating the $100,000 as cash or depending on the product policy, a low-performing bond.

Sure, the $100,000 isn't accessible, but with a large pension (adequate for living expenses) I'm already sheltered from a down market.

The loss in "opportunity cost" while not negligible will be minimized.

Too, while not all policies fully (or even provide ANY) return for rising interest rates ... frankly, the more profitable to the insurance company, the more stable the product. It's another "hidden" cost that I'm fine with.

It's worth it to supplement possible LTC needs while maintaining the flexibility I want. Decide on a CCRC several years from now, cash it in. In interim there's a LTCi benefit. The payout would be about what I'd want to supplement other income flows to "self insure" without drawing down the portfolio.

A quick google didn't show the cost of COL riders, but that's a valid issue.

One comment of Kitces that I do question - in skimming, maybe I missed the point. He argues that investing the $100,000 in bond funds would almost (in this low interest environment) be adequate to cover the LTCi premiums. Fair enough. But here isn't he ignoring the (admittedly not great) but still existing death benefit from an unused hybrid policy that doesn't exist in LTCi? Plus, there's a risk of principle loss with a bond fund that doesn't exist in this product.
I suggest you talk with someone that specializes in LTCI. That broker should do as I do. spread sheet all options and all the good, bad and ugly.
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Old 10-04-2017, 07:06 PM
 
3,072 posts, read 816,938 times
Reputation: 1704
Quote:
Originally Posted by Pintail07 View Post
I suggest you talk with someone that specializes in LTCI. That broker should do as I do. spread sheet all options and all the good, bad and ugly.
Do brokers tend to specialize in LTCi, with others representing companies selling hybrid products? In googling, I came across comments on insurance boards asking how LTCi could compete against the hybrid? Still haven't made it to the quote stage but I need to move this along. Prices probably go up at 65 - and that's only 4 months away.

Too, here are the stats on current sales:

380,000: Number of individual long-term care insurance policies sold, 1990.
129,000: Number of individual long-term care insurance policies sold, 2014.
72,736: Number of hybrid life/long-term care policies sold to individuals, 2009.
305,068: Number of hybrid life/long-term care policies sold to individuals, 2013.
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Old 10-04-2017, 08:08 PM
 
Location: LTCShop.com
236 posts, read 113,100 times
Reputation: 151
Quote:
Originally Posted by EveryLady View Post
Do brokers tend to specialize in LTCi, with others representing companies selling hybrid products? In googling, I came across comments on insurance boards asking how LTCi could compete against the hybrid? Still haven't made it to the quote stage but I need to move this along. Prices probably go up at 65 - and that's only 4 months away.

Too, here are the stats on current sales:

380,000: Number of individual long-term care insurance policies sold, 1990.
129,000: Number of individual long-term care insurance policies sold, 2014.
72,736: Number of hybrid life/long-term care policies sold to individuals, 2009.
305,068: Number of hybrid life/long-term care policies sold to individuals, 2013.


The majority of the insurance industry doesn't want people to buy long-term care insurance. There's a lot more profit in the hybrids.
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Old 10-04-2017, 08:11 PM
 
Location: LTCShop.com
236 posts, read 113,100 times
Reputation: 151
Quote:
Originally Posted by Pintail07 View Post
I did read, and again he is talking about non guaranteed values. No one buys these plans on non guaranteed values. I suggest you reread the article and I think you will understand what I am speaking of.
Most hybrids are universal life policies that don't have the guarantees that are in the OneAmerica product (which is the product you've been referring to).


The biggest problem with the single-premium hybrid policies is the opportunity cost.
The second biggest problem is that the policies have, essentially, at least a 2-year Elimination Period.
The insurance company doesn't pay anything towards the cost of care for at least the first 2 years, sometimes longer, because the insurance company is using YOUR money for at least the first 2 years of benefits.

That's why the insurers love the single-premium hybrids. They get all the upside with very little downside.
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Old 10-04-2017, 09:15 PM
 
3,072 posts, read 816,938 times
Reputation: 1704
Quote:
Originally Posted by LTCShop View Post
The majority of the insurance industry doesn't want people to buy long-term care insurance. There's a lot more profit in the hybrids.
I just stumbled across this policy.

What do you think?

Mass Mutual MM-500-P. It offers a SNF only option, which I'd assumed did not exist. That would cover a tail-end worst-case scenario - hopefully at a relatively lower premium since there's a strong user preference for home care and ALFs - that level of care I'm willing to self-insure for. Wouldn't this policy remove me from that insurance pool?

It's reimbursement policy, but that's fine for a SNF.
Available in my state (MD)
Mass Mutual is rated AA+.
No rate increase in years.

Plus - it's shown as NOT gender-specific AND with the same discount for living with a family member for 3 years (my DD would have been an adult for 3 years in less than 10 days) that is provided to couples. Unlike some policies, NO requirement that the family member be of the same generation.

Any idea what this might cost a 64 yo, again for the Facility only option?.

Maybe 3 year coverage or 6 year coverage (the max). Longest elimination period (should be 180 days).

5% COL. (Not clear whether its compounded or simple)

$200 daily benefit.

Obviously, these can be adjusted depending on cost.

Thx
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Old 10-04-2017, 10:04 PM
 
Location: LTCShop.com
236 posts, read 113,100 times
Reputation: 151
Quote:
Originally Posted by EveryLady View Post
I just stumbled across this policy.

What do you think?

Mass Mutual MM-500-P. It offers a SNF only option, which I'd assumed did not exist. That would cover a tail-end worst-case scenario - hopefully at a relatively lower premium since there's a strong user preference for home care and ALFs - that level of care I'm willing to self-insure for. Wouldn't this policy remove me from that insurance pool?

