New wrinkle affecting Long Term Care Insurance Policies

[mathjak107]

Those policies most illustrated with huge jumps were under priced earlier policies that were brought up to the correct levels . As you said this was in illinoise. Like ny , illinoise is one of 2 states offering total asset protection once the insurance runs out . Perhaps these under priced plans were up graded to partnership plans .that would be a whole different product.

You can't find any company in insurance or even the financial world that will not get online complaining about something or issues . Ihave been with my auto insurer for more than 40 years and had claims and only good experiences .yet you can go to any consumer sites and find those with issues .

I read our policy and it is quite clear when they pay . For what and the terms . It is written in simple english too..

Ltc is no different than any other insurance . I pay for coverage now and am protected now by this years premium . I don't look at it as my premiums being banked for future use anymore than i look at the more than 100 thousand dollars i gave to geico for my auto and home insurance over the 40 years or life insurance as paying for future use . It covers us now.
Odds of dying young are so slim yet we don't complain about paying life insurance premiums for term life.

which by the time we are in a higher odds range of needing it we stopped having it or can no longer keep the policy.

At the end of the day most policies are priced so you will pay in one years costs for a snf by the time you get

in to the sweet spot for the highest odds at the projected costs. That is not a bad deal since it covers in home care and ours does assisted living too

[TuborgP]

Originally Posted by SouthernSusana

LTC is not what it used to be for new buyers.

I looked at it a couple of years ago. One major company (Genworth) was issuing it with an automatic premium increase equal to the rise in costs in nursing homes. In other words, it was an inflation rider that protected them. The company he recommended gives you a pool of money, sure, but you can only draw 50% of it each month for the 3 years its covers. That means you are responsible for 50% of the cost. It was another major company, but I forget which one.

I am a school teacher who earns $62,000 a year at age 64. After paying 7.5% toward my pension and paying my other expenses, there is only so much money to go around. A LTC policy would have cost me about $3000 (lump sum) per year at age 61. That is $3000 that I have to take from somewhere. "Other retirement savings" are all I have. By the way, my pension has no COL increases unless the state passes one. They haven't in 10 years. That makes "Other retirement savings" very important.

So that's where I chose to put my $$$. And I honestly put them there. I save $6500 a year in a Roth and $6000 in a 557 (or whatever the numbers are). I didn't start saving for retirement until I divorced in my 40s so I got a really late start.

But that's all I can do. I will try not to spend the "Other retirement savings" and save it toward LTC expenses if I can. But it's nice to know it's there if I need it for survival.

Medicaid is fine with me if it comes to that. I won't go into a nursing home until there is no other choice. I had an aunt who lived with her elderly brother until he died. She was 95, and he was 90. If you manage to take care of it all by yourself, your relatives really won't interfere.

Have you priced Long Term Care insurance thru NEA? Pricing not as great as years ago but might be better than shopping as a individual. They have multiple companies they work with now.

[runswithscissors]

Originally Posted by mathjak107

Those policies most illustrated with huge jumps were under priced earlier policies that were brought up to the correct levels . As you said this was in illinoise. Like ny , illinoise is one of 2 states offering total asset protection once the insurance runs out . Perhaps these under priced plans were up graded to partnership plans .that would be a whole different product.

You can't find any company in insurance or even the financial world that will not get online complaining about something or issues . Ihave been with my auto insurer for more than 40 years and had claims and only good experiences .yet you can go to any consumer sites and find those with issues .

I read our policy and it is quite clear when they pay . For what and the terms . It is written in simple english too..

Ltc is no different than any other insurance . I pay for coverage now and am protected now by this years premium . I don't look at it as my premiums being banked for future use anymore than i look at the more than 100 thousand dollars i gave to geico for my auto and home insurance over the 40 years or life insurance as paying for future use . It covers us now.
Odds of dying young are so slim yet we don't complain about paying life insurance premiums for term life.

which by the time we are in a higher odds range of needing it we stopped having it or can no longer keep the policy.

At the end of the day most policies are priced so you will pay in one years costs for a snf by the time you get

in to the sweet spot for the highest odds at the projected costs. That is not a bad deal since it covers in home care and ours does assisted living too

Don't be so defensive.

Obviously you can read negative reviews on any site.

My point was the comments independently stating about the 50% increase due to compounding over years. And that they were hit all at once instead of incrementally every year. I think it's actually more that those individuals purchased their policies before 2003 when laws were enacted about increases.

https://www.ltcshop.com/long-term-ca...ases/illinois/

No, Indiana's the other state with Total Asset Protection.

But I'm glad you know your policy so well that it will never happen to you. That would suck. Perhaps this potential can be offset with the carriers enjoying improved higher interest rates in the future economy - that may have made it difficult for the insurer to generate a return on premium investments in the past.

[mathjak107]

Insurance carriers do not see the same low returns we do . They see much higher returns because those who die or don't collect pay for those who do. So the insurers are only slightly hurt by low rates . On the other hand low rates do not happen in a vacuum . They are low because inflation is low and expenses and costs insurers have to pay are also held lower .

Imagine 30 of us buying a 30 year bond . We each get 3% a year , that is a pretty poor return we would all agree.

But if we had a deal that if one of us died each year the bond goes to the survivors who are left , at the end of 30 years that last survivor's return is not 3%, a year it is muliplied by 30x

That is how insurer mortality credits work. So they are able to multiply low rates by many times over which we can't do as individuals

[LTCShop]

Originally Posted by TuborgP

Have you priced Long Term Care insurance thru NEA? Pricing not as great as years ago but might be better than shopping as a individual. They have multiple companies they work with now.

Be careful of “assocation discounts” when buying long-term care insurance.

A few months ago, a couple went to my website and filled out my “Online Quote Request Form”. Several years ago, they had purchased a “discounted association policy” through the wife’s professional association and now they wanted to compare rates.

The insurer that was endorsed by the association gave a 10% discount to all the members of the association, and their spouses, who purchased a policy. Because of the 10% discount, they assumed that it was a good deal, and they signed up right away without taking the time to compare other policies.

Discounts are essentially intended to entice you to buy now without taking the time to shop around.

The policy offered by their association was a good policy. It had 5 years of benefits for each spouse, a 3% compound Inflation Benefit, and a starting Daily Benefit of $150.

If they’d taken the time to shop around, I could have gotten them a policy from a company with higher financial ratings and slightly better benefits, for about $900 per year less (per person).

They were paying almost twice what they needed to pay!

Don’t assume that your association has done the shopping for you!!!