Long term care insurance

patserFebruary 27, 2007

Has anyone researched and made a decision about buying this type of insurance for themselves? If you researched it and then said "no, thanks", what were the reasons you said no. If, on the other hand, you researched it and then bought it, which company did you go with and why did you go with that company?

DH and I are most likely in our peak earning years. The biggest fear we have for the future is the state of the medical industry as it applies to us. We're investigating any/all options for planning for all the unknowns that come with getting old (yes, it'll happen to us all unfortunately!!).

We've not yet spoke to an insurance professional but I wanted to sound you guys out first. Any thoughts will be much appreciated. Thanks.

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I'm in the process right now of researching LTC ins. I'm retired, in good health, but with a strong family history of Alzheimer's.

Based on my (limited) research so far, it seems like a good idea if:
You have a net worth of more than 200K but less than 1.5m (the reasoning is that if you have less than 200K, you can't afford it and should plan on using Medicaid), if your net worth is over 1.5m, you can afford to pay for LTC if needed.)
The recommended age to buy is between 60-65. The resoning here is that if you are much younger when you start buying, although the premiums will be lower, you will be paying premiums for a long,long time. If you are over 65, you may develop chronic illness that will preclude eligibility.

I'm still reading and collecting info. There is a representative coming out to talk to me on Thurs. I plan to learn as much as I can, then discuss it with my husband and financial planner before making a decision.

Here are some information resources I've located.

    Bookmark   February 27, 2007 at 9:35AM
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My life insurance policy is convertible in that it will pay for LTC until the benefit is exhausted. I don't remember if I have to initiate that or if I okayed that somewhere along the line. I probably should look ... Might want to check that option.

    Bookmark   February 27, 2007 at 9:49AM
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Also grappling with this...personally (I'm 54) and professionally (my work concerns all levels of placement and assistance for elderly and disabled).

Explore the impact of: 1)both of you buying policies, and 2) inflation protection, and 3) a very high deductable. All influence pricing significantly. Also assess carefully the strength and stability of the insurance company. LTC insurance is a relatively new product.

Another thing to explore is the flexibility of the policy for covering assisted living, family care/group home and hourly in home care vs. just the typical 'nursing home/rehabilitation center' stay. You don't want to spend all that money to find out the policy won't cover the level of services you want/need, or worse, the only level for which you can medically qualify.

(I predict a tightening of what will qualify for a "skilled nursing" stay, much as hospitals have evolved to discharge patients quickly to home or to subacute care. There's just gonna be too darn many of us needing care, and the private insurance sector will likely follow the lead of Medicaid - which will have to do *something* radical to address the spiraling tab for skilled nursing home care. My urban county under a state project is piloting a range of other interventions for elderly. You don't need a medical facility just because you wander or have incontinence or memory problems. Many people can do very well with alternative community-based residential support and care. Laws are already changing to mandate the 'least restrictive' placement and services. The payment authorization rules, first public then private, I predict will likely follow this trend.)

    Bookmark   February 27, 2007 at 11:23AM
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You've outlined my basic search strategy. I'm also very concerned about the possibility (or probability) of the premium rising as time goes on and pondering the effect on our currently comfortable retirement situation.

In my exploration of this, I've been reading about HSA's. Can one take out an HSA, put the max in until they are 65, then use the funds in the HSA to pay the LTC premiums?

Am I missing something here?

    Bookmark   February 27, 2007 at 11:48AM
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Hi, I appreciate all comments so far. I'm at work and can't write much but for Steve - what company is your policy with? We're looking, too, at HSA's but aren't sure yet if you can have one if you aren't working - whether it has to be funded through today's wages. Your idea, zone 8, about funding it now to pay premiums later is where we started with our medical future planning - if this type of funding is allowed.

Celticmoon, your questions are those we're dealing with, too. I have married friends who bought LTC but one thing they found out is that some policies specifically exclude events like Altzheimer's.

Here's real history that's part of my background. My dad passed away in 1989, leaving my mom who at that time needed in the home care for MS and leaving some money for all aspects of her future. In 1990 my mom moved into a nursing home as a private pay patient. Fast forward to 2003 when the funds ran out and my mom was still hanging on. She had been on Medicare, and then with no money went on Medicaid. And Medicaid by itself is not nice. She passed away this Christmas.

Demographics in this country don't favor folks like us - that I'm comfortable in saying. I'll post more tonight after work but hope others chime in.

    Bookmark   February 27, 2007 at 12:16PM
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I looked into this a few years ago when an insurance company came to our workplace and was selling policies. Basically, I decided DH and I are too young to start this now (under 50), and the value of the coverage has still not been proven.

The link below is to an article on the basics. I don't know if it's too simplified or not, but I found it helpful in thinking about it.

Here is a link that might be useful: LTC insurance

    Bookmark   February 27, 2007 at 1:17PM
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This especially gave me pause (from the article I linked to in my previous post):

The relatively slight chance that an elder will need three or more years of nursing facility care means that insurance companies do not pay out on their policies to nearly the extent that they suggest when they sell the policy. And when the policies' conditions, exclusions, and benefit limits are figured in, the performance of these policies has been quite poor -- at least in the decade of the 1990s, for which complete statistics are available:

About half of all LTC policies lapsed before any benefits were paid; policy holders were unable or unwilling to continue paying their premiums.

Of those people who bought insurance and later entered a nursing facility, about half never collected a dollar from their LTC policies.

No benefits were ever paid to the many people who bought nursing facility coverage but instead received home care or entered a residential facility not covered by the insurance.

When LTC benefits were paid, they were usually far below the actual cost of care.

For many of the longest-term residents, benefits were used up before the nursing facility stay ended.

In all of these situations, LTC insurance failed to live up to its promise to help people avoid using up their savings or relying on Medicaid to pay for long-term care. In other words, it was a lousy investment.


The author goes on to say that insurance companies have attempted to improve these policies since then but that people need to be careful consumers. He also suggests that one might be better served by investing elsewhere the money that could be spent on premiums.

    Bookmark   February 27, 2007 at 1:39PM
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I usually like Nolo Press, but there are many statements in that linked article I disagree with. Everyone's entitled to their own opinion, so here's mine:

If you get a LTC policy, you want the following:
- Moderate daily benefit (over $200/daily is very expensive)
- Comprehensive. This includes home health services, the fastest growing segment of elder care, that is almost never covered by any government services. Yes, it is twice as expensive as nursing home only policies, but this is the policy that will allow you to stay in your own home for as long as possible.
- Compound Inflation protection. This is essential! Very few older LTC policies included this and it is one of the reasons such insurance developed a bad "rep". Our policy started at $130/daily in 1999. We have 5% inflation protection (compounded, NOT simple) and the daily benefit is now $186. That's $5,580 monthly for nursing home/convalescent,and 50% of that for home health services, which leads to the next point.
-Most LTC policies now offer 100% daily benefit for home health services as well. When we got ours, it did not, so we are limited to 50%. However, even 50% is better than nothing!
- Choose your length of payment period - 3 yrs, 5 yrs, lifetime, etc.

I do not agree with the "old wisdom" that you should not buy LTC insurance until you are 60 or 65. People are living longer with chronic health conditions, which is great for term life insurance rates (that have gone down drastically) but very bad for LTC rates, which I expect to rise considerably from their already high levels.

