long term care insurance vs disability insurance

[samuel77]

Hello

My question has two parts and undoubtedly more detail will be needed.The first is whether I should consider switching from the DI policy to a ong term care policy whose flat-level inflation-adjusted payment would be about $300-$325 per month. The LTC policy would be for a current payout of $200 (community care)/$100 daily (home care) for an unlimited amount. An unadjusted policy would be $100 per month.

My question is a bit complex. I am in my late 50s, in good health and itness, and I have DI that I have privately held since age 40. It has a 6 month waiting period, pays until age 65 irrespective of other sources,like SSI, and pays for partial employment in my field. It was not a evel payment type, but has leveled out at $230 per month. A monthly payout,if I am disabled, would currently equal about two-thirds of my pre-tax income. In addition, I and my wife have substantial life insurance, savings, pensions, and have no children. We plan on retiring in 5 years.

The original insurance agent suggested that if I had enough savings,pension and SSI that maybe I did not need it, but he was not ncouraging a change. The insurance company, NML, was not really forthcoming with my request for advice or more informative statistics than they and everyone else posts. The second part has only to do with the DI policy. Since 1) I currently have half a year of sick time, which can be followed by State SDI coverage, 2)I would probably be pensioned off before that, given my employer's recent practice, and 3) my wife can handle the house mortgage on her own, does it still make sense, given my current good health and fitness, to keep up the DI until retirement (in 5 yrs, though possibly until age 65).

Can anyone help with this and/or point me to a better source of statistics and health probabilities? Do I need to go to some sort of consultant?
Please help me

[katwoman]

Here's a link to a long term care insurance forum. Just a friendly reminder that it's full of insurance brokers but then again that can be a good thing considering your circumstances.

Index

[ilr58]

What is your disability insurance policy's definition of being disabled? (Own occupation, any occupation, modified own occupation, etc.)

[disneysteve]

Very interesting question. I've thought about when I wouldn't need life insurance anymore, but I've never given any thought to if there would be a time when I wouldn't need my disability insurance. I guess I always figured that as long as I was working because we needed my income I would need to maintain the protection of my DI policy.

I think there is a big difference between LTC and DI. One provides income replacement. The other just helps pay medical costs, so I don't think you can choose one or the other. Also keep in mind that if you become disabled, your spouse might need to stop work or cut back in order to help care for you, which makes your DI that much more vital to have.

I'll keep thinking, but it seems to me that as long as you are working and need your income, you need to maintain your DI. When you reach a point where you can afford to retire but continue to work anyway, then you can probably drop the DI.

[defcon]

At your age LTC is much more likely to be useful to you. If it is a one or the other choice you should consider the cost of waiting to get LTC. The difference in your premiums would be relatively minor from today until about 63 but unless your policy has a conversion feature, and I do not think NML does, then you are also risking an adverse change in health.

What I tell clients is that insurance is based entirely on need and that prioritizing needs is step one of a plan. If you have 6 months of sick time plus an income that would cover immediate bills then I would say LTC would be a bigger need than di, but if you have that much cushion in income I would say you should look at getting the LTC and decreasing but not canceling your di benefit until you hit 62 or so and Social Security retirement income would be a choice as well.

A question about
"flat-level inflation-adjusted payment would be about $300-$325 per month"
The rate on those policies are level but not guaranteed level. LTC policies fall under health insurance and carry the same rate guarantees. The best companies Genworth, Hancock, Allianz & MedAmerica have never raised rates on in house written policies in their history and the first three are large enough to keep things that way on size alone.

Or you could just go get a MedAmerica policy that pays an indemnity benefit, so if your di were extensive enough to qualify for LTC benefits they pay you a cash benefit regardless of your bills or needs.

Email me if you want more info and I will even point you to another agency to buy if it will give you faith that all advice I provide is impartial and unbiased.