Long Term Care Insurance

[moneybags]

Do any of you have Long Term Care Insurance? What age should I be getting this? Any advice on policies, etc.?

[QuarterMillionMan]

You won't find any of this information online (believe me I tried). My insurance agent did this premium comparison of some the LTC insurers. I got my policy at age 45 (I'm currently 47, the same age at Disney Steve, lol). Some people have told me that I'm too young and should have waited until age 55 or higher. I like it because it gives me peace of mind and I'm grateful to be able to afford it and I'm locked in to that rate. The longer one waits to buy LTC the higher the premiums will be. My coverage has a daily benefit of $150 w/ 5% simple interest (see below), which is the bare minimum. Daily benefits can run as much as $300 or more but the premium will be higher as well. Nursing homes can easily top that amount w/specialized care so the more coverage one can afford the better it'll be.

[QuarterMillionMan]

I just wanted to add that the insurers are very selective in who they will issue a policy to. The industry as a whole (I believe) lost money and some insurers have even elected to discontinue some policies, John Hancock was one of them (I think). For my policy through Genworth prior to getting issued my policy I felt as though I had to jump through numerous hoops prior to approval. For one I was administered some type of memory test. I guess that the insurer won't issue a policy to someone who has memory impairments or diminished mental capacity (Alzheimers/Dementia) or may you have to pay a higher premium. In addition, I had to sign a release for Genworth to contact my physician and a release for a current list of my current and previous prescription medications. Genworth was very thorough and completed a comprehensive medical background check prior to issuing the policy.

[SeanH]

http://whitecoatinvestor.com/long-term-care-insurance/

[disneysteve]

(I'm currently 47, the same age at Disney Steve, lol).

Actually, I turned 49 last month.

[JustBill]

Another recent article worth reading on LTCi.

http://www.reuters.com/article/2013/08/15/us-column-miller-idUSBRE9700XR20130815

[Like2Plan]

I like it because it gives me peace of mind and I'm grateful to be able to afford it and I'm locked in to that rate. The longer one waits to buy LTC the higher the premiums will be.

I thought that, too, so it was a rude awakening when I found out LTC insurance premiums can be raised Link to Long-Term-Care Rate Hikes Loom

A couple of years ago, I had the choice of paying a slightly higher premium or keeping the premium about the same and getting slightly lower inflation protection (I think 4% instead of 5%).
My DH received notice last year that the company that had his LTC insurance was asking for a 40% increase with the state insurance commissioner. The company was encouraging all the policy holders to switch to another company. We looked at the new company and the rate was higher than the proposed increase. It turns out his existing LTC insurance company had asked for a blanket increase for all the states in which they sold these policies and apparently the rate increase was not approved in our state (because there was no change in the premium).

[KTP]

Is that $1200 premium monthly or yearly?

If monthly, I am going with a Smith and Wesson at a fraction of the cost!

[QuarterMillionMan]

The premium is paid annually. Smith & Wesson, good one (lol).

[asmom]

http://whitecoatinvestor.com/long-term-care-insurance/

That article was not very thorough. He advised against LTCi based on the need for a NH. Most people with LTC insurance I've encountered use it to pay for extra help in the home. That is the real value of LTCi; not for NH placement.

[QuarterMillionMan]

I have spoken to my source and she said would be delighted to add any pertinent LTC information or answer any questions others might have, that is as long as the moderators don't mind it. If it cannot be done that is fine and I won't pass along the information. If it can be done then more will be forthcoming.



From my source, I have a mountain of new information. Literally, changes are happening every week right now. I wrote another article to which you and others will have access as of November 1. More are forthcoming. Otherwise, I will be sending out another e-blast in a week or so; and you are welcome to pass along that information, if you'd like.

If nothing else, forewarn your readers about CalPERS. It will be available again to municipal and state employees and educators the end of this year. There is a plethora of negative press about CalPERS on the Internet and every indication the company is still not financially sound. It will continue to not be a legitimate insurance company and therefore cannot be monitored or regulated by the Department of Insurance. So, it will have the right to impose rate increases at will. We in the industry have no idea right now what the new rates will be upon the company's re-launching.

[jIM_Ohio]

LTCi is a good discussion, and make sure you separate fact from fiction.

First is 70% of us statistically will need some form of long term care. The semantics is in "some form". Read up on this.

Issue #2 is everyone gets LTC, the question is who pays for it, and who makes the decisions?

Issue #3 is most people can get most of their long term care in the home. Not a nursing home, in their own home, or wherever it is that they live.

Investigate those facts above, then realize most of the "sales pitch" is in the why.

Make sure you educate yourself on additional issues-
There is pure LTCi
There is LTC available as a rider on annuities
There is LTC available as a rider on life insurance

Each have their effectiveness in some financial situations. Watch the sales pitches if life insurance is the only thing being pitched.

Next step, read up on acts of daily living (ADL) these are what trigger insurance claims. Medicare will not pay for LTC, but Medicaid will. Know the rules in your state (what the adls are and what costs of the service are).