How high? I recently worked for an independent financial planner and regularly obtained health, life and LTC insurance quotes for our clients. Life policies are a cinch, and cheap. Health and LTC are not only expensive, the current underwriting environment is extremely tight. I cannot emphasize this enough; this is what determines the premiums you are quoted.

By this I mean you are very unlikely, at the age of even 55, let alone 60, to receive "Preferred" rates which are cheapest. If you are taking medication for cholesterol or high blood pressure, have any weight problem or bad family history, your chances of getting Preferred rates are slim to none with a good company (defined below). "Standard" premiums are considerably higher -- in some cases, up to 35% more.

It was not at all unusual for me to receive LTC quotes for a couple, in their late 50's or early 60's in moderately good health, for approximately $6500 to $11,000 per year. This was for a policy only slightly better than what we carry. Here's the standards we used to obtain an LTC quote:
- $200/daily, comprehensive, compound inflation protection
- 30 to 90 days elimination period, unlimited payment period

Further, if you or your spouse is taking any mood-altering prescription medication, has had any heart trouble or a minor stroke, your chances of obtaining LTC insurance at any age from a reputable carrier are almost nil.

We obtained LTC insurance upon the recommendation of a financial planner (who wasn't an insurance agent; some are) when we were in our late 40's. We qualified for top rates in 1999. There has been 1 rate increase due to the fact the insurance carrier changed; however, rates are frozen at that level and will remain there permanently unless the management company is requested to find another carrier (which very seldom happens, for reasons not relevant here).

We currently pay $2,000 a year total for our LTC policies.

In 2003 my husband suffered a moderate stroke, 8 days after his 50th birthday. Needless to say, he is now ineligible for any Preferred rates, and most companies would not even give him Standard. He takes 5 pills a day to control his hypertension and triglycerides, plus he has a slightly higher than average BMI (Body Mass Index) which would also count against him.

If we had waited to obtain LTC insurance, yes we would have saved the modest premiums we have paid since 1999. But after his stroke, we would have had to wait at least 3 yrs to apply, and at our current ages, I estimate we would be lucky to obtain equivalent LTC insurance for anything less than $8,000 per year.

That is a big gap to think about....$2K/yr versus $8K/yr. Yup, we made the right decision for us.

Now, the sticky part - selecting a carrier!

This is a private, free-enterprise market. You like competition, great -- but here's the downside. Carriers go in and out of markets depending on where they think they can make the most profit. There's no guarantee when you select an LTC carrier, that in 20 yrs when you need the help, they will still be in that business.

So -- you stick with reputable names. This does NOT mean selecting the carrier whose name you recognize from advertising or because it's plastered all over a big office building in your downtown! It means a carrier who has been in the business for a couple of decades, considers it a main line of business, and has NEVER raised premiums on "existing books of business."

What does that mean? Once you buy a policy, you become part of the existing book of business. All carriers reserve the right to raise premiums on entire CLASSES of business, should too many claims upset the profit cart. But not all of them do this. There are LTC companies who have never changed premiums on existing policyholders; they just raise rates on new business written from that point forward.

Now, there's no guarantee even with a good company, that you won't get a premium increase. But if you have bought carefully and early, and consider this a necessary investment, you can handle a modest premium increase.

Anyone who thinks they don't need it, should hang around the Caregivers forums on various websites. You will find lots of stories of caregivers who are exhausted, drained financially and emotionally, and desperate seeking ways to cope. I do not want to do this to anyone in my family, and we have no children. Thus, for us LTC insurance is a necessity, no different than homeowners or auto insurance.

The very best consumer article I have ever found is linked below. The statistics are outdated (1990's costs), but the list of "what to look for in the fine print" is absolutely outstanding -- filled with questions I didn't know myself!

Good luck to everyone in making a personal and difficult decision.

Here is a link that might be useful: How to Buy an LTC policy

    Bookmark   February 27, 2007 at 2:04PM
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harriet-- "The relatively slight chance..." but "...only about 10% of men and 25% of women age 65 and older spend more than a year in a nursing facility."

ONLY 25% of women??? For more than a year? That sounds like a pretty significant risk to me. There is a much much much much lower chance that my house will burn down, but I still have homeowner's insurance (on the other hand I do not have car insurance other than liability even though I am probably a lot more likely to total my car than burn my house down)-- because if my house burns down, I will be financially devastated, but if I total my car, I can afford to buy another (no, it would not be a negligible expense, but it would certainly not be devastating).

I'm not sure how much help I'll be-- I'm a federal employee and bought the LTC insurance offered as a benefit, so unless you are also a fed, you wouldn't be eligible for the same. I'm also much younger (30s) than most people who buy/think about buying. Why did I? Well, I'll freely admit that it was partially an emotional decision... at the time the benefit became available I'd recently undergone medical tests for possible diagnosis of MS (don't have it!), so the possibility of actually needing care for a significant period of time and maybe at a much younger age than you might expect was something that I could actually imagine happening. Vividly. I also did some calculations regarding costs; it's a much cheaper payment to start buying young, but you will be paying it for a much longer period of time. What does that mean? In this case, the "break even" point (where you spend roughly the same total $ regardless of when you start buying) was somewhere around early 80s... if I die earlier than that, I will have spent more by starting young, if I die later than that, I will spend less by starting young. All of my grandparents have made it to at least 90, so... Yes, there is also the aspect that the money I'm spending now could be put to other use and invested and grown; I consider that my "premium" for longer term of coverage in the event that I would need care at a younger age-- or that I will become diagnosed with something (like MS) that would signficantly increase the expense or simply make me ineligible. And I can afford it now. I can afford to "lock in" the lower premium, so I did.

There were several various options and levels of insurance offered. Some things to look at; what's covered? It was relatively important to me to be sure home care would be covered. Maybe not for you, but I wanted the option. How much and for how long are you covered? I figured I could "self-insure" for a year or so, what I really wanted was to make sure I couldn't be wiped out if I were one of those 7% who need a 3-year stay (from the article harriet linked---"one-third of all women, age 65 and older will never spend a day in a nursing facility." and "Only 10% of all nursing facility residents will stay longer than three years."-- in other words, 2/3s of women -67%- *will* need a nursing home stay, and 10% of those--6.7% total-- will need it for 3 years or more.). I don't know, to me, a 7% chance that I will experience a significant financial hardship seems like something to VERY seriously consider insuring against. Anyway, I believe I chose the longest waiting period before benefits begin, figuring I could afford a short stay, but with unlimited lifetime maximum to protect myself for longer term more potentially catastrophic needs. Think about what you want it to do for you.

You need to know you can afford the premiums and will continue to able to afford the premiums. It's worthless if you give up the insurance before you need it. Consider it a life-long cost or not at all. Consider inflation insurance which allows benefits to increase based on inflation without premium increases--which you may not be able to afford if your income after retirement is limited.

If your wealth/income is such that medicaid will kick in pretty quickly, it's probably worthless for you. The danger is not that you will not recieve the care you need, it's that you will have to financially drain yourself of assets before becoming eligible for medicaid to pay for the care. If you don't have assets to drain, there's no point in insuring them.

