Quote:
Originally Posted by Robyn55
But no one should ever forget that LTC insurance isn't any different than auto or homeowners' insurance. Your rates with a company can go up dramatically over a period of a few years. Your insurer can go out of business. Yada yada yada. Also - LTC insurance usually pays a specific dollar amount of benefits which is usually less than those who spend the most on LTC will spend (and more than those who spend the least pay). Since the OP is in his/her 40's - I suggest as an alternative simply putting X into an account labeled LTC insurance account. A specific amount every year. Invest it in something like bond/stock index funds. By age 80 (when most people wind up needing LTC care if they ever need it) - it should be a tidy amount of money. And more reliable than any insurance policy. LTC insurance is very actuarial (X dollars for Y years mostly likely to be paid out Z years in the future) - and it is pretty easy to get the same benefits from a personal investment account as opposed to buying the insurance if one starts fairly early. Robyn
|
Your rates with a company can go up dramatically over a period of a few years.
Robyn, you live in Florida. Most things have improved over the past 20 years, including long-term care insurance. Long-term care policies that are available for sale today have much different rules and regulations than policies that were sold years ago.
Most of the policies that have had premium increases have been policies that were sold before the "Rate Stability Regulation" was approved in that state.
Florida passed their “Rate Stability Regulation” in January 2003 and it became effective for all policies purchased after February 28th, 2003. Nearly all of the premium increases on Florida LTC policies have been on policies purchased BEFORE March 1st, 2003.
Everyone who has purchased a long-term care insurance policy approved by the state of Florida since March 1st, 2003 is protected by these strict rules regarding rate increases.
13 insurance companies sell nearly all of the long-term care policies in Florida. Of these top 13 companies, only one of those 13 companies has had a rate increase on policies sold since March 1st, 2003. The other 12 have not had any rate increases on any of the policies they’ve sold since the regulation took effect.
Long-Term Care Insurance Rate Increases Florida
Your insurer can go out of business.
As a lawyer, you should know that this rarely happens with large insurance companies, especially large mutual insurance companies. "National States" (the one company you were able to find that went bankrupt after the mortgage crisis) was never a strong company. To suggest that companies like Mutual of Omaha, Mass Mutual, New York Life, Transamerica, are likely to go out of business in our lifetimes, is ludicrous. You're smarter than that.
And your reference to AIG "needing a bail out" is flat wrong. When AIG needed a bailout, it was NOT the AIG insurance companies that went bankrupt. The AIG insurance companies NEVER needed a bailout. The non-regulated part of AIG that sold non-regulated credit default swaps needed the bailout from the federal government. AIG ended up selling many of its insurance companies (which were all very profitable) in order to pay back all of the “bailout money” plus a profit for the federal government of about $22 billion.
https://goo.gl/7aDgq7 (Read the Big Short, if you haven't already).
Also - LTC insurance usually pays a specific dollar amount of benefits which is usually less than those who spend the most on LTC will spend
So? If I have an LTCi policy that pays $200 per day and my care costs $250 per day, it was a good thing to own the LTCi policy. I'd rather withdraw only $50 per day from my savings to make up the difference, rather than the full $250 per day. Wouldn't you?
and it is pretty easy to get the same benefits from a personal investment account as opposed to buying the insurance if one starts fairly early.
If I knew that I (or my wife) was going to need surgery 10 years from now, I wouldn't own medical insurance, Robyn. I would save the $18,000 per year I pay in medical insurance premiums and invest it. And then when I got cancer or needed that open heart surgery, the money would be there and I'd pay it.
The problem is that I don't know when it will happen. That's why I pay those exorbitant medical insurance premiums every month.
The same is true with long term care. You think that long term care insurance is insurance for a "future event" that is decades away. Mathjak sees it as something that could happen at anytime. And so do I.
Suggesting to the OP to invest for her long term care expenses is assuming that nothing is going to happen to her or her hubbie for decades.
For about $90 per month per person, they could each have over a half million in LTCi benefits from one of the oldest insurance companies in the country. (hint: the company was founded during the Civil War).
And, it's a company that has NEVER had any premium increases on any of their LTCi policyholders.
You're obviously very intelligent. I suspect that your bias against LTC insurance is based upon reading headlines and not understanding the substance.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
. Robyn
