Long Term Care Insurance in 2011

CassandraJanuary 30, 2011

At age 54 and single, I'm researching LTC to see whether it is a good idea for me. I've seen the past threads on this issue, but wanted to start a new, updated discussion. If anyone here has it, wishes they had it, or is currently looking into it, please join in! I'd especially like to be directed to sites that have good information or discussion on the subject. My employer offers Genworth and MedAmerica Simplicity (the latter significantly more expensive than the former). My big question is whether to buy LTC now or wait for a few years. I'm in very good health right now.

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The earlier you buy it, the cheaper it is.
(at least that was the case for us...)

    Bookmark   January 30, 2011 at 7:28PM
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IMHO, 'in good health' is the best time to buy LTC, especially if you are over 50, an age where you may be more apt to be diagnosed with something that will drive up the cost, i.e. diabetes, high blood pressure, cancer, etc. YMMV

    Bookmark   January 31, 2011 at 5:00PM
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Two of my co-workers bought LTC a couple of years ago when they were each in their early 50s and both in good health. The company they bought it though is a big-name compnany and the premiums seemed reasonable to them.

Since then their premiums were raised so much that they both have dropped the LTC. I don't know the amounts that the premiums were raised, but I know it was some crazy amount - like 40% or more. This was just in the first few years of having the LTC. Neither thought it was worth it to keep paying for it at that extrememly high price, and both lost all the money they'd already paid into it because they cancelled it.

Apparently, and they both researched, there is no such thing as an LTC policy where the insurance company can't raise your premiums by however much they want.

If anyone knows to the contrary, I'd like to hear about it. Because I'm 52 and in good health, but I just can't see buying into something now if I won't be able to continue to afford it.

    Bookmark   February 2, 2011 at 3:01PM
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We purchased LTC insurance (separate policies) in our late 40's. Our program is sponsored by the state pension fund, so the carrier cannot leave the business until the pension managers find a replacement carrier. Class-wide premium increases are allowed, as they are on every policy and type of insurance.

You always have a risk with individual insurance. Many homeowners have had whopping price increases and declination of new coverage whenever there's a major catastrophe. That's the downside of a public, competitive marketplace. LTC is no different.

All I would say is, don't limit yourself to just your employer's offerings. There are several groups that specialize in LTC insurance, so Google and contact them if you're really interested. Yes, you may get stuck on a few mailing or call lists, but those aren't a big deal and easy to remove yourself from, or just toss the envelopes. Don't let it stop you.

Genworth is good, I don't know anything about MedAmerica, and Northwestern Mutual is also a very solid company who has publicly announced they intend to remain in the LTC marketplace.

Always contact your State Insurance Dept. - often the info is on the web - to look at the number of complaints a company has had to report. Also remember that it's worth investing WHO the company actually is - Conseco, one of the very worst LTC insurers ever, wrote LTC policies under six different subsidiaries. The Net can be your best friend, if you are willing to take the time to track info down to the source. Don't expect someone else to do all the work for you, and any time you talk to an agent, always rely on what is WRITTEN, not what you think someone said or implied. Verbal and phone assurances are worth the paper they are written on, and no more.

Why did we buy this complex, risky product? Because our calculations determined that the extended disability of one spouse would quickly use up the assets of the survivor. And under no scenario would our assets cover BOTH of us being disabled and needing home health care, for longer than a year's time.

When life expectancy continues to increase, and the ability of the medical profession to keep you alive but with a lousy quality of life also continues to progress, it was not a hard decision to buy sooner rather than later.

We budgeted for price increases. If you understand how insurance actuarial stats work, it was clear to me that the Boomers would live longer, thus requiring care of which our current medical system does not cover the cost. The old "my family will take care of me" attitude is inadequate, especially when families are scattered around the globe, many Boomers (like us) chose not to have any children, and the Millennials are having a hard enough time surviving without having elderly Boomers hang around their necks like a 200-lb albatross, looking for charity.

For very comprehensive policies - unlimited benefit period, 3 month elimination, 5% compounded inflation benefit, 50% home healthcare (for new policies it's now 100% of benefit), 2 ADL disability definition:

Me, example #1: Age 48, female when policy was purchased. Premiums slightly over $1200/yr. Premiums are now $2K/yr, after two class premium increases.

I used to pull LTC quotes as part of my job, working in a CFP's office. My best guess is that if I went to apply for a policy now, age 60, overweight and pre-diabetic, an equivalent new policy premium would be approx $3500.

DH, example #2: Age 46, high BP under moderate treatment. Premium started at $800/yr, now $1700/yr.

At age 50, when the policy was 4 yrs old, DH suffered a serious haemorrhagic stroke. Fortunately he has recovered almost totally. However, no insurer would have written ANY policy on him for at least 5 yrs after the stroke. And they would definitely rate him as Standard, not Preferred, possibly Class 2 or even Class 3 risk, for being (now) age 59, slightly overweight, pre-diabetic, previous stroke, family history of heart attacks and diabetes (every male in his family died of cardiac failure before age 70).

My best guess is that his premium for an equivalent policy would now be in the $5K to $7K annual range.

So was buying LTC insurance 11 yrs ago a smart decision? Yes, for us it was. The total of all premiums we have paid are still less than the cost for six months for ONE of us in a nicer licensed care facility.

You might find the link below useful. I like SmartMoney, which is the magazine arm of the same holding company as the Wall St. Journal.

Here is a link that might be useful: SmartMoney LTC calculators

    Bookmark   February 3, 2011 at 2:46PM
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Sorry, I noticed an error in my rather long posting above. Where it reads:
>>And under no scenario would our assets cover BOTH of us being disabled and needing home health care, for longer than a year's time. >>

That should have been:
"And under no scenario would our assets cover BOTH of us being disabled and needing home health care or a nursing home, for longer than 4 years."

    Bookmark   February 3, 2011 at 10:59PM
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We purchased LTC ins three years ago (I was 63 and DH was 59). I wish I'd purchased it before turning 60. His premium is quite a bit lower than mine.

My big question is whether to buy LTC now or wait for a few years.

If you decide to wait, I'd encourage you to not wait til you are 60.

    Bookmark   February 28, 2011 at 11:36AM
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14 years ago my wife and I struggled with caring for aging parents who both went into the nursing home for a considerable length of time. The stay in the home until they passed significantly depleted their savings and caused financial stress, and ultimately this convinced us (at ages 50 and 49) to purchase long term care insurance. We bought ours from MedAmerica and have never regretted our decision (we are now 63 and 64). If our children ever do see us in the same situation as our parents, at least they will not have to worry about finances as we did. We would strongly recommend long term care insurance, but be sure to purchase inflation protection with it. The sooner you can get it the less expensive the premiums will be (ours have remained a total of $150/month for both of us) - had we waited it would have been much more expensive. Keep in mind that while you get it for yourself, it will ultimately also benefit the loved ones around you if you need to use it. Good luck.

    Bookmark   February 28, 2011 at 4:08PM
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