Long Term Care Insurance

[alan1]

Long Term Care (LTC) Insurance is an insurance policy that one can purchase that will essentially pay for long term health needs such as if you need a home healthcare worker to assist or take care of you in old age, assisted living facilities or convalescent homes. I've been researching LTC insurance recently as an option to prevent the total decimation of my savings that I hope to bequeath to my children, or even worse, causing my children to pay for long term care were something to happen to me.


From what I've discovered so far, the younger one is when they purchase the policy, the lower the rate they can (sort of) lock into. Age 50's seems to be the optimal purchase time. I've crunched some numbers (based upon me being a smoker, I assumed the high end of the cost) and were I to purchase this year, pay every year, by the time I was 75 I'd have paid about $75,000 for a policy that would pay $150,000 in today's benefit with an annual 5% inflationary increase for future years which would be over $300,000 annual benefit at my 75 years of age.

Does anybody here have experience with LTC insurance? Either for themselves, or for a loved one that purchased it and used it?

 

[Mac1958]

Long Term Care (LTC) Insurance is an insurance policy that one can purchase that will essentially pay for long term health needs such as if you need a home healthcare worker to assist or take care of you in old age, assisted living facilities or convalescent homes. I've been researching LTC insurance recently as an option to prevent the total decimation of my savings that I hope to bequeath to my children, or even worse, causing my children to pay for long term care were something to happen to me.


From what I've discovered so far, the younger one is when they purchase the policy, the lower the rate they can (sort of) lock into. Age 50's seems to be the optimal purchase time. I've crunched some numbers (based upon me being a smoker, I assumed the high end of the cost) and were I to purchase this year, pay every year, by the time I was 75 I'd have paid about $75,000 for a policy that would pay $150,000 in today's benefit with an annual 5% inflationary increase for future years which would be over $300,000 annual benefit at my 75 years of age.

Does anybody here have experience with LTC insurance? Either for themselves, or for a loved one that purchased it and used it?

I'm a financial advisor and I have to keep licensed in LTC. You're right to look at it, few things can destroy wealth faster than having to pay for long term care.

What do you want to know?

.

 

[MeBelle]

Long Term Care (LTC) Insurance is an insurance policy that one can purchase that will essentially pay for long term health needs such as if you need a home healthcare worker to assist or take care of you in old age, assisted living facilities or convalescent homes. I've been researching LTC insurance recently as an option to prevent the total decimation of my savings that I hope to bequeath to my children, or even worse, causing my children to pay for long term care were something to happen to me.


From what I've discovered so far, the younger one is when they purchase the policy, the lower the rate they can (sort of) lock into. Age 50's seems to be the optimal purchase time. I've crunched some numbers (based upon me being a smoker, I assumed the high end of the cost) and were I to purchase this year, pay every year, by the time I was 75 I'd have paid about $75,000 for a policy that would pay $150,000 in today's benefit with an annual 5% inflationary increase for future years which would be over $300,000 annual benefit at my 75 years of age.

Does anybody here have experience with LTC insurance? Either for themselves, or for a loved one that purchased it and used it?

It really depends on your policy but here are some very rough 'calculations'.

Paying $75k out of pocket rather instead of purchasing insurance would get you about one year of care in a skilled facility. This is for median care.
If you're a cantankerous grouch they charge you double.

With policy, after its limit is reached, you would receive 30-60 days of Medicare for skilled care. Again median, depending on level of care needed. You would also pay a co-pay on Medicare.

After Medicare runs out you have to go live with EZ

Or go on Medicaid.

 

[alan1]

Long Term Care (LTC) Insurance is an insurance policy that one can purchase that will essentially pay for long term health needs such as if you need a home healthcare worker to assist or take care of you in old age, assisted living facilities or convalescent homes. I've been researching LTC insurance recently as an option to prevent the total decimation of my savings that I hope to bequeath to my children, or even worse, causing my children to pay for long term care were something to happen to me.


