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Helpful for whom? It appears your aunt had sufficient resources to pay for her care up until that last month, so how would she have benefited from an LTC policy? Or did her family have to sacrifice to pay for her care?
These aren't idle questions, every family's situation is different. Would your aunt have been able to afford the premium, or would she have had to sacrifice to pay it?
biscuitmom you raise a valid question. Whom would have benefited? For one the insurance company would have had some income but it also would have paid out a large sum. Since she was widowed her children if she had any would have benefited with a larger sum of inheritance. As I see the story she depleted savings and so there was less left over.
Everyone's situation is not the same as we all know. I am not a huge fan of insurance companies but they do have their uses. For home and auto they are a must. Lenders require it. Life insurance is vital for families to protect income for future in the event of accidental death. LTC is one in a grey area that is a great discussion here.
My thinking on long term care is that I am riding the fence still but think it could be valuable in our situation. My reasoning here is although I have fairly good income coming in retirement and more than average savings in taxable accounts, those are our play money funds to do things we want to do. So should something unforeseen happen this could preserve those funds somewhat. If we had to tap into them for one the other would be left at risk.
As I see it in our case I am leaning towards a middle approach in which I do not try to cover the entire amount with the insurance having enough income and savings to make up the difference while not depleting savings for one leaving the other at risk. Since we are still in our 50's it might be a good time to start.
I'm always on guard for confirmation bias. That is, seeking information that supports my thinking and avoids information that does not. With that in mind, what's wrong with these conclusions?
It's a personal decision that cannot be reduced to mere numbers. None of us are "average". Read some of the posts in the Caregiving Forum before making your decision. The burden placed on care givers is brutal. I do not want my children assuming that burden.
I purchased LTCi in 2006. It costs me $167/month for three years of coverage equating to $219,000 plus 5% compounded "interest". The compounded interest has thus far kept up with long term care costs. Knock on wood, I have not yet had an increase in premiums.
It was sheer luck that I purchased the policy long before I learned I had a significant risk of developing Alzheimer's and Macular Degeneration. If I had learned of these risks BEFORE the purchase, no insurance company on earth would have issued me a policy.
If there comes a point when I can no longer afford the premiums and a reduction in benefits is not acceptable, I'll suck it up and let the policy lapse. Like my home owner's insurance, I am grateful that I have not yet had to file a claim.
BTW, LTCi, both the product and the issuers, are much more strictly regulated than they were years ago. I'm not concerned that the company will fail to meet its contractual obligation.
I looked at it and decided to self-insure. I'm single so I don't need to protect a spouse from financial ruin. My father had vascular dementia and ended up in a dementia lockdown. My mom is in assisted living with a dementia problem and doesn't remember a conversation from 5 minutes ago. That's where I project to be 20 or 25 years from now unless there is a medical miracle. Assuming I defer collecting Social Security until age 70, my Social Security check will cover half of an assisted living monthly bill and my Medicare/supplemental Medicare premiums. I have the assets to cover the other 50% for a very long time. At the point where I'm in a nursing home for more than 90 days, I won't care if my house is sold to pay the bill.
I think a lot of eldercare will be automated and that will keep my in my house longer than is possible today and knock much of the cost out of geriatric care. I figure that by the time I get there, cars will be self-driving. Take-out food delivery will be fully automated. Routine medical monitoring like blood/urine/blood pressure/pulse/ekg will be done at home. I'll likely be able to stay at home indefinitely with some supervision by an internet-based eldercare service. I'll have video cameras scattered around the house that feed software that keeps an eye on me. The eldercare service will have a tracker on my smartphone. It will make sure I take my medications. It will trigger human intervention if the proverbial "I've fallen and I can't get up" happens.
if i was single i wouldn't give an ltc plan a 2nd thought . but being married is a different world . last thing we want to do is to get forced into a situation like my father had where he impoverished his wife .
Used to work in the health insurance reinsurance biz. Next group over were the long term care guys. In the biz, at the high level where I worked, LTC was considered a schlock product, similar to cancer policies.
The guys used to joke about the people selling LTC even more than the folks that purchase them.
Yes, there is some statistical chance you will fit the narrow scenario where your policy will pay something, but not likely
As I recall, many if not all policies have a period for which services are used but for which benefits were not paid, before the benefit cut in. The problem is when this so called waiting period is taken into account and average time in LTC eligible period are compared, and then chances of entering LTC to begin with are overlaid, the chance for a positive ROI is just about nil.
Sorry I don't remember the more technical terms, but I am 100% certain of two things.
First, not one person in the LTC shop had the product, and two, the guys schlepping it on poor old Joe Publc were held in very low regard by the other insurance executives.