It's reimbursement policy, but that's fine for a SNF.
Available in my state (MD)
Mass Mutual is rated AA+.
No rate increase in years.

Plus - it's shown as NOT gender-specific AND with the same discount for living with a family member for 3 years (my DD would have been an adult for 3 years in less than 10 days) that is provided to couples. Unlike some policies, NO requirement that the family member be of the same generation.

Any idea what this might cost a 64 yo, again for the Facility only option?.

Maybe 3 year coverage or 6 year coverage (the max). Longest elimination period (should be 180 days).

5% COL. (Not clear whether its compounded or simple)

$200 daily benefit.

Obviously, these can be adjusted depending on cost.

Thx


excellent policy.
great company.
most agents do NOT sell this policy because the company has very strict rules about who can sell it.
They've never had any rate increases on any of their LTCi policyholders.
unisex rates.
the facility only is about 20% less than the comprehensive.
5% compound is overpriced (IMHO).
The 6 year is an excellent value.

The cost will depend upon your health.
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Old 10-04-2017, 11:24 PM
 
3,072 posts, read 816,938 times
Reputation: 1704
Quote:
Originally Posted by LTCShop View Post
excellent policy.
great company.
most agents do NOT sell this policy because the company has very strict rules about who can sell it.
They've never had any rate increases on any of their LTCi policyholders.
unisex rates.
the facility only is about 20% less than the comprehensive.
5% compound is overpriced (IMHO).
The 6 year is an excellent value.

The cost will depend upon your health.
Thanks for the numbers you sent. I appreciate it.

A plus to pick up a 20% reduction moving to my projected utilization pattern but more would have been good since it's restricted to the least optimal setting.

It might be a tough call to move away from comprehensive for "only" 20%.

Still ... that's what I said I'm looking for.

That said, I've just read more and I'm now not quite certain what the current definition of SNF implies. It's increasingly described as an often temporary setting with various forms of ALFs seemingly now taking over more former "nursing home" functions. I'd figured they were somewhat equivalent, but with SNFs not as homelike (no pools or piano at dinner) plus offering additional nursing capabilities.

Maybe that's wrong today.

Here, I'm envisioning myself sandwiched in between patients on Medicare recovering from surgeries, injuries before they transition home and patients on Medicaid with no place else to go with most of the folks with LTCi now in some form of ALF, including memory care.

Perhaps this policy wouldn't even cover a patient unless they had a defined "medical" need like tube feeding - that extended beyond "custodial" care (maybe "advanced," but custodial nonetheless)?

No one in my family ever utilized a nursing home although a grandparent had nursing care at home and an aunt just entered an ALF after she and her daughter "flunked" family caregiving. Maybe I should write a post on the Caregiving Forum asking for advice here?

This is NOT easy.
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Old 10-05-2017, 07:30 AM
 
Location: LTCShop.com
236 posts, read 113,100 times
Reputation: 151
Quote:
Originally Posted by EveryLady View Post
Thanks for the numbers you sent. I appreciate it.

A plus to pick up a 20% reduction moving to my projected utilization pattern but more would have been good since it's restricted to the least optimal setting.

It might be a tough call to move away from comprehensive for "only" 20%.

Still ... that's what I said I'm looking for.

That said, I've just read more and I'm now not quite certain what the current definition of SNF implies. It's increasingly described as an often temporary setting with various forms of ALFs seemingly now taking over more former "nursing home" functions. I'd figured they were somewhat equivalent, but with SNFs not as homelike (no pools or piano at dinner) plus offering additional nursing capabilities.

Maybe that's wrong today.

Here, I'm envisioning myself sandwiched in between patients on Medicare recovering from surgeries, injuries before they transition home and patients on Medicaid with no place else to go with most of the folks with LTCi now in some form of ALF, including memory care.

Perhaps this policy wouldn't even cover a patient unless they had a defined "medical" need like tube feeding - that extended beyond "custodial" care (maybe "advanced," but custodial nonetheless)?

No one in my family ever utilized a nursing home although a grandparent had nursing care at home and an aunt just entered an ALF after she and her daughter "flunked" family caregiving. Maybe I should write a post on the Caregiving Forum asking for advice here?

This is NOT easy.

It's not a SNF-only policy.
It's a Facility-Only policy. Assisted living facilities are covered.
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Old 10-05-2017, 10:42 AM
 
3,072 posts, read 816,938 times
Reputation: 1704
Quote:
Originally Posted by LTCShop View Post
It's not a SNF-only policy.
It's a Facility-Only policy. Assisted living facilities are covered.
Thx. I could have saved myself some time if I'd looked more closely. Getting late. But that makes overall pricing that much better since ALFs less expensive than SNFs.

From general reading ... standalone life insurance and/or standalone LTCi reported as better individual options than hybrid policies. Hybrid policies incorporating life insurance benefits have lousy death benefits but better LTCi benefits. No interest in hybrids connected to annuities.

As I wrote earlier, I don't have any intrinsic objection to their being profitable for an insurance company if they better meet my desire for flexibility. Cash-in option - death benefit. (Nothing I saw online though said much about how flexible that actual LTCi benefit was although one schedule provided a LTCi benefit of only 2% annually. Not impressive.)

Lincoln MoneyGuard is one that I keep seeing discussed as a big seller, though disparaged for the opportunity costs.

THIS MassMutual LTCi policy meets goals of tail risk care (facility only) while - by not covering !!! - providing the flexibility I want for in-home care. My in-home costs should be much lower than average in an early-stage disability but then (alternatively) unsupportably high giving 24-7 nursing costs in this area.

Still ... are there any hybrid policies that might be competitive per my use scenario with the MassMutual?
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