If buying privately, I would be very careful of choosing a reputable insurance company. In my case, the federal government will make sure coverage is continued by another company/policy if the one they chose goes under. I figure that's pretty secure unless the federal government is overthrown, in which case there will probably be more to worry about than if I have to sell my house to pay for a nursing home. You probably don't have that luxury, so choose wisely.

    Bookmark   February 27, 2007 at 5:51PM
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I'm printing out this thread - there's a lot of food for thought here.
The link that harriet linked to is referred to on another message board

I have no idea who the author of this article was, but the best that I can tell, it's from 1995.

I've only read about a third of it, but it's filled with bogus facts, figures and mis-information.

This piece was not an honest assessement 12 years ago and it's certainly not accurate today.

If you're looking for reasons NOT to buy a policy, you'll find many in this article. However, there are hundreds of articles on LTCI available for you to read that are much more recent and will contradict everything this guy says.

If you're interested in purchasing a policy, my suggestion is to sit with a broker who represents various carriers in your state.

The 25% figure for women has me very concerned. Since Alzheimer's Disease is a real factor in my family, I figure my odds are not even that good. I'm becoming convinced that LTC ins would be a good idea in my own situation. The questions is: what company? what policy?

Here is a link that might be useful: LTC Discussion Board

    Bookmark   February 27, 2007 at 7:35PM
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BTW, one reason I think Nolo's statistics are way off, is that some recent mortality statistics are startling. An example of this is:

Say that a couple retires in good health, when one of them reaches 65. I'm sure all of us know many 60 year olds who certainly don't look, move, or act like "old geezers", LOL!

What is the age of the SECOND spouse to die? (and the odds are 6 to 1 that it will be the wife who dies last, BTW).

Answer: The second spouse currrently lives to be 92 years old!

Think about it. That is a current figure as of 2005. Mortality is getting verifiably longer, every decade. So expect that age to rise over time. The fastest growing population segment is people over 80.

Baby Boomers, Gen X- and Y'ers, have been bombarded with health messages since birth. We may not always pay attention, but we know a lot more about nutrition and healthy living than our parents or grandparents did. It would not be at all surprising for mortality to lengthen to 100, on average, within the next few decades.

What are the odds that you can manage by yourself until you die? How likely is it that you have sufficient savings to afford a home health care worker to help you stay in your home, for 10-15 additional years? How likely is it that your retirement savings will be sufficient to provide nursing home care that is already at an average cost of over $65,000 a year? Especially with medical costs currently doubling every 10 years!

Remember that taking the risk that Medicaid will be there for your LTC needs is almost as big a risk as private LTC insurance. Bush has already proposed to balance the budget deficit by substantial Medicaid cuts to nursing homes and hospitals. He wants to completely eliminate inflation adjustments and freeze payments at the 2007 levels. As one Republican governor has said, this would put states in the position of forcing people to leave nursing facilities, put them on extended waiting lists, or possibly refuse them care altogether.

Yes, getting the LTC insurance is a "gamble." But the odds are increasing that all of us will need help/care at some point. You cannot eliminate risk in your life, but you can, and should, mitigate it whenever possible.

    Bookmark   February 27, 2007 at 7:48PM
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Wow, alot of very good food for thought. And it's that 25% of women figure that has me concerned, too.

Last Sunday's NY Times has an article about LTC insurance, too, but it doesn't add alot to what everyone has mentioned...except that it does say that premiums are governed by things like whether you are married or whether both members of the couple get policies (it's assumed that one of the two will care for the other for at least part of the time and 2 can get a volume discount). One financial planner they quote says that those with assets of $200,000 to $4million are candidates for LTC (but others say don't put a cap on your assets). The article also mentions that the industry leaders are John Hancock, MetLife, Mass Mutual, Prudential and Genworth. I know these are companies that have been around for years.

I'm in good health now, at 51, but do take anti-cholesterol meds along with other heart meds. DH is in good health. So, I don't think we'll be getting any $2000 annual premiums. I also have zero,zip,no faith in the govt being there for us when the time comes...thus the need to further develop our financial plan.

Today at work we had a staff meeting. I asked our senior manager if we were going to be switching to the type of health care savings account (which are new this year) that allows you to roll over unused balances from year to year. He's checking on that for me. A friend's employer just switched to that type plan this year.

DH and I would very much like to do 2 things: 1)save now specifically to build and segregate funds that we could use to pay insurance premiums post retirement and 2)not be sucked dry if one of us needs long term care. We are doing well with overall savings and are on target to have a solid retirement...if medical expenses don't suck us dry.

I'll be reading all these links and start looking for an independent insurance agent to chat about this subject. Thanks all for your great thoughts so far.

    Bookmark   February 27, 2007 at 9:02PM
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Grandma, We're meeting with our accountant next week and I'm going to be asking about the HSAs. I'll report back on those.

    Bookmark   February 27, 2007 at 9:25PM
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I'm 60 and have had LTC for about 5 years; so has my significant other. Our premiums are about $3000/year total, but fixed. We both were in excellent health and got the lowest rates possible for the level of coverage chosen. I'm glad we didn't wait, as my better half has since developed a chronic condition that would have sent her premium through the roof.

My thoughts on getting full value out of the insurance are as follows. I have insurance -- of all kinds -- to deal with crippling catastrophes. I don't regret the homeowners insurance I've carried for 35 years and never made a claim on; I don't regret the car insurance premiums, although I haven't had an accident in decades; and I don't regret that I'm still alive and no one is collecting on my life insurance! And, if I'm lucky, I'll never collect the benefits on my LTC policy either. However, I'll keep paying those premiums because I just might need the coverage some day...

    Bookmark   February 27, 2007 at 10:05PM
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Consumer Reports did an article that recommended great caution in buying LTC insurance.

This is a short statement they put out last November:

November 2006

Long-term care: Brace yourself for a scary P.R. push

If the people who sell long-term-care insurance have their way, you'll soon feel even more agitated than you might feel already about your financial future.

The American Association for Long-Term Care Insurance, the industry's trade group, has dubbed Nov. 5 to 11 Long-Term Care Awareness Week and provided its 4,000 members with press kits to stir up local media interest in the topic.

Why the public-relations push? One reason might be that a lot of money is up for grabs. LIMRA, a group that does marketing research for the insurance industry, estimates that $308 billion will be available to be rolled out of employer retirement accounts this year by people who are retiring or changing jobs. And that amount is expected to reach $422 billion a year by 2010. Most people, though, are rolling their money into mutual funds, not using it to buy insurance--generally a smart move, in our view.

Expect to hear lots of reminders not only about how little Americans--especially baby boomers--have saved for retirement but how expensive it could be to pay for care in your home, an assisted-living facility, or a nursing home. A long-term-care policy will not only pay for such services but also keep you from being a burden to your loved ones--or so the sales pitch would have it.

While we agree that many of us could be doing a better job of saving for retirement and future health costs, we're not convinced that long-term-care insurance is the answer. When Consumer Reports has investigated long-term-care policies, it has concluded that they are too risky and too expensive for most people. For one thing, the annual premiums you must pay to keep the coverage in force can rise swiftly, making the policy prohibitively expensive even before you have any need for it. That means losing the money you've paid in, which you might otherwise have invested. In addition, a policy's benefits are likely to cover only a portion of your total expenses. And many policies come with catches that can keep you from collecting.