From what I've discovered so far, the younger one is when they purchase the policy, the lower the rate they can (sort of) lock into. Age 50's seems to be the optimal purchase time. I've crunched some numbers (based upon me being a smoker, I assumed the high end of the cost) and were I to purchase this year, pay every year, by the time I was 75 I'd have paid about $75,000 for a policy that would pay $150,000 in today's benefit with an annual 5% inflationary increase for future years which would be over $300,000 annual benefit at my 75 years of age.

Does anybody here have experience with LTC insurance? Either for themselves, or for a loved one that purchased it and used it?

I'm a financial advisor and I have to keep licensed in LTC. You're right to look at it, few things can destroy wealth faster than having to pay for long term care.

What do you want to know?

.

[MENTION=34298]Mac1958[/MENTION]

I'm curious about somebody actually collecting the insurance if/when needed. Sometimes, insurance companies can be difficult to collect from. How hard is it to make claims and get them paid?

Suppose I am incapacitated to the point that I can't fill out claims paperwork, how difficult would it be for one of my children to handle the claims process?

Are claims paid directly to the care provider, or to the individual who then pays the care provider? Or, does that depend on the policy?

What kind of rate increases do you anticipate for long term care insurance? $2500 a year right now is affordable, but once I retire and am living off of my retirement investments and SS, I'd hate for that rate to hit something like $10-15k a year if I make it into my 70's or 80's without needing it before then. (Hopefully I'll never need it, but we don't normally purchase insurance because we hope something will happen that allows us to use it)

I mentioned a 5% annual increase in benefit. I got that number from the websites I've been visiting. Honestly, I think costs for long term care will increase more than 5% annually. Is it possible to secure a policy with a higher percentage increase in future benefit?

Some insurance companies that provided LTC have stopped adding new customers. Do you think that will be a continuing trend as the baby boomers age?

Thanks in advance for your assistance.

 

[Mac1958]

Long Term Care (LTC) Insurance is an insurance policy that one can purchase that will essentially pay for long term health needs such as if you need a home healthcare worker to assist or take care of you in old age, assisted living facilities or convalescent homes. I've been researching LTC insurance recently as an option to prevent the total decimation of my savings that I hope to bequeath to my children, or even worse, causing my children to pay for long term care were something to happen to me.


From what I've discovered so far, the younger one is when they purchase the policy, the lower the rate they can (sort of) lock into. Age 50's seems to be the optimal purchase time. I've crunched some numbers (based upon me being a smoker, I assumed the high end of the cost) and were I to purchase this year, pay every year, by the time I was 75 I'd have paid about $75,000 for a policy that would pay $150,000 in today's benefit with an annual 5% inflationary increase for future years which would be over $300,000 annual benefit at my 75 years of age.

Does anybody here have experience with LTC insurance? Either for themselves, or for a loved one that purchased it and used it?

I'm a financial advisor and I have to keep licensed in LTC. You're right to look at it, few things can destroy wealth faster than having to pay for long term care.

What do you want to know?

.

[MENTION=34298]Mac1958[/MENTION]

I'm curious about somebody actually collecting the insurance if/when needed. Sometimes, insurance companies can be difficult to collect from. How hard is it to make claims and get them paid?

Suppose I am incapacitated to the point that I can't fill out claims paperwork, how difficult would it be for one of my children to handle the claims process?

Are claims paid directly to the care provider, or to the individual who then pays the care provider? Or, does that depend on the policy?

What kind of rate increases do you anticipate for long term care insurance? $2500 a year right now is affordable, but once I retire and am living off of my retirement investments and SS, I'd hate for that rate to hit something like $10-15k a year if I make it into my 70's or 80's without needing it before then. (Hopefully I'll never need it, but we don't normally purchase insurance because we hope something will happen that allows us to use it)

I mentioned a 5% annual increase in benefit. I got that number from the websites I've been visiting. Honestly, I think costs for long term care will increase more than 5% annually. Is it possible to secure a policy with a higher percentage increase in future benefit?

