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What is the current conventional thinking regarding Long-Term Care Insurance? Can you reach a point of wealth that you no longer need to carry LTC? The premiums start out small and increase over time. By then, your wealth should have increased, so does it make financial sense to continue paying the premiums?
it never really pays most of us to try to self insure.
why ? because to act as an insurance company you need to invest like one .
most of us can’t afford to have a huge chunk of money pulled out of the income generation pool to sit in a fixed income pool so it is there if needed .
i was going to self insure until we were featured in a story many many years ago in money magazine .
their team of pros pointed out that for just a fraction of the yearly gains staying invested we can get an actual policy .
they were correct.
our attorney says most of his cases are the self insurers .
the stay at home spouse realizes that they did nothing to really prepare for self insuring and that they can be impoverished if things go on to long.
most who self insure do so in words not action and so when the spouse realizes the money generating the stay at home spouses income can take a huge hit they go in to panic mode.
the catch 22 is the less you have the more devastated the stay at home spouse can be hit
Last edited by mathjak107; 09-18-2023 at 03:39 AM..
$165,000 coverage with 5% inflation growth provision is $9575 for a couple who are both 65 years old. Based on the healthcare rates they show in the article, $165,000 would provide coverage for 45 months of assisted living, or 24 months of nursing home coverage. I assume the assisted living rate is for the base care level. Additional care would be extra.
What is the current conventional thinking regarding Long-Term Care Insurance? Can you reach a point of wealth that you no longer need to carry LTC? The premiums start out small and increase over time. By then, your wealth should have increased, so does it make financial sense to continue paying the premiums?
I stopped my LTC insurance many years ago, when the premiums increased to what I considered was an absurd level. I have my home, nearly paid off, and a somewhat healthy portfolio that I have no need to touch. That is my LTC insurance. I have no spouse or anyone else that depends on me for support.
LTC premiums typically increase dramatically over time. Some LTC companies may not be around when you need them to pay later in life. CCRCs are a good alternative for those who can afford them. There are likely to be other options available in the future with an aging population.
My mom has been in assisted living, and now memory care. The total time for both now is nearly four years. She does have a LTC policy which helps tremendously. That benefit plus her SS had been covering the cost, although that's no longer true after this year's rate increase.
I wouldn't mind carrying some LTC insurance, but there's really no way to plan. How much could the premium increase over the next 20 years? 2x? 5x? 10x? There seems no way to guess, and I'm loath to pay into a policy for years and then end up having to abandon it late in life.
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IMO, there should be a way for married people to legally separate their assets without getting divorced. Then, for example, if I needed LTC my half of the assets would be fair game, but I wouldn't have to worry about my wife being left in a financial bind. Is there a way to accomplish this?
What is the current conventional thinking regarding Long-Term Care Insurance? Can you reach a point of wealth that you no longer need to carry LTC? The premiums start out small and increase over time. By then, your wealth should have increased, so does it make financial sense to continue paying the premiums?
Yes, you continue paying for it. If you're wealthy enough to think you don't need it, then you're wealthy enough to keep paying for it, right?
I'm self insuring until the money runs out.
When it does...it does.
Given the length of MOST nursing home stays...I'm good.
I suspect a number of LTCI companies are going to be in a bind as people age and live longer. They will be forced to pay more and more out. Some of these companies likely will not survive; even if they do premiums are likely to escalate to the point that many will not be able to continue to pay. If I was going to do LTC, it would only be with an insurance company that does business in a number of areas and only with one that has very high ratings (ie., Comdex score).
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