Our report, Do you need long-term care insurance? can help you decide whether you are one of the few who should consider a policy. If so, our report also provides criteria you can follow to choose the right coverage.

Here is a link that might be useful: CR report on LTC insurance (2003)

    Bookmark   February 27, 2007 at 10:15PM
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patser and others,
I have an LTC advisor coming to talk to me on Thurs (she was supposed to be here yesterday, but had to postpone)

I've also emailed our financial advisor who is sending me info.

Hopefully we can all continue to share thoughts and resources.

harriet - I'm not discounting the risks, not at all. I think we all need to be thorough and cautious. I have that CR report saved in my "LTC" file. It seems that we all have four options:
1) Do nothing and hope for the best
2) Plan to "self insure" - that is pay for anything that is needed until we run out of funds
3) Plan to have others (the gov't or our children) care for us
4) Take out LTC ins (carefully) and hope that we never need to use it.

I'm thinking the last option is going to be my best choice.

    Bookmark   February 27, 2007 at 10:48PM
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I'm wondering where these stats are coming from. My graduate degree is in gerontology. While I don't stay totally up with the field, my reading indicate that rates of nursing home care haven't change all that much. Still about 5% of the general population will need care at one time. Now, if you were to use a stat like 25% of the women over aged 80...that I would buy. The percentage obviously goes up as you get older.

We are both 51 and have been looking at LTC policies for the past 10 years. Until recently, they only covered skilled care, not custodial which is the majority of nursing home care level needed. We both come from families where nursing home care has not been needed except for two months before my MIL passed away. My own mother is still living independently at 89. Neither DH nor I have chronic medical needs at this time. We are very fortunate.

We've crunched the #s to the best of our ability and figured in inflation. To this point we have passed on the policies. We have funds to pay for 10 years of skilled care or 15 years of custodial care, while still being able to maintain a well spouse independently in the home. We should be in even better shape by the time we reach aged 75. Looks like we are taking grandma's option #2 at this time.

We will review things again in a year or two, reevaluate our needs and either look at policies again or not.


    Bookmark   February 28, 2007 at 3:48AM
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Grandma, How did you find the person who's coming to speak with you? Is it an independent insurance agent? Or a person with another type of job title?

The thing that concerns me most is what these policies EXclude. I believe that some exclude illnesses classified under the category of "mental illnesses" (and some policies define Alzheimer's as "mental").

I guess the biggest part of what is driving me on this is twofold. 1) My dad, who was 9 yrs older and much healthier than my mom and who everyone thought would outlive my mom, developed cancer and was gone in 9 months. During those 9 mos, he ended up needing in the home care for a couple months. My mom had a slowly progressing terminal illness which ultimately required her to have help for over 20 years, both in the home and nursing home and both before and after my dad died. and 2) Our country is going to HAVE to scale back somehow on what it provides to senior citizens - the pot of seniors is just going to be too big.

    Bookmark   February 28, 2007 at 6:40AM
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Another here who is taking Grandma's Option #2 for now.

I would like to know more about how the spouse's income is affected. If I should have to enter a nursing home, my retirement funds (IRA and SS only, I have no retirement pension related to employment) would cover me for a few years and my husband's pensions and retirement funds would allow him to live comfortably.

However, if the situation were reversed and he had to enter a home all of his pensions would be required to go toward the cost of the home, right? Or would I be allowed to withdraw some of his IRA and 401k funds to live on? With just my own IRA,401, and SS I do not think I would have enough to live comfortably on.

In regard to in-home care. I would think that funds could be used from a reverse mortgage for that.

Our tentative plan---admittedly not well thought out at this time---is to downsize eventually either into a continuing care community or into a smaller house or apartment, using the money from the sale of this house to pay for any caretaking needs.

Of course, this is in consideration of the fact that the majority of nursing home stays supposedly are of 2 years or less.

    Bookmark   February 28, 2007 at 7:57AM
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The woman coming tomorrow was the result of an online search. As I mentioned previously, I'm also getting some leads from our financial planner.

You can bet your bottom dollar that I'll be reading the exclusions very carefully. I'd never buy a plan that exclude dementia. The longer one lives, the more likely they are to develop some type of dementia.

I'm working on this in two stages - the first is to figure out exactly what kind of plan I need. The second is to select a company. Once I know exactly what I need, then I can compare plans between companies.
So far, I think I need a plan that covers in-home assistance in addition to skilled nursing facility. I need a plan with a built in inflation factor. I need a plan with a trigger at no more than assistance with 2 ADL's (and aparently bathing assistance is the one that is most often required).

Again, I will be purchasing this hoping that I'll never need to use it.

    Bookmark   February 28, 2007 at 8:11AM
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Another thing to look for in regards to exclusions:

I know someone whose mother had to go into a nursing home from assisted living. Because she went directly into the nursing home from assisted living her LTC policy did not cover her because the requirement was that the nursing home admission had to be directly from a hospital.

It's all the nit-picking various exclusions, that give the insurance companies ways to weasel out of paying, that make me hesitant to get involved in LTC insurance. The more I research the subject, the more confused I become.

    Bookmark   February 28, 2007 at 8:52AM
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nannygoat, that's an interesting observation.

When my late mil was hospitalized, the admissions person told us that for medicare to pay for nursing home care, she'd have to go straight from the hospital. If she went home, THEN went to nursing home, medicare would not cover. (In any case, medicare covers only a very limited time, certainly not long term). She ended up going to an adult family home where she lived for 2 years until her passing. It was a much better situation.

    Bookmark   February 28, 2007 at 10:47AM
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Sometimes, when issues are complicated, people do nothing. Making an informed decision not to purchase is one thing; however, not purchasing because you've never researched it enough is something quite different. There are reliable companies who have provided LTC insurance for many years, so don't approach this assuming they're all scam artists.

    Bookmark   February 28, 2007 at 12:44PM
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Sometimes, when issues are complicated, people do nothing

I've observed this with my late mil and my own mother. Neither had a plan in case they became incapaciated. Their plan was to die in their own home (presumably when they were ready). My mil's health deteriorated rapidly and everything spun out of her control. I had her sign a pow (to DH and bil) but never could get her to sign a health care pow. Consequently, DH and bil were able to deal with the financial aspects of paying her bills, selling her house etc, but when she was close to death and in a lot of pain, they were unable to sign her up for hospice care and she no longer had the capacity to sign anything. She was 84, very frail, with a slew of issues (diabetes, congestive heart failure, high blood pressure) and because she had no health care directive, the doctors did everything to keep her going as long as possible.

In my mother's case, she also made no plan, nor communicated anything to my sister and me. We finally were able to get her to a specialist who diagnosed Alzheimer's (after many, many scary incidents). Her small savings is gone (she gave about a quarter million to her church group) and my sister and bil support her. She's been living with them for nearly 5 years now and is on a waiting list for a facility where she will have to be admitted as a Medicaid patient.

As for me, DH and I have current wills, health care directives, and in the case of incapacity, pow's (DH as primary and my son as secondary). Everything is in a binder (son knows the location) with a list of accounts, safe deposit info, names and contact info. I feel that once I have this LTC ins thing figured out, I will have peace of mind.