Some insurance companies that provided LTC have stopped adding new customers. Do you think that will be a continuing trend as the baby boomers age?

Thanks in advance for your assistance.

First, a physician needs to verify to the insurance company that you cannot perform 2 ADL's (Activities of Daily Living): Bathing, eating, dressing, transferring (like from wheelchair to bed), continence, toileting. That's the trigger that makes you eligible, and doctors are all well aware of how that works. Now, to be sure, the insurance company is gonna verify that this is true before they start paying, and all paperwork has to pretty much be perfect. But they do pay.

You definitely want to alert your children about the policy. It's no tougher for them to get the claims done. Many people who are 60+ also put important information like that on their fridges.

Yes, the method of payment of benefit will depend upon the plan and the insurer, so be sure that's one of your questions when talking with an insurance broker so you know what to expect.

Rate increases can be a real bitch. If you're paying $2500 a year, don't be surprised to see them go up 15%. So you want to go with an insurer with a decent track record of rate increases. It might be worth a few more dollars up front to go with one who won't cram big increases down your throat later.

Another option is a "limited pay" policy, wherein you just make payments for 7 or 10 years. Yes, they will be higher, but cheaper in the long run, and you're less likely to be whipped around by rate increases.

I'm not aware of any inflation riders that are higher than 5% compounded. You'll find that such a rider adds a ton to the premium, but you pretty much have to have it.

That last question is a good one. Some insurers have gotten out of the LTC space, but if they do they are still committed to the contract. I could go on forever on this. All in all, I think LTC has now been around long enough to have it pegged a little better in terms of actuarial guesses.

Two more things:

Make sure you speak with a broker who handles many companies, and make sure that Genworth and Mutual of Omaha are included, their plans are good and their premiums are usually the best or close to it, at least where I live.

Also, there's now a couple of companies that I know of (maybe more) that are offering "living benefits" with their term life insurance, the cheapest kind of life insurance. TransAmerica is one, AGLA (American General) is another. This means that if you experience a chronic illness, critical illness or terminal illness you can literally access some of the face value of the policy. They just write you a check for you to use as needed. It's also triggered by the 2 ADL's mentioned above. I think AGLA has a permanent policy that does the same thing.

Let me know if you have any other questions.

.

 

[alan1]

Thanks.

[MENTION=34298]Mac1958[/MENTION]

I forgot to ask, do you think age 50's is the right time to secure such insurance? (Earlier than 50's has passed for me)
Also, what do you think is a "smart" length of LTC benefit? I ask that because I imagine that most people that end up needing LTC usually don't need it for long term. Once one is that decrepit, they probably usually die in under 5-7 years

Can you elaborate on this,

Another option is a "limited pay" policy, wherein you just make payments for 7 or 10 years. Yes, they will be higher, but cheaper in the long run, and you're less likely to be whipped around by rate increases.

 

[alan1]

Long Term Care (LTC) Insurance is an insurance policy that one can purchase that will essentially pay for long term health needs such as if you need a home healthcare worker to assist or take care of you in old age, assisted living facilities or convalescent homes. I've been researching LTC insurance recently as an option to prevent the total decimation of my savings that I hope to bequeath to my children, or even worse, causing my children to pay for long term care were something to happen to me.


From what I've discovered so far, the younger one is when they purchase the policy, the lower the rate they can (sort of) lock into. Age 50's seems to be the optimal purchase time. I've crunched some numbers (based upon me being a smoker, I assumed the high end of the cost) and were I to purchase this year, pay every year, by the time I was 75 I'd have paid about $75,000 for a policy that would pay $150,000 in today's benefit with an annual 5% inflationary increase for future years which would be over $300,000 annual benefit at my 75 years of age.

Does anybody here have experience with LTC insurance? Either for themselves, or for a loved one that purchased it and used it?

It really depends on your policy but here are some very rough 'calculations'.

Paying $75k out of pocket rather instead of purchasing insurance would get you about one year of care in a skilled facility. This is for median care.
If you're a cantankerous grouch they charge you double.