Do you know difference between medicare and medicaid? In this process you will learn who makes the decisions about your care. Then ask yourself what same care would be in your own home? For example if it would cost a health aid $50/hour for two hours to help you bath and get dressed, and cook a meal (3 of the ADLs), then ask yourself what $100/day of LTC would cost today, then add the 5% or 7% inflation rider to this.

Also ask yourself if it is worth protecting your estate over LTC issues.

$100/day times 365 days times 3 years is $110k over 3 years (rounded). Do you have $110,000 you want your kids to inherit or give to a charity? Medicaid would likely make you sell your house before it paid for care, so realize this is assets, not just investable assets. There is also a spouse test (meaning if spouse still has to live in house while you receive care).

Could be you want $100/day for both spouses and 3 years, which is $220k exemption from medicaid (this is called a state partnership). The annuities and life insurance with LTC riders usually are not partnership compliant, pure LTCi is.

You could also work on this backwards... if you want kids to inherit $250k, and you know medicaid testing in your state is 7 years, divide 7*365 into the $250k ($97 per day). This would exempt $250k from medicaid for kids and benefit would pay maximum of $97 per day for 7 years.

Most people are in nursing homes an average of about 18 months of their life
Most stays are much less than 3 years
The worst case would be something like Parkinsons or Alzeimers (a slow debilitating disease) and LTC is for chronic care (chronic meaning condition will last for life and not improve). Non chronic issues which use physical therapy are covered under medicare.

[trishaastorga]

Affordable Long Term Care

Very Informative information...

Those of us who are considering Mexico as a lower-cost retirement destination will find it reassuring to know there are a growing number of assisted living and nursing care facility options south of the border. Many of these offer high-quality and affordable care with all the other benefits of living in Mexico: good weather, beautiful places to live in and visit, fresh wholesome food, and caring people.

With costs for long-term care in the US running between $3000 and $7000 per month, the majority of Americans might have to face a horrible reality: they may not be able to afford the care they need. There are currently no federal government programs that offer money for long-term nursing care and none is anticipated as part of the Affordable Care Act. Contrast this with $1000 to $1700 per month (typical fees) for assisted living and nursing care in Mexico. For example Residencia Lourdes Pacifica is located in Ensenada, it is just a short drive from San Diego and the facility sits beachfront for your loved one to enjoy the spectacular view. Their price is $1700 per month and includes all cost (except medication,diapers and personal items) and is guarantee to never increase. At these fee levels care is affordable to many more people, even those who may have to survive solely on Social Security benefits.

Mexican culture is very different from that of the US with respect to attitudes about elderly care. For example the regard for elders is present everywhere. The warmth and level of genuine caring is surprising to many US citizens who are accustomed to treatment dispensed within only institutional settings.

While assisted living and nursing care are not part of the local Mexican culture, the number of facilities designed for the needs of foreigners—including the provision of English-speaking staff members, awareness of the cultural differences such as food preferences, holidays and English television, magazines, etc.—are increasing across Mexico.

While the choice to move to Mexico might seem daunting, the quality of local life and the first-class facilities being offered here—coupled with the high quality of personal care—end up surprising many skeptics, and even get some of them asking the age-old question, ‘why didn’t I think of this years ago’?

[BrianWeatherdonCFP]

Yes I certainly own Long Term Care Insurance and I bought it at age 56. PS: I also sell life insurances so keep my comments with that in mind. Living in Canada we seem to rely tremendously on what we believe the government will do to support our future; you and I both know that's just foolish. Moreover 85% of lifelong health expenses hit in the last 5 years of our lives, and health-costs rise 10-fold (that's 1000%) between age 65 and 80. Such is true both in Canada and U.S. so no one is getting an easy ride on these figures. POINT IS we need to provide for our future. LTCI is a wonderful thing to own because it pays money tax-free when we'll need it for our personal comfort, dignity, and care. Mine pays even if I stay at home.

On your question of when to buy it, possibly the cost/value would be 10-to-15 times better if I had bought this 15 years earlier. Oh I wish I had done so. But then, of course, life would have thrown a curve ball one way or the other ...and through a career change maybe I wouldn't have been able to afford it for awhile. Just saying, there's no point regretting the past.

SO ideally, today is the time to buy LTCI. You'll review the details with a licensed advisor whom you already know or whom your friends recommend ...and with proper diligence you will get the type of contract you feel is best, as soon as you're ready.
Best wishes....and stay well
BW

[iWilliams311]

Get LTCI while you're young

There's really definite age to get LTCI, but a lot of advisers on the topic recommend that you get it while you're young. Insurance companies start selling long-term care insurance policies to people 18 years to age 72, but of course there are already a lot of buyers who do not health-qualify at around their 50s. So, I guess the right way to think about it is buy while you are young because that's the time you also have a higher chance of health-qualifying for the coverage.