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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.
I was talking to a LTC insurance company recently, and I was told that in the traditional plan (not whole life or universal life with an LTC rider) that the increase percentages are set by the state you live in. I don't know what those numbers would be at the moment, but if it's set by the state it might be to control them so they don't get unaffordable. Of course, what is affordable to one person might be out of the range for someone else.
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?
No, not really. If you have enough wealth that having to pay for long-term care costs out of your own pocket doesn't significantly impact your retirement plans, then getting coverage doesn't sound vital. People forget that those insurance premiums add up over time. So if you have the wealth, you would be paying for a policy that if you had a claimable event, it wouldn't financially matter if you had LTC insurance or not.
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).
Companies that wrote these policies years ago are trying to get out of them. A relative of mine who turned 65 years of age this year, got a letter with a policy surrender offer from his LTC insurance company. They are offering to pay him like $30K as a lump sum payment to end his policy. He reviewed his original policy and doesn't even mention this is an option.
That is for sure. Several years ago, a distant family member (in his 20's) was teaching his martial arts class and suffered a paralyzing accident. He is in a wheelchair and paralyzed from the neck down. I can't even imagine the costs that the family has had to bear. The parents have become his caregivers, and when they can no longer manage it, his siblings will take over.
When you are young and healthy you can't imagine getting diabetes, arthritis, heart problems, etc., where you have difficulty taking care of yourself without assistance. The idea of saving money and getting insurance seems like a limit on your lifestyle. But one day, if you are lucky, you will get old and then you will be so glad you did plan for these things. I know some people combat these things by living more healthy, but as I have heard seniors say "getting old isn't for sissies."
I was talking to a LTC insurance company recently, and I was told that in the traditional plan (not whole life or universal life with an LTC rider) that the increase percentages are set by the state you live in. I don't know what those numbers would be at the moment, but if it's set by the state it might be to control them so they don't get unaffordable. Of course, what is affordable to one person might be out of the range for someone else.
the increases are approved by the state not set by the state ….each company’s request is different
our plan got a 68% ncrease approved and is speed over a 3 year period , increasing more and more each year
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,101 posts, read 7,571,203 times
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Quote:
Originally Posted by hikernut
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.
snip..
this is what we envision: LTCi to cover a part. SS to cover a part. and IRA & other personal retirement funds to cover a part.
You may want to review the policy.
Our policies have a waiver of premium if collecting the LTC benefit.
YPMV
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,101 posts, read 7,571,203 times
Reputation: 9835
Quote:
Originally Posted by hikernut
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?
There are: Trusts, IRA's, Annuities. Single ownership of accounts. But the issue is how much will the spouse commit personal assets to the spouse in LTC. or If the spouse signs away the assets in a lien upon those personal assets. That is my understanding and how we set up our plans. Best planning is still a future guess.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,101 posts, read 7,571,203 times
Reputation: 9835
Quote:
Originally Posted by hikernut
...snip
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.
snip...
It's insurance. You are buying a risk management product not an asset.
I kinda look at the issue (any insurance) is that one either, Assume all monetary risk for that hazard or you "buy" insurance for that monetary risk.
We don't expect to see any premium refunds for Life Insurance, Car Insurance, or Property-Personal Liability Insurance.
Someone with under $50k in assets (there are actually millions of them) doesn't need it. Not enough assets to protect. And most millionaires can afford to pay two years of care, especially if they have high Social Security payouts. For the rest it's a gamble. Only about 1/8 of those over 75 need it for over two years.
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