With policy, after its limit is reached, you would receive 30-60 days of Medicare for skilled care. Again median, depending on level of care needed. You would also pay a co-pay on Medicare.

After Medicare runs out you have to go live with EZ

Or go on Medicaid.

I'm pretty sure I'll be a cantankerous grouch in my old age.

I hate paying for insurance. It's like this,
Here, let me give you money for something that I hope never happens and I hope I never need to recoup.
I'm the guy the insurance companies love. In 20 years I've never made a claim on my homeowners insurance. In 30+ years I've exceeded my deductible on car insurance only once and that was when I was 17. In 25+ years I've exceeded my medical insurance deductible only once and that was when my 2nd child was born.
I pay for insurance as a hedge against catastrophe.

If EZ wont have me, can I come live with you?

 

[Mac1958]

Thanks.

[MENTION=34298]Mac1958[/MENTION]

I forgot to ask, do you think age 50's is the right time to secure such insurance? (Earlier than 50's has passed for me)
Also, what do you think is a "smart" length of LTC benefit? I ask that because I imagine that most people that end up needing LTC usually don't need it for long term. Once one is that decrepit, they probably usually die in under 5-7 years

Can you elaborate on this,

Another option is a "limited pay" policy, wherein you just make payments for 7 or 10 years. Yes, they will be higher, but cheaper in the long run, and you're less likely to be whipped around by rate increases.

Yes, mid 50's are a good time to start. I saw somewhere that around 40% of people needing long term care services are under the age of 65.

The average stay in a nursing home is something like 2.3 years, so I would go with a 3-5 year benefit period. Of course, the longer the benefit period the higher the premiums, and lifetime benefits really jack up the premiums.

The "limited pay" option is offered by some LTC companies. Instead of lifetime premiums like you mentioned, you only make premium payments for 7 to 10 years, then your policy is "paid up" and you don't have to make them again. But of course, those premiums will be higher. Now I have not done one of these, but just as a wild guess/example if your lifetime premiums were $225 a month for life, they might be $325 a month for 10 years. Just like having a 15-year mortgage instead of a 30-year mortgage. You'd have to ask your insurance person about that, but I would look into it.

.

 

[wilmaoliver]

I do agree with Alan here that the best time to purchase long-term care insurance is when you're in your 50's. The reason behind this is pretty obvious. Insurance companies give affordable rates to people who are younger and healthy. However, you need to understand that the said insurance product isn't for everyone. Some might only need long term care for a short period of time that self-insuring and government programs are enough to cover their expenses. Those who will need care for an extended period of time will greatly benefit from this product. Before purchasing, it's best to assess your needs first in order to make sure that ltc insurance is a worthy investment.

Considering buying a private insurance is actually a must these days since 70% of the older population who are 65 and above will most likely require long-term care. Paying for this type of care can exhaust youre entire savings if you haven't planned for this properly. To help you understand what long term care insurance brings on the table, here are some resources you can look into:

longtermcare.gov/costs-how-to-pay/what-is-long-term-care-insurance/

ltcoptions.com/long-term-care-insurance/

aaltci.org/long-term-care-insurance/

 

[carthymc9]

Many long-term care insurance policies have limits on how long or how much they will pay. Some policies will pay the costs of your long-term care for two to five years, while other insurance companies offer policies that will pay your long-term care costs for as long as you live—no matter how much it costs. But there are very few that have no such limits.

Long-term care insurance policies reimburse policyholders a daily amount (up to a pre-selected limit) for services to assist them with activities of daily living such as bathing, dressing, or eating. You can select a range of care options and benefits that allow you to get the services you need, where you need them.

The cost of your long-term care policy is based on:

How old you are when you buy the policy
The maximum amount that a policy will pay per day
The maximum number of days (years) that a policy will pay
The maximum amount per day times the number of days determines the lifetime maximum amount that the policy will pay.

