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Old 02-22-2018, 07:36 AM
 
72,339 posts, read 72,289,871 times
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aig insurance was never at risk it was still solid in 2008 and required no money . aig ran in to problems in it's other divisions that were totally separate from the insurance end .

we were going to self insure but for all the reasons i have stated many times we were far better off taking that money that would have to be set a side , invested conservatively so it was always ready and intact , just invest it normally and pay the premium with a small piece of the gains on that money .

you need to protect that self insured money , it cannot and should not be part of the normal risk pool and that means low returns if it is to be kept safe for deployment at any age. it also can't be counted in your pool of money for generating an income as that can always be spent down generating an income under poor outcomes.

when we did the feature story with money magazine we were going to self insure . once they pointed out all the steps needed to properly self insure we realized they were right .

as our attorney says , his practice is dominated today with those supposedly self insuring once the stay at home spouse realizes they can be left impoverished and that money is just in the general pool .
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Old 02-22-2018, 07:56 AM
 
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Quote:
Originally Posted by mathjak107 View Post
aig insurance was never at risk it was still solid in 2008 and required no money . aig ran in to problems in it's other divisions that were totally separate from the insurance end .

we were going to self insure but for all the reasons i have stated many times we were far better off taking that money that would have to be set a side , invested conservatively so it was always ready and intact , just invest it normally and pay the premium with a small piece of the gains on that money .

you need to protect that self insured money , it cannot and should not be part of the normal risk pool and that means low returns if it is to be kept safe for deployment at any age. it also can't be counted in your pool of money for generating an income as that can always be spent down generating an income under poor outcomes.

when we did the feature story with money magazine we were going to self insure . once they pointed out all the steps needed to properly self insure we realized they were right .

as our attorney says , his practice is dominated today with those supposedly self insuring once the stay at home spouse realizes they can be left impoverished and that money is just in the general pool .
There IS risk in believing that LTC companies are 1. Not going to dramatically raise your premiums and 2. that many of these companies are going to remain financially sound when their original payout calculations were not based on people living to be as old as they are. As someone who is growing older, this is NOT the kind of thing I want to spend 1 minute worrying about no matter what the degree of risk is.
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Old 02-22-2018, 08:02 AM
 
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There is risk in everything . But i would bet the risk of the insurer leaving you with nothing is tiny compared to the ramifications of you trying to count on your self.

You can likely talk to any estate attorney and they will likely tell you that the bulk of their clients are those where one needs care and the other is scrambling where they were counting on self insuring and now want a better more solid plan with less risk that the stay at home can be impoverished.

It is not my intention to convince anyone to do anything if they want to self insure. But if you do it be aware of all the risks and especially the pitfalls of keeping it in the general risk pool
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Old 02-22-2018, 08:10 AM
 
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Originally Posted by mathjak107 View Post
There is risk in everything . But i would bet the risk of the insurer leaving you with nothing is tiny compared to the ramifications of you trying to count on your self
There IS risk even if the 'nothing' is 'something'. In making this and other investment decisions, I try to think about things that could potentially go wrong. If I was going to have a LTC policy, I would spread it out between several companies and plan for savings to supplement it.
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Old 02-22-2018, 08:13 AM
 
2,571 posts, read 1,044,503 times
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Quote:
Originally Posted by mathjak107 View Post
There is risk in everything . But i would bet the risk of the insurer leaving you with nothing is tiny compared to the ramifications of you trying to count on your self.

You can likely talk to any estate attorney and they will likely tell you that the bulk of their clients are those where one needs care and the other is scrambling where they were counting on self insuring and now want a better more solid plan with less risk that the stay at home can be impoverished.

It is not my intention to convince anyone to do anything if they want to self insure. But if you do it be aware of all the risks and especially the pitfalls of keeping it in the general risk pool
Most LTC policies are not going to pay the amount of income we will get from our annuity stream.
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Old 02-22-2018, 08:13 AM
 
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what we did is made a list of all the things we thought important enough to our financial health and stability and then decided on what was so important that we wanted to take steps to mitigate the damages we could see .

so pretty much that formed the base of the pyramid . then we decided how to invest our assets and that became the next layer of the pyramid .

then we looked at our income sources and that went on the pyramid .

at the end the assets and income were protected by the base below them while the assets above paid a bit for that protection .
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Old 02-22-2018, 08:17 AM
 
72,339 posts, read 72,289,871 times
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Originally Posted by Lizap View Post
Most LTC policies are not going to pay the amount of income we will get from our annuity stream.
only if you fork over a considerable amount of money for either an inflation adjusted annuity or even more dough for a bigger annuity to cover inflation if it is not .


that means a high rate of cash flow but a pretty poor roi .

at 5 or 6% cash flow rates you are getting back your own money for about 17 years without a penny of their money yet . it takes 17 years of payments roughly and you still are at zero roi .

most likely i can do way better investing normally and paying a premium . especially because of the 5% increase a year in policy coverage's .

policies are priced at about 1 years cost for a nursing home off in the age sweet spot . that is not a bad deal . ours is 3 years in a snf or 6 years assisted living or home care. but once the 3 years are up all assets are 100% protected as well as no income restrictions on the stay at home spouse if you want to just let medicaid fulfill their end of the deal .

the homes we looked in to all said they will take assignment if you are a paying patient for 2-3 years . like my other insurances i hope to never need it but we did mitigate a big negative factor out of the plan .

Last edited by mathjak107; 02-22-2018 at 08:27 AM..
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Old 02-22-2018, 08:27 AM
 
2,571 posts, read 1,044,503 times
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Originally Posted by mathjak107 View Post
only if you fork over a considerable amount of money for either an inflation adjusted annuity or even more dough for a bigger annuity to cover inflation if it is not .


that means a high rate of cash flow but a pretty poor roi .

at 5 or 6% cash flow rates you are getting back your own money for about 17 years without a penny of their money yet . it takes 17 years of payments roughly and you still are at zero roi .

most likely i can do way better investing normally and paying a premium . especially because of the 5% increase a year in policy coverage's .

policies are priced at about 1 years cost for a nursing home off in the age sweet spot . that is not a bad deal . ours is 3 years in a snf or 6 years assisted living or home care. but once the 3 years are up all assets are 100% protected as well as no income restrictions on the stay at home spouse if you want to just let medicaid fulfill their end of the deal .

the homes we looked in to all said they will take assignment if you are a paying patient for 2-3 years .
What you are missing is the money will be invested in the market in a well diversified portfolio and not annuitized until we are well into our 70s, maybe later. If you run the calculations, you will see the income generated can be substantial. We do dot have to worry about company solvency, policy limitations, or dramatically increased premiums.
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Old 02-22-2018, 08:32 AM
 
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I always get a chuckle out of these LTCi discussions because the arguments against getting the coverage invariably fall into one of two categories:

1. You shouldn't purchase LTCi because all the insurance companies are going to raise your rates dramatically over the years and you won't be able to afford your policy because they've underestimated the vast number of people who end up in nursing homes resulting in huge payouts for benefits;

or,

2. You shouldn't purchase LTCi because very few people ever end up in nursing homes and you'll be wasting your money.

Hmmmmm.... there seems to be a little contradiction in these arguments, don't you think, lol?
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Old 02-22-2018, 08:48 AM
 
Location: USA
6,229 posts, read 5,394,855 times
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Originally Posted by TNSLPPTSO13 View Post
Early death,whether natural or on purpose seems more and more like the best retirement plan.
I know some whom their retirement plan is the lottery.
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