    Bookmark   February 28, 2007 at 1:18PM
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nannygoat, in regards to your husband's pension funds, if you are privately paying for the LTC, no one takes his pension. You write the check and handle the money. Only if someone is on Medicaid would the money go directly to the LTC facility, rather than you. 30 years ago, Medicaid demanded that all assests were spent, leaving a well spouse on the street corner. Laws vary by state, but the well spouse is no longer left homeless and without income if one spouse needs care.


    Bookmark   February 28, 2007 at 2:52PM
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patser, my policy is with Security Mutual Life of Nebraska. IIRC, I just got paperwork from them that they're changing their name to Assurity as a result of a merger.

    Bookmark   March 1, 2007 at 8:45AM
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Frankly, more people SHOULD get scared about LTC. Maybe then they would plan properly for it, instead of sticking their heads in the sand and hoping everything will come out okay for them.

I obtained an LTC quote in mid-2006 for a neighbor: single homeowner, no family around, 58 yrs old in excellent health. The quote was for $5600 and she balked; hemmed and hawed and said, "well, I'll think about it later."

In February 2007 she had to go in for a D&C where it was discovered she had uterine cancer. Well, big oops! That $5600 premium won't be EVER be available again to her. She'll need to wait another 5 yrs, and even then will get no better than Standard rates instead of the Preferred she could have qualified for. She'll be lucky if, in 5 yrs, she can get a quote for anything less than $10K/yr.

So I doubt she'll ever buy one, which means at some point in her old age she will have to sell her cute, but tiny (1 bd/1 ba) cottage, which is located in the worst location in the neighborhood (right by the elementary schoolyard, noisy and kids smoking/drug dealing in the walkways). In other words, another Medicaid inmate. And in Northern CA cities, some of those Medicaid nursing homes you wouldn't put your dog in, I can assure you!

Please note that I would disagree with the posting that mentions LTC companies. I would delete John Hancock and add Lincoln Benefit Life. The reason is that JH has in the past raised premiums on entire classes of LTC business already written (existing policyholders, in other words), so you cannot depend on their premiums remaining at the level you first bought in.

Lincoln Benefit Life is part of the Allstate Group, and is one of the major LTC carriers in the industry, although only the insurance agents seem to know who they are. They are in fact either #2 or #3 in the LTC market, after Met Life, I believe. They sell the new combination LTC-Annuity policies, which return money to you/your estate if the LTC portion goes unused. These are not as inexpensive as the traditional LTC policies, but if you have concerns about paying premiums for years and ending up not using the LTC policy, these new policies might be worth looking into. Genworth also sells such a policy, along with traditional LTC policies (they were formerly GE Assurance Company).

Good luck!

    Bookmark   March 1, 2007 at 2:01PM
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jkom, with all due respect, it sounds like you are an insurance salesperson, so perhaps you are biased on this issue. My apologies if I'm wrong.

    Bookmark   March 1, 2007 at 2:37PM
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Just had a conversation with my sister. She's outside Denver. The cost of nursing home for Mom will be $7000/mo. Since Mom is in excellent physical health (her issue is Alzheimers) and is 82, it is entirely conceivable that she could be there 5-10 years!

Mom always said she put her trust in "the Lord". Well, I guess the Lord will be working through the taxpayers.

    Bookmark   March 1, 2007 at 4:16PM
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Can you tell me how I can determine which companies have raised premiums?

    Bookmark   March 1, 2007 at 4:25PM
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Grandma, If your mom's expenses end up eating up all her assets, please note that she'll be able to go onto Medicaid when her total assets have dropped to $2000 (and that's something that has to be certified annually). Keep that in mind when your family thinks about funeral planning. $2000 doesn't go far at all.

I'm sorry your mom is in that situation.

    Bookmark   March 1, 2007 at 8:23PM
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harriethomeowner, I am a career Executive Assistant, and have worked in the insurance, banking, consulting, and financial planning industries for over 35 years. Although I may sound knowledgable to a layperson, any good insurance agent or financial planner could run rings around me, I assure you!

I have always done a lot of Net research as part of my job, ever since use of the Net became popular. So I have been involved in many of the issues in the financial and insurance world both as a consumer and as an administrator who has the joyous (NOT!) job of filling out all that paperwork, LOL.

You need to find a good insurance agent. That means someone who has been in the business for over 10 years, has a good breadth of knowledge on the subjects of health and LTC insurance (the different types of insurance each require annual certifications of a certain # of hours spent in classroom or workshop study), and gets a lot of his business through referrals from satisfied customers. So you should interview several and not only ask a lot of questions, but listen to how well THEY listen to YOU. After a while, you'll get a feel for how well they really know their subject, and what their ethics are like.

In other words, it's a lot like finding a contractor, which means it isn't much fun at all! But, at least insurance agents keep on time for their appointments, and apologize if they keep you waiting!

    Bookmark   March 1, 2007 at 9:23PM
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Thanks - I only mentioned Mom's situation to point out what can happen when one refuses to plan. My sister has already put an application for Medicaid - she's discovered that nursing homes who accept Medicaid patients won't accept "Medicaid Pending" - they will accept patients who are already ON Medicaid, with a case #. The wait period to get onto Medicaed is 45 -60 days. The process is fairly involved.

As far as funeral planning, my sister and I have agreed to split that expense.

    Bookmark   March 2, 2007 at 10:04AM
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Found a site with some statistics on LTC insurance:

Long-term Care Insurance
The average annual long-term care premium for individuals under 65 is $1,337.

The average premium for individuals over 65 is $2,862.

The average long-term care insurance policy purchased by a 65-year-old and held until death pays out 82 cents for every dollar.

Since 1987, fewer than 10 million Americans have bought long-term care insurance, and only about 7 million of those policies remain in force today.

Almost 30 percent of Americans over 45 have purchased a long-term care insurance policy.

There is some other interesting information on this site. They have what they call "5 Big Ideas" (go to the link below and find the link to "AAHSA's Five Big Ideas") including this, which I think is right on target (although who knows if it will ever come to pass):

Myriad studies, trends, and prognostications support the conclusion that the current system of financing long term care through Medicaid, with a smattering of long term care insurance, is inadequate and unsustainable for the country. A new, rational approach is needed that infuses sufficient funds into a national plan. A new national plan should be fair and equitable for all who will have long term care needs, ensure choice to allow people to responsibly remain at home, support the natural care-giving network, be fiscally sound, and be overseen by a governance structure immune from conflicts of interest.

In short: a public insurance model is called for. In such a plan everyone pays a modest premium. There are uniform standards of eligibility and care management. The dollars follow the eligible consumer. And, the money is managed in a sound actuarial and independent structure. This plan could resolve the pending Medicaid financial crisis, and there are precedents for it in other countries challenged by the same demography.

Here is a link that might be useful: AAHSA site

    Bookmark   March 2, 2007 at 11:27AM
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When I worked at my last job, at a small private investment management firm, I must have obtained 25-30 LTC quotes for clients and prospects in less than 2 years. At no time, for people ranging from ages 44 through 79, did I ever see a quote come in from the three major LTC companies we used -- Lincoln Benefit, Met Life and Genworth -- that was ever less than $4200/yr for an individual, UNLESS they were requesting a nursing home only policy with no home health services.

