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Mathjak though you are not paying a normal LTC policy and you have that partnership thing. So, not as high risk as what is now available. I cannot recite what you have previously written off the top of my head.
Most people who do this are attempting to protect assets so they can leave a legacy amount to children. So, isn't there a better way to do that? This seems akin to an annuity that everyone seems to hate. So, I am just wondering why people would not just drop these policies if given the opportunity. Agree with Lizap there is no end in sight to the premiums.
We have LTCi, although our financial advisor says we don’t need it as our asset level. For us, legacy is a non consideration. Yes, there are some similarities between LTCi and a deferred annuity but there are considerable differences as well. On one hand, a deferred annuity will pay a set amount after the deferral period unconditionally whereas LTCi policies will not. On the other hand, the payments are considerably higher.
What my wife and I have (individually) pays $430 per day with a policy max above 1.6M (basically 10 years at that payoff rate), if I remember right. That amounts to above 156+K per year. Premiums are not cheap (between 5-6K per year). Say we pay that premium (with some growth) for 20-25 years when we need it. The total, let’s say, is 150K in Net Present Value (making room for premium growth).
If you buy a QLAC for 150K today, the payoff (less than 15K per year), while good, will not even come remotely close. It is more than 10 times less. So, as an instrument - LTCi serves a very different purpose. 1.65M dollar is needed for an annuity starting in 25 years for a 64 year old male to get 156K/year. So, there is an order of magnitude difference. LTCi is much more of an insurance against really bad outcome (catastrophic event) in the late stage of life. The annuity also has an insurance component to it but is much more of an income instrument. The leverage involved in LTCi is much greater.
I don’t care if anyone buys LTCi or not but find the comparison to annuity a bit shallow. For me, it is an insurance that I hope not to need.
connecticut,new york and florida courts have been supporting a spouses right to say no i am not paying .
of course that typically just gets you sued .
but courts in these three states have been up holding the connecticut courts ruling that medicaid can’t impoverish the stay at home spouse and must push for a reasonable settlement as to what can be paid towards a stay .
of course the judge stopped short of saying what that reasonable amount should be as well as iftherecareincome restrictions on the stay at home spouse .
the connecticut judge ruled that he didn’t want the people of his state having a stay at home spouse impoverished and two people going on public assistance because we have a poor long term care system.
so while they likely are not happy with the agreement they get , many of the self insurers have been having attorneys reach settlements rather then risk it all .
but only three states support this view .
some can get a medicaid divorce although many states forbid those too . i know ours does
two very powerful laws here in ny have been upheld and according to our estate attorney who is one of the biggest in ny there are very very few medicaid divorces .
all court actions are now pretty much based on right of refusal .
our two laws that pretty much killed off medicaid divorce are :
(1) Section 5-311 of the General Obligation Law which provides that except as provided in Section 236 of the Domestic Relations Law, a husband and wife cannot contract to relieve either his or her liability to support the other in such a manner that he or she will become incapable of self support, and therefore likely to become a public charge; and
(2) Family Court Act Section 415 which provides that the spouse or parent of a recipient of public assistance or care, or of a person liable to become in need thereof, or a patient in an institution in the department of mental hygiene if of sufficient ability, is responsible for the support of such a person. The Court has the discretion to require any such person to contribute a fair and reasonable sum for such support (child up to 21 years of age).
also if it is eventually determined that a divorce is to be pursued, the divorce needs to satisfy all of the requirements of the Domestic Relations Law, such as establishing one of the requisite grounds for a divorce. This may be difficult to accomplish because of the illness or disability of one spouse
Some states have "no-fault" divorce in which there are only 2 grounds acceptable. 1) Irreconcilable differences, and 2) Permanent incapacity of one partner to make decisions. #2 used to read "permanent insanity", but that was changed. I told my ex that he should mark that box in our divorce because he was insane to want to divorce me. LOL
I have a plan through my former employer. Premiums increased several times over the years, and I've taken a reduction in benefit once and taken the premium increase at least 3 times. I originally purchased in my early 50s, so my premium was tiny, and the increases haven't been that bad, even when my premium doubled. Last year I was notified there was a class-action lawsuit, and I had to choose either repayment of all premiums with cancellation of the policy, staying with the policy but getting a small refund of $1000 in premiums, or suing the policy holder (as a part of the class action) and taking whatever I could get as a member of the class. The idea was that they would find enough policyholders that would bail and then another company to take over the policies that remained. They were unable to find a buyer for the policies, so they had to cancel the whole lawsuit and I ended up with a refund of $1000K as my settlement, and a continuation of my policy. I would've taken the refund of the entire amount of my premiums, but when they told me how much I'd paid in over the years, it only amounted to about 2 months in a nursing home, so they are obligated to cover me as long as I keep up the payments that now have an upper limit on increases. Getting a refund of allmy premiums was piddly in comparison to the costs of care. I don't know how many policyholders remain, but I'm still covered for a reasonable daily limit. I don't expect the policy to pay for the entire cost, as I have pension and SS income to pay a good portion of it. I guess I'll roll my dice and let it ride.
Last edited by TheShadow; 01-28-2024 at 10:40 AM..
The typical 3 year coverage for a plain plan is about 1 years stay in premiums
One would need an annuity that pays out a rediculous amount since most are now not inflation adjusted
Ltc plans increase payout by 5% a year
See what an annuity cost that pays 130k today and double even 20 years from now
No way would most opt for that as coverage or afford to
Planning is far more difficult when a spouse is involved and needs to be supported as well
True and Mrs. MJ may be far better off with an annuity or two rather than trying to step into your shoes as an investor. But, if you carved off $1m for that it would involve you not taking an additional $40k per year (which over 2-3 years is another new car). I would question that logic from your wife's perspective.
True and Mrs. MJ may be far better off with an annuity or two rather than trying to step into your shoes as an investor. But, if you carved off $1m for that it would involve you not taking an additional $40k per year (which over 2-3 years is another new car). I would question that logic from your wife's perspective.
at one time she may have wanted an spia but our portfolio is so easy to manage she no longer feels a need for one…
it certainly isn’t a feeling of security issue anymore as it was when we started retirement .
we are higher then the day we retired with a lot less years to support then we did with more then we even started with.
she could stuff it in a mattress and be fine without giving it to an insurer and them handing it back over the next 11 years with zero return.
it would take to age 85 to get back her own money for no reason
Last edited by mathjak107; 01-28-2024 at 03:32 PM..
just ran it thru an inflation calculator ..it is exactly even at a cumulative 28.6% in inflation . so not bad..
not sure how it will net out tax wise but balance wise pretty even surprisingly since we live off it and bought the car
With a Lexus you should be able to do all the recommended services and run that thing 20 years. I have a 15-year-old Acura that I paid cash for and it averages $1,400 to do all the maintenance (including tires and brakes) and it runs the same as the day I bought it. Trading in and out of cars is nuts. For instance, Mogul says he drives surprisingly old cars. That's a lot of additional money to invest and no one (worth anything) gives a rats arse what you drive.. And, you basically have the same amazing car you originally purchased (for decades). There are exceptions (if you have ever visited the high end Auction cars in Monterey/Pebble Beach) because there are obviously investment vehicles. The old guy that lived on the 10 acres behind me until he died a year ago at 97 still had a vehicle where the headlamps were candles. They apparently had extra garages in addition the the garages at their combined houses. I would argue anyone buying a Subaru is not a "car guy" and "just a guy that spends money." I do like the idea of taking that car purchase and deducting it from your stock market earnings.
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I would question that logic from your wife's perspective.