 

[strollingbones]

my mother did not purchase her 'genworth' policy till she was in her 70s.....i think genworth may be the largest provider of this type of care...the policies have a pay out limit...her policy paid out so much then stopped...we reached the pay out after 3.5 years.....up till then it paid 4 k a month...to get the policy one must pass a small interview...i am not sure if there is a medical examine or not....the policy is high....i think mom paid about 5 k a year for it...the policy paid to the assisted living....

 

[strollingbones]

if you or a loved one gets the policy beware of this....as people age..they resent paying that high price....i had to literally trick my mother into signing papers....well not trick..she got where if i put them yellow arrows on it..she would sign...but as her memory went..she decided she did not want this policy....i had it set up on an auto plan so she would see the withdrawal but not realize what it was....once a policy is non paid...they will send out another nurse to do another interview and assessment.....you do not want that....each year they will send out a nurse to assess the situation and see if there has been any improvement....there never was

 

[strollingbones]

i will be happy to answer any questions i can.....i would say 50 is way too young to go for this policy...consider 5 k a year.....in your 50s? then you are really betting against yourself....

ask questions in pm please...i dont do the @ thing

 

[strollingbones]

another thing...i have no idea how they came to paying just the 4 k.....i was up to my ass in gators and i was just happy to find out she had the 4 k coming in....they paid out to the last dollar...

 

[MeBelle]

Long Term Care (LTC) Insurance is an insurance policy that one can purchase that will essentially pay for long term health needs such as if you need a home healthcare worker to assist or take care of you in old age, assisted living facilities or convalescent homes. I've been researching LTC insurance recently as an option to prevent the total decimation of my savings that I hope to bequeath to my children, or even worse, causing my children to pay for long term care were something to happen to me.


From what I've discovered so far, the younger one is when they purchase the policy, the lower the rate they can (sort of) lock into. Age 50's seems to be the optimal purchase time. I've crunched some numbers (based upon me being a smoker, I assumed the high end of the cost) and were I to purchase this year, pay every year, by the time I was 75 I'd have paid about $75,000 for a policy that would pay $150,000 in today's benefit with an annual 5% inflationary increase for future years which would be over $300,000 annual benefit at my 75 years of age.

Does anybody here have experience with LTC insurance? Either for themselves, or for a loved one that purchased it and used it?

It really depends on your policy but here are some very rough 'calculations'.

Paying $75k out of pocket rather instead of purchasing insurance would get you about one year of care in a skilled facility. This is for median care.
If you're a cantankerous grouch they charge you double.

With policy, after its limit is reached, you would receive 30-60 days of Medicare for skilled care. Again median, depending on level of care needed. You would also pay a co-pay on Medicare.

After Medicare runs out you have to go live with EZ

Or go on Medicaid.

I'm pretty sure I'll be a cantankerous grouch in my old age.

I hate paying for insurance. It's like this,
Here, let me give you money for something that I hope never happens and I hope I never need to recoup.
I'm the guy the insurance companies love. In 20 years I've never made a claim on my homeowners insurance. In 30+ years I've exceeded my deductible on car insurance only once and that was when I was 17. In 25+ years I've exceeded my medical insurance deductible only once and that was when my 2nd child was born.
I pay for insurance as a hedge against catastrophe.

If EZ wont have me, can I come live with you?

But of course! You'll have your very own doghouse out back

 

[MHunterB]

Depending on where (geographically) one lives - it may be a better bet to retire to a life care retirement community: the difference between a buy-in for 'continuing' and for 'life' care at the same place might be only about that 75K in premiums! (Assuming you've got the rest of the buy-in and sufficient income/assets to be approved financially)

And NO, they're not necessarily any more expensive than the 'non-life care' CCRC's.....they tend to be religious-based AND to have some hefty endowments, which is probably why. The places where our Moms are have been extremely responsive to the needs of the 'nonstandard' religious among them and not 'too churchy' for the nonreligious residents (YMMV: those are Episcopalian and Methodist run)

Currently both our mothers are in retirement communities, both in 'nursing' care, both need total care. One estate is being depleted at a rate of close to 10K/month: the other is actually *growing* and has been for a few years.