There was indeed one client who requested such a policy, and the quote came back for around $1900 for age 66, Standard risk (which falls right in line with harriethomeowner's stats, above), although we did include compound inflation protection - something our financial planners insisted upon; they will not recommend any quote without it.

However, this man is single, no heirs, with a guaranteed pension, retirement medical benefits that pay for home health services, and a liquidity of around $1.6M, not including his paid up home. Realistically very few people are fortunate to be in his position.

I figure that IF, and it's a very very big "if", the government ever gets its act together and indeed adds LTC coverage to the Medicare program, I will see if the government benefits are better than our private policies. If so, I can let them go without bitterness; they will have served their purpose and given us a peace of mind that an extended disability to one or both of us could be managed without devastating our lifetime of accumulated assets.

But I'm not holding my breath till it happens, LOL!

Since we're posting stats, here's another one to think about...almost 48% of all people receiving Social Security Disability benefits are under the age of 60.

    Bookmark   March 3, 2007 at 3:16PM
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jkom51,you are reeling off plenty of stats, but no links to that information.

I'm not buying them, and 1.6 M isn't all that much these days.


    Bookmark   March 4, 2007 at 12:48AM
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"almost 48% of all people receiving Social Security Disability benefits are under the age of 60"

Doesn't surprise me at all. I'm surprised the number isn't higher actually. Social Security Disability recipients include:

-Spouses and minor children of deceased workers (until age 18)
-Physically and cognitively disabled minors (also under 18)
-Physically and cognitively disabled adults (formerly in the above group but now over 18 and still disabled)
-Adults who become physically or cognitively disabled through illness or trauma and unable to work.

Those last two groups continue to receive disability payments even after the age of 60, or 62 or 70.
Maybe there is a misunderstanding. Your typical elderly person does not begin to receive Social Security disability if they become infirm. They continue to receive their same Social Security retirement payments based on their earlier earnings. And their health coverage remains Medicare unless they deplete all their assets and become eligible for Medicaid. There is no entitlement program for getting infirm when you are old.


    Bookmark   March 4, 2007 at 1:57AM
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quiltgo, if you look at my postings there are very few "stats" in them. Most of what I wrote is the experiences I've had on the job gathering info and filling out forms for clients in financial planning, insurance and investment management, and consulting industries.

You are certainly free to believe whatever you wish. And I am happy for you that you consider $1.6M in liquid assets ordinary. The San Francisco Bay Area, where I live, is one of the most prosperous, diversified economies in the US, but the majority of residents don't come anywhere close to having $1.6M in cash on hand.

Liquid assets are just that -- investable dollars. Not a house, not a rental, not a pension, not life insurance. Just cash, and a portfolio of assets.

My DH and I have an estate of $1.8M, but our liquid assets are only $415K, and we're in our 50's with good jobs. As I said, LTC insurance to us is just a way of reducing the risk that one or both or us getting disabled/sick would bankrupt the estate and leave the other stripped of resources, forced to use Medicaid for the limited elderly care it offers.

    Bookmark   March 4, 2007 at 11:33PM
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jkom51, still no links. I realize you haven't been posting on this board long. Most of us very clearly understand liquid assets. Really, we do.

I would image there are several on this board alone doing better on liquid assets than you. DH is a CPF and while you may not want to hear it, 1.6M is not usual for someone at the peak of their earnings which is pretty much your age.

Since I already posted that we have liquid assets to cover pretty extensive nursing home costs, I don't think it's unreasonable for people to explore other avenues besides making insurance companies even richer. If you end up being one of the 95% which doesn't need nursing home care, you come out way ahead. If you are part of the 5%, then you are covered.


    Bookmark   March 5, 2007 at 3:24PM
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If you end up being one of the 95% which doesn't need nursing home care, you come out way ahead. If you are part of the 5%, then you are covered.

I'm curious as to where your 95% figure came from.
The figures I'm seeing are quite a bit different:
according to research published in the journal Inquiry by Kemper, Komisar, and Alecxih, most people who turn 65 in 2005 will, in their lifetime, need some level of long term care.

According to the table in the article, 28% of women and 11% of men (people who will turn 65 in 2006) will need 5 or more years of some form of LTC. The same table shows that 22% of women and 17% of men (again of people turning 65 in 2006) will need, at some point in their lives, 2-5 years of some form of LTC.
At $7000/mo, a 5 year stay could be $420,000 in today's dollars. Not an insignificant sum for many.

Here is a link that might be useful: Long Term Care

    Bookmark   March 5, 2007 at 6:28PM
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zone8_grandma, that table is grouping all types of LTC together, including assisted living, nursing home, at home, and so on. They say "some level of care."

I found this calculator (not that it's not something you can't do with a paper and pencil, but it's interesting to see it as a graph).

Here is a link that might be useful: LTC calculator

    Bookmark   March 5, 2007 at 6:43PM
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Harriet -
Yes, it does group all types of LTC together - it seems to me that the point is that more folks than realize it will require some level of care at some point in their lives. That care has to be paid for in some way. Either by the taxpayers, the person themselves, or an ins co.

I don't believe there is a "one size fits all" solution; for myself, I'm coming to the conclusion that LTC ins will buy me peace of mind. I've given myself a deadline (my next birthday) to make a decision and take action.

    Bookmark   March 5, 2007 at 6:52PM
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Just adding some new discoveries to the mix here. My sister has been researching nursing homes for Mom whose Alzheimer's is causing more problems. Sister says that that Alzheimer's patients tend to do best in home situations where there are 4-5 Alz patients, but these types of homes do not accept Medicaid patients, so Mom isn't a candidate. Additionally, a number of nursing homes have private rooms, but again, those aren't available for Medicaid patients. So she will not be in the best possible situation for her condition. Again, it's unfortunate, but it's the result of her refusal to make a plan for herself.

    Bookmark   March 5, 2007 at 7:13PM
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Gloria, lots of people are doing better on liquid assets than my husband and I. I know, I have worked for many of them! There's never any problem getting a job when you're a top-flight Executive Assistant, LOL.

I did not mean to insult you in explaining liquid assets. When rereading my other posts, I thought perhaps I wasn't clear on what I meant, so I added an explanation. You seem to have taken offense at that, and I certainly didn't mean any.

One reason we personally don't show as much liquid assets as one would expect is that my husband is a government employee, with an 80% guaranteed pension and full retirement medical benefits. It's worth an enormous amount of money, but not something we add in the total.

I'm not sure what "links" you expected to see. As I said, much of what I posted is my own experiences 'on the job.' I do think that one can get LTC quotes that are less than what I used to pull for our clients, but people should know that no insurance broker works for all companies, they pick a few that they prefer to do business with, and stick with them.

My last boss, who is a CFP (is that what you meant to type for your husband's occupation? I don't know what a CPF is) with his own business and 7 employees, was very conservative and selective about the carriers he would recommend to his clients. So we never pulled quotes from a dozen different companies for the lowest price -- he would only have me get quotes from certain companies whose reputation and service, he felt, were worthwhile.

