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You're right they did give me the choice and I chose to keep the annual premium the same with the lower benefit. If I kept the benefits the same the annual premium would have doubled to $2500 from $1250 annually.
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To me it is still worth it. Not sure if this is correct but $120 a day x 1095 days max = $131,400. As of today I've had the policy for 12 years x $1250 a year = $15,000 is the total I've paid thusfar.Comment
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A 76 yr old guy showed me his LTC premiums for him ($1350/year) and his wife ($1150/year). She is 74 wih severe dementia and he no longer can care for her because she wanders off. I commended him on his astute decision to get those policies. And I pay $2700/year at 59, so his is a great deal.Comment
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I'm surprised it's so cheap. What is the max benefit? Does she qualify? How long did they pay for? How long have you been paying for and did you calculate if $2700 invested would have been a better deal? If you die and never use it then it'll be a waste. Versus investing that $2700 and the pot of money would be there for you.Originally posted by QuarterMillionMan View PostComment
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When I asked about the max benefit the 79 yr old man didn't know. She qualifies. He got their policy when he was 50 and working as a cop. I got my policy at 45 (59 now). At 58, I settled with Genworth's class action lawsuit where they issued me a $10,000 settlement by issuing me a check for $10,000, and $5000 max benefit. That $15,000 was the exact amount that I had paid in premiums at $1200 a year for ages 45 - 58. Now at age 59, the premium is $2700/year w/Mutual of Omaha. My max benefit is $10,000 a month for 3 years. Let's say I pay for 20 years x $2700 = $54,000 for 20 years (not counting increases in premiums which is wishful thinking but for ease of calculation) and if I need nursing home placement at age 79, it'll be worth it. But should I die at age 79 and never use the policy, then I'd be out $54,000. But if needed per year the max benefit covers $120,000 for a max of 3 years for a total max of $360,000 worth of skilled nursing care. Self investing would only net $54,000 over 20 years (plus or minus gains or loses and inflation).Comment
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But are you sure it's only $2700/year annually or will they increase it? I thought that it increases so it's not $54k. If you invested $2700 at 4% you'd have around $80,403 in 20 years. If you invested it at 6% it's $99k and you may last 3 years in a facility so you might not get your money's worth.
I think that the gamble with LTC is the increase in premium?Comment
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When and not if they raise premiums they usually give 2 options of either a premium increase or a lower benefit. I usually keep the premium the same and accept the lower benefit. Even with a lower benefit it is still more than I would be able to self-invest. It is more of a gamble to self-invest where you could run out of funds and run a risk of ruin. My uncle in Hawaii needed a nursing home for many years in the State's run Maluhia hospital on Hala Drive in Kalihi. The State put a lien on his home and when he died his cost for the nursing facility was $500,000. His sons had to sell his home in Waialae near Kahala mall and they are now renting as a result.Comment
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