The difference is the life care contract. Unfortunately it's the Mom who knows what's going on who has the 'pay as you go' contract - but at 85 when she had a catastrophic event and was left requiring total care, she had about $250K of LTC, and the community offered us the option of a refund on the life care contract (another $75K) so she could use the LTC . I think they were going by the statistics and trying to do what was likely to be best for her. We do get a 10% discount on the monthly bill, but it's been difficult watching that balance go down.

At least we know they will never make her leave even if she runs out of money!


"Life care" is a subset of "continuing care" - all life care communities are 'CCRC's (continuing care retirement communities), but NOT all CCRC's are life care. The for-profit ones, the 'chains', do offer nursing /dementia care IFF you pay for it - and many of them will not take Medicare.

Especially if you're interested in places in the Eastern part of the US, feel free to PM me and I can tell you a little about the options. I'm NOT a 'professional', just been a 'personal money manager' here for 40 years and have been looking at CCRC's for life care the past couple of years. If nothing else, I can help you realize what kinds of questions to start asking.....

I'm NOT knocking LTC: it worked well for our one Mom. I will add the caveat that they will ONLY pay for 'home health care' from agencies licensed appropriately - one needs to check with the LTC company to see who's on their list or risk not being reimbursed. And the paperwork is a PITA, but it can be done.

I was just suggesting that 'life care' may be another option for some. It appears to be most cost effective for couples - again, it depends on the individuals and the particular community.

Former military *officers* have some particular options which are quite attractive, too.......

 

[alan1]

It really depends on your policy but here are some very rough 'calculations'.

Paying $75k out of pocket rather instead of purchasing insurance would get you about one year of care in a skilled facility. This is for median care.
If you're a cantankerous grouch they charge you double.

With policy, after its limit is reached, you would receive 30-60 days of Medicare for skilled care. Again median, depending on level of care needed. You would also pay a co-pay on Medicare.

After Medicare runs out you have to go live with EZ

Or go on Medicaid.

I'm pretty sure I'll be a cantankerous grouch in my old age.

I hate paying for insurance. It's like this,
Here, let me give you money for something that I hope never happens and I hope I never need to recoup.
I'm the guy the insurance companies love. In 20 years I've never made a claim on my homeowners insurance. In 30+ years I've exceeded my deductible on car insurance only once and that was when I was 17. In 25+ years I've exceeded my medical insurance deductible only once and that was when my 2nd child was born.
I pay for insurance as a hedge against catastrophe.

If EZ wont have me, can I come live with you?

But of course! You'll have your very own doghouse out back

I thought you ran a cat house.

 

[alan1]

i will be happy to answer any questions i can.....i would say 50 is way too young to go for this policy...consider 5 k a year.....in your 50s? then you are really betting against yourself....

ask questions in pm please...i dont do the @ thing

One gets a lower rate in their 50's as opposed to their 60's or 70's.
Isn't all medical insurance betting against oneself?

 

[MeBelle]

I'm pretty sure I'll be a cantankerous grouch in my old age.

I hate paying for insurance. It's like this,
Here, let me give you money for something that I hope never happens and I hope I never need to recoup.
I'm the guy the insurance companies love. In 20 years I've never made a claim on my homeowners insurance. In 30+ years I've exceeded my deductible on car insurance only once and that was when I was 17. In 25+ years I've exceeded my medical insurance deductible only once and that was when my 2nd child was born.
I pay for insurance as a hedge against catastrophe.

If EZ wont have me, can I come live with you?

But of course! You'll have your very own doghouse out back

I thought you ran a cat house.

Well, yeah, lizards, rats and fish too.

Will build a doghouse just for you

 

[alan1]

But of course! You'll have your very own doghouse out back

I thought you ran a cat house.

Well, yeah, lizards, rats and fish too.

Will build a doghouse just for you

I feel special.