Certainly, many people have done better than we have. And many people have done worse, also. LTC is like any other insurance -- a balance of risk versus return. You are to be congratulated on not needing to invest in it! That is a great position to be in.

But as zone8_grandma's example shows, our patchwork of elder care services just does not work for everyone. And I believe that problem will worsen. I hope we can all find solutions that work for our individual circumstances, one way or another.

    Bookmark   March 5, 2007 at 10:13PM
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"Since I already posted that we have liquid assets to cover pretty extensive nursing home costs, I don't think it's unreasonable for people to explore other avenues besides making insurance companies even richer."

I don't think anyone here is arguing about that. If you have the financial means to handle any needed care, you probably don't need insurance. Most people don't, though. And too many people don't even bother to think about whether or not they do.

    Bookmark   March 6, 2007 at 10:31AM
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"Since I already posted that we have liquid assets to cover pretty extensive nursing home costs, I don't think it's unreasonable for people to explore other avenues besides making insurance companies even richer."

It's nice that you have liquid assets to cover extensive nursing home costs, but you seem to be implying that your solution should work for others. And others may or may not have the liquid assets available. For those folks, the "other avenues" are to have their children take care of them, take out LTC ins, or go on Medicaid (which may or may not even be available by then)

    Bookmark   March 6, 2007 at 10:49AM
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My very smart mother took out LTC when she was still working and it was a good deal. I think it was John Hancock. She paid into it for ten years or so. She became ill and had to move to an assisted living facility as she could no longer manage the stairs in her house.
Because she had such a good policy, she was able to take a suite with two rooms. That allowed me to stay with her as much as she needed or as much as I could. As her condition worsened, she required more care and the LTC covered that as well. At some point we hired extra nurses to stay overnight or when she would be alone, which we paid out of her finances.
Her charges were between $3,000-$6,000+/month for six months depending on the level of care. For all I know she may have paid that much in premiums (the insurance companies ARE in business to make a profit), but when it came down to it, we did not have to worry about where the money was coming from. Once she was qualified, John Hancock took care of everything which left us without that additional stress.
That policy was right on time when we needed it. We may have been able to pay that out of her accounts, but in the end her estate was preserved, which was her wish and intent.
DH and I (mid 40's) now have LTC offered through my employment, at about $600 for both of us annually. My father also signed up a few years ago and at 75, his premium is $1600/annually. It will never be as cheap as it is now...
And having those resources when they are most needed gives us tremendous peace of mind and hopefully allow us to keep our house.

    Bookmark   March 8, 2007 at 11:36AM
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Thanks for sharing that. I told my son I was planning to take out an LTC policy and he said he appreciated the fact that I was thinking ahead. (I already have a will, health care directive and power of attorney in place)

Going back to patser's OP, I haven't decided yet on a company. For sure it WILL be one of the big ones (GE, JH, MetLife, or another). My first task is to figure out a daily benefit amount and also a benefit period (2,3,4,5 years). I've already decided I want the inflation protected coverage and I want either a separate policy for DH or a policy that is flexible enough that either of us could use it.

The agent I talked to the other day, in discussing the issue of premiums going up said that GE had not raised their premium in 30 years. She made it clear that they could raise the premium, but so far have chosen to raise it only on new policies.
For me, the policy I want will probably cost around $1100 - $1600 annually. I hope I never need it. I figure that I'm buying peace of mind both for myself, my husband, and my son.

    Bookmark   March 8, 2007 at 12:16PM
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I've not looked at this post in a few days so thanks for all the ideas and discussion that's occurred. I am going to get on the ball researching more fully in the next few weeks.

My 81 yr old aunt, who was my mom's doctor (before mom passed on), has had cancer for the last 2 years and in the last 12 days went from living on her own, to the hospital and now is in hospice care. She'll end up being one who didn't have LTC insurance and won't need it. It's been a tough couple of weeks for our family - I'm just flat out tired. Yet even though my aunt's circumstances are what they are, I'm still leaning toward finding the policy that's right for DH and I.

Thanks, everyone. Please keep your ideas and experiences coming.

    Bookmark   March 8, 2007 at 10:19PM
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I didn't read every entry here so I don't know whether or not anyone suggested AARP Long Term Care Insurance through Met Life. My husband and I bought this 3 years ago and it is a very affordable choice. Not a Mercedes of coverage; more like a Toyota Camry. I'm three years older than my husband, and our coverage is for $3,000/month with a maximum benefit of $100,000 each. This includes home care and/or facility care. Our policies total just over $105/month. The elimination period for each policy is 45 days.

Although I am opposed to LTD in general, my reasons for purchasing are the reverse of many who think they need it for old age. I bought these policies (we were both in our mid-50's when purchased) because of their affordability and broad coverage. I wanted the protection now while we are reasonably young in the event one of us had an incapacitating event like a stroke or an auto accident and needed rehabilitative care. I'm not planning to keep them forever.

After my husband retires, we may keep the policies for awhile, but if we need the extra $100 a month, we will cancel them. We've watched many, many older relatives, friends, and coworkers die in their own homes without ever needed nursing assistance. Others have entered a nursing facility for the last 3 - 6 weeks of their life when it became impossible for family members to attend to their basic needs. They did not live beyond a 45 day elimination period (if they had had insurance, which they did not). But, I have encountered several people who needed considerable rehabilitative care for periods of 6 months - 2 years while in their 50's - 60's. They recovered and are back to leading full lives. But they seriously depleted savings during rehab. This is what I would like to avoid.

My feeling is that insurance companies would not be hyping this insurance so dramatically if it weren't terribly profitable for them. But, if you think you might want a small amount of protection at an affordable price, take a look at this AARP option.

    Bookmark   April 18, 2007 at 11:22AM
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Sorry, in the above message I meant to say LTC instead of LTD

    Bookmark   April 18, 2007 at 1:41PM
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What if one plans to enter a continuing care community? There would be no point in having LTC insurance in that case would there since the hefty entrance fee guarantees care for life.

    Bookmark   April 19, 2007 at 8:02AM
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Does anyone have an opinion on Allianz? They have a LTCi plan that you can choose to pay entirely in ten years, and another otion to get it paid for by age 65. IOW, pay it while you are employed and can afford it.

I'm looking at all the big guns too, JH, GE, Metlife....but was wondering about Allianz.

    Bookmark   October 27, 2007 at 4:52AM
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I have always been pretty well prepared for anything life throws at me. I did not buy LTC insurance because at the time I researched it, only 10 to 15% of people end up in a home. I gambled ......and lost. But the government is pretty good to the surviving spouse and I am ok. We did a division of assets and surprise, surprise, my expenses came out of his half of our money. I am not buying LTC insurance for myself.

    Bookmark   October 27, 2007 at 9:07PM
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Well, I'll revive this thread.
I decided to go with Allianz. Boy, I think it was jkom who said the underwriting is really strict so they can put you in the class preferred or standard, which impacts the rates. They called me for three interviews, got my doctors records, reminded me of a visit I had to a specialist over 2 years ago! that I had forgotten about...they must have gotten wind of that through the specialist sending a report back to my primary. Anyhow, they really delved into my health history. I am pleased to report that I am in their preferred plus class, for the best rates.