I hated the health care business so I hope something positive has happened and I wish you all well with your policies. I just worry about the product.
LLN,
Many of the largest, most respected, insurance companies in the country sell long-term care insurance including State Farm, Mutual of Omaha, New York Life, Northwestern Mutual, Massachusetts Mutual, John Hancock, Thrivent Financial, and Transamerica.
This year nearly 300,000 people will make claims on their long-term care insurance policies and receive about $10 Billion in cash.
The federal government offers long-term care insurance to its employees and retirees. And the federal government gives tax deductions to every citizen to encourage the purchase of long-term care insurance.
Nearly every state government offers long-term care insurance to its employees and retirees. 30 states offer state income tax deductions or income tax credits to encourage the purchase of long-term care insurance.
Most of the Fortune 500 companies offer long-term care insurance to their employees and retirees.
Nearly every leading university in the country offers long-term care insurance as a benefit to their faculty, employees and retirees.
And 43 states have passed landmark legislation creating a special type of long-term care insurance called "Partnership Policies". These states have designed these “Partnership Programs†to encourage the middle-class to purchase an amount of long-term care insurance that is equal to their assets. If their long-term care insurance policy runs out of benefits they can apply for Medicaid to pay for their care and all of their assets would be protected from Medicaid “spend down†and Medicaid “estate recoveryâ€.
If long-term care insurance is a “scamâ€, as you’re suggesting, what is it that you know that the leaders of our state and federal governments, academic leaders and corporate leaders do not know?
I joined because that's the only way to answer questions, right?
I'm licensed in 46 states but the statement I made is true for all 50 states.
Policies that were sold in the 90's and up to about 2005 are having claims that are about twice as high as the insurers projected. That is why the insurance companies have been able to get the rate increases approved by the regulators.
In order to prevent rate increases on policies that are purchased today, insurance regulators do NOT allow any policy purchased today to use the old pricing assumptions.
Now that’s good news and that’s bad news. The bad news is that a policy purchased today costs more than a similar policy that was purchased 10 years ago.
The good news is that since today’s policies are priced more conservatively they are less likely to have a premium increase.
A policy purchased today in Texas has a very low probability of a rate increase compared to the policies purchased 10+ years ago which had rate increases as high as 75%. Texas has stricter pricing requirements on the new policies available for sale today.
Scott
P.S. The rate increase that Texas approved at 75% for Allianz was higher than any other state approved for that same product. Other states approved much smaller increases. If I was a TX resident I would either buy one of the long term care policies that has premiums that are guaranteed to never go up or a policy that is paid up in 10 years (which means your premiums stop after 10 years and you can't have a rate increase after the 10th year.)
Last edited by LTCShop; 10-11-2015 at 04:54 PM..
Reason: to add the P.S. about the rate increase
One thing you need to look at is family history of dementia/Alzheimers, which is about the only reason I'd even consider some kind of LTC coverage, as there is a family history of it (dad & GM). My widowed aunt came down with Alzheimers in 2000 at age 68, entered an ALF in 2000, and stayed there for 7 years ($4K/mo x 85 mo = $340,000), until even the ALF memory care wing could no longer keep her once she lost her ability to walk. She eventually was taken to her daughters for a month, then died in hospice. So in her case, LTC insurance would have been helpful. Alzheimers is a progressive disease, but I've known several other people who have lived with it even longer than my aunt.
As for myself, I've always said I'm never living in a nursing home or ever being dependent on anyone for care...my LTC insurance would be jumping in front of a bus . However, things can happen suddenly that won't even allow that option. Still can't bring myself to spend another $200+/mo on something I hope I'll never use, however. Thus LLN's post makes me feel a little better about my lack of future planning.
Most people overestimate the cost of long-term care insurance. The average long-term care insurance premium is $128 per month (including those policies that have had premium increases). A 62 year old male can purchase a quarter million dollars of long-term care insurance for $123.46 per month (Source: LTCInstantQuote). A couple, in their mid-fifties, can share over a half million dollars of long-term care insurance for about $115 per month per person.
you got that right . anyone who says that is the last insurance premium hike on an ltc policy is either selling them or smoking something they shouldn't .
It's because the regulations have changed.
Policies purchased today are priced higher than the policies that have had the premium increases.
With the exception of New York, most policies purchased since 2005 have NOT had any rate increases.
You can see the rate increase history of any company selling policies today at this link:
ltcfacts
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. However, things can happen suddenly that won't even allow that option. Still can't bring myself to spend another $200+/mo on something I hope I'll never use, however. Thus LLN's post makes me feel a little better about my lack of future planning.
