long term care insurance

[LivingAlmostLarge]

Anyone on here have LTC insurance? What did you buy? How much? What do you pay? How long? I have some out of necessity due to state law. I want to drop it but I was considering moving to a life insurance rider but my term life insurance is going to be up in 12 years, I am not sure what happens then.

[Bozzdivine]

I've been through a similar situation with LTC insurance, so I can totally relate. What I did was to convert my term life insurance to a permanent policy before it ended, which came with an LTC rider. This way, I maintained my life coverage and got the LTC benefits as well. Cost-wise, it's a bit more expensive, but the peace of mind it brings is worth it.

[kork13]

FWIW, I've heard that it's not really worthwhile to have LTC insurance until sometime in your 50s, and it's only in your late 50s that rates start to appreciably climb. Though if your state has a LTC requirement, that kinda sucks...

[disneysteve]

We do not have coverage. My mom does and finally started collecting from it last fall at the age of 92. She paid in tens of thousands of dollars in premiums. I think she bought the policy in her early 70s or late 60s maybe. At the time she started collecting, which waived her premiums, she was paying around 5K/year for the policy.

[LivingAlmostLarge]

yeah I think I'll cancel my plan

[LivingAlmostLarge]

i need to keep it so might switch plans

[disneysteve]

I have some out of necessity due to state law.

I didn't know LTC coverage was required anywhere. How does that work? At what age are folks required to get it? Are there affordable options or any type of state subsidies for people who can't afford it?

[Like2Plan]

Here is a link to the ongoing discussion for Washington state on Boglehears:
https://www.bogleheads.org/forum/vie...ewpost=7299206

It is a .58% payroll tax on income with a maximum lifetime LTC benefit of $36,500.

There was a period of time that you could be permanently exempted from the state tax if you went out and got your own LTC insurance. There was a court challenge that resulted in certain other groups being exempted from the tax. There is currently some debate if the folks who obtained LTC insurance before the deadline (and then cancelled the coverage) might have another look back and then be subject to the tax.

Also of note: only Washington residents can benefit from the trust. So, you could work in WA your whole career and then retire in another state you would be ineligible for benefits.

[Like2Plan]

FWIW, I've heard that it's not really worthwhile to have LTC insurance until sometime in your 50s, and it's only in your late 50s that rates start to appreciably climb. Though if your state has a LTC requirement, that kinda sucks...

The rates seem to climb even if you bought the coverage earlier. I am risk adverse, so DH and I have had LTC insurance for 19 years. Every few years, the insurance provider petitions the state insurance commissioner to increase the premiums.

LTC insurance was a fairly new product when we first obtained the coverage. We thought we’d be locking in the price by getting it earlier. For the first round of increases, the insurance provider claimed their underwriting department had misjudged how many people would let their policies lapse (they thought it would be a higher number), so they didn’t price the coverage properly. The next time it was the interest rates were too low. We are now on the third round of increases (they just gave a heads up that there will be an increase, but I don’t know how much).

Most of these policies have a maximum benefit amount that can be claimed. And, it isn’t like a coupon that you can claim- you have to meet qualifying conditions. And, you aren’t going to get anymore out of the policy even if the care facility charges more. So, I don’t understand how the insurance providers still haven’t figured out the pricing after 19 years. (Unless their model is to keep increasing the premiums until folks are forced to let the policy lapse. )

The rider on the life insurance policy sounds interesting.

[Thrif-t]

My employer had offered LTC as part of our benefits package. I bought a plan for my husband as alzheimers runs in his family. I prepaid my policy in 10 years. I started in 2008 and was done in 2018. I paid around 5k year so all in 50k. He gets 3 years in a nursing home, I forget the daily benefit (I think it was $250/day in 2008? but I had a 5% inflation rider so it goes up every year, and I had some kind of rider that if he died before 70, I'd get all my premium back. It's through John Hancock. I do know the daily benefit will not cover the whole stay, and we will most likely have to use some of his pension to pay also, but it was all I could afford and I felt something was better than nothing.

The plan had been to pay his policy off then get one of my own, but then my company discontinued the benefit and the the premiums were unaffordable on a policy for me.

[disneysteve]

Most of these policies have a maximum benefit amount that can be claimed. And, it isn’t like a coupon that you can claim- you have to meet qualifying conditions. And, you aren’t going to get anymore out of the policy even if the care facility charges more. So, I don’t understand how the insurance providers still haven’t figured out the pricing after 19 years. (Unless their model is to keep increasing the premiums until folks are forced to let the policy lapse. )

I think part of the problem is too many people are living longer lives and making more claims on these policies than predicted years ago. The 2020 census showed a dramatic increase in the number of people aged 65 and older. From 2010 to 2020, the 85-94 age group increased by 12.7% and the 95 and over group increased by 48.6%. Of course, that data predates COVID which took the lives of many older people, but still, there are a lot more elderly people today than ever before. That's bad for folks who sell LTC insurance.

The rider on the life insurance policy sounds interesting.

If that requires a whole life policy, it's not worth it. Whole life is a huge rip off and you certainly shouldn't get it just to get LTC coverage added to it.

[QuarterMillionMan]

282102.pdf (genworth.com)

Genworth's cost of care averages per state.

[QuarterMillionMan]

12 years ago at age 45, I started this LTC policy with an annual premium of $1240. Today, at age 57, I'm paying the same annual premium of $1240 but some where about 6 years ago they cut my benefit in half. So my daily benefit would be $120, instead of $240. And my lifetime benefit would be half of $262,800.

[QuarterMillionMan]

It is still a good policy and I'll keep paying the annual premiums but it's not fair how they cut my benefits in half.

[disneysteve]

It is still a good policy and I'll keep paying the annual premiums but it's not fair how they cut my benefits in half.

I suspect that at the time you were given the choice of a higher premium or a lower benefit and you chose the latter. On my mom’s policy, she has been given that option several times over the years.