I am doing a plan that will be totally paid up in 10 years, so I will be done paying for it about the time I retire. Personally, I just couldn't fathom paying for 30 or 40 years (I'm 52).

I feel better psychologically...with no children to care for me (or not) I guess it is some form of self-protection!

    Bookmark   June 7, 2008 at 8:31AM
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I just realized that I hadn't posted since getting a policy. I went with John Hancock and my experience was similar to that of Acey. First a written application, a follow up phone call from an RN going over the info and asking for more info. Then I had to have a physical by a dr they designated (DH wasn't required to have a physical - presumably because he is only 59).

I got the preferred rate, DH got the standard rate (he has hyptertension).

We went with a policy that has a 120 day elimination period, a 150/day benefit (here that's about 75% of the cost) max 4 years, is good for snf or assisted living or home care, and 5% (compounded) inflation protection. There were some compromises to get the rate down a bit.

It's personally a relief for me to have it in place.

    Bookmark   June 7, 2008 at 4:53PM
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Would those with LTC insurance mind posting what their premiums will total? (Acey said it would be paid up in ten years...what's that grand total?)

Is the 5% per year increase pretty standard? Do their benfits go up 5%, or do your payments increase 5%? Health care costs have been increasing at a much higher rate than that for a long time.

    Bookmark   June 8, 2008 at 11:53AM
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Would those with LTC insurance mind posting what their premiums will total?
My premium is $1722/yr; DH's premium is $1523 (he's 59, I'm 63). My rate was "preferred", his "standard".

Is the 5% per year increase pretty standard? Do their benfits go up 5%, or do your payments increase 5%?
The 5% compounded means that the benefits go up 5%/yr. It's not necessarily "standard". One has to make certain that the policy includes it. Usually the term is something like "inflation protection".
The premium is not increased. The only way for the premiums to be increased is for the company to increase the premiums accross the board for everyone in that insurance class (of course doing that risks losing a lot of customers so companies generally don't do it a lot). Another reason to go with a large, established company, imo.

    Bookmark   June 8, 2008 at 6:51PM
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Our LTC policies were obtained under the CalPERS LTC program, which negotiates extremely favorable rates for state government employees covered by PERS. They are less than market rates. Also, we obtained our policies when we were in our late 40's, so the premiums were extremely low.

My DH: $984/yr
mine: $1140/yr

Coverage: currently $192/daily with 5% annual compounded inflation protection, 50% for assisted daily living facility, max $2881/mo for home care. Lifetime payout, 90-day elimination period. (Home care allowance is included in the 5% compounded inflation coverage and so rises over time)

You should note that some LTC policies offer 5% simple inflation coverage, NOT compounded. It's preferable to obtain compounded inflation coverage, but you will pay more for it.

    Bookmark   June 8, 2008 at 10:12PM
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Monthly Premium: $90.13
Current Daily Benefit Amount (DBA):$191.00
Waiting Period: 90 days
Inflation Option :Automatic Compound Inflation Option (this means my daily benefit amount increases, my premium not not increase with inflation)
Benefit Period :Unlimited

Facility Care
Nursing Home, Assisted Living Facility or Hospice Facility :
Up to 100% of your DBA ($191.00) per day

Home Care
 Services Provided by a Formal Caregiver at Home :
Up to 75% of your DBA ($143.25) per day

 Services Provided by an Informal Caregiver :
Up to 75% of your DBA ($143.25) per day; benefits for services provided by Family Members limited to 365 days in your lifetime

 Hospice Care at Home :
Up to 100% of your DBA ($191.00) per day

 Adult Day Care Center :
Up to 75% of your DBA ($143.25) per day

Bed Reservations :
Up to 100% of your DBA ($191.00) per day; benefits limited to 30 days per calendar year

Caregiver Training :
Up to 100% of your DBA($191.00) per day; benefits limited to 7x your DBA ($1,337.00) in your lifetime

Respite Services :
Up to 100% of your DBA ($191.00) per day; benefits limited to 30x your DBA ($5,730.00) per calendar year

I'm young, so I expect this is comparatively dirt cheap.

    Bookmark   June 9, 2008 at 10:03AM
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Smart Money magazine published an article several years ago that argued against buying LTC in your 50s or earlier because the standard 5% inflation protection coverage would not keep up with the average 7% increase in nursing home costs. Basically, the earlier you buy the policy, the larger the gap that you will have between what your policy pays out and what the actual costs will be. Here are a couple of quotes from the article:

"The 5% inflation adjustment is the industry standard, adopted by the National Association of Insurance Commissioners (NAIC) in the early 1990s. If the insurance industry were to adopt the 7% inflation figure that some predict, 'the cost would be prohibitive', says Tom Foley, an actuary with the North Dakota Insurance Department who chairs the NAIC's long-term care rate stabilization woking group."

"The average age at which people buy long-term-care insurance is now about 65, and given the effects of inflation on your coverage, not to mention the uncertainty of health care costs and public policy 20 or 30 years from now, why buy it earlier than that? 'If there's a liklihood you might develop a health problem that makes long-term-care insurance expensive, you might want to buy it sooner', says Chuck Mondin of the United Seniors Health Cooperative, a nonprofit advocacy group. Otherwise, wait."

    Bookmark   June 9, 2008 at 11:46AM
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>> 'If there's a liklihood you might develop a health problem that makes long-term-care insurance expensive, you might want to buy it sooner'Unfortunately, that statement is the kicker. Who can tell when you are going to develop a health problem? My DH, who suffered a haemorrhagic stroke at the age of 50? A friend who was in perfect health until she found out she had cancer at age 59? Both of these people are now ineligible for anything but a very expensive policy, available only after a five year waiting period - with premiums so high that neither can afford it.

My DH is lucky, we had already purchased the LTC policy three years prior. My friend is not; the LTC quote I got for her not six months prior to her cancer diagnosis is now useless.

Please do not buy insurance thinking it is the sole answer to your problems. It helps MITIGATE risk, but it cannot eliminate it.

I do not expect our LTC insurance to pay everything. But it goes a good ways towards stretching our health dollars - and for what it costs, even having bought it in our late 40's, it provides a peace of mind that should one of us need to make a claim, the other spouse won't have so much of a drain on retirement assets.

    Bookmark   June 9, 2008 at 12:01PM
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This begins to sound like the quip that banks will only loan money to people who don't need it. If you're healthy and young you get a low rate on LTC insurance -- but you pay tons over the years before you are likely to need it.

I'm curious about the total 'acey' will spend for a policy to be paid up in ten years.

I know, I know...they are selling INSURANCE, AKA the peace of mind mentioned by many posting here. It just seems one could invest quite conservatively and self-insure in many cases. I especially agree with the Smart Money clip that it's very expensive (total paid in) to buy LTC before age 65, even though premiums may be lower earlier.

Here's to everyone's health! May you never need LTC beyond the average couple of months at the end of the road -- better yet, never need it at all!

    Bookmark   June 9, 2008 at 12:18PM
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chisue, i did the math for myself. Assuming 8% after-tax gains, and assuming that 5% inflation, if I invested the premiums instead of buying insurance, i'd have enough for a little more than 4 months care by the time I'm 65, and a little more than 7 months by the time I'm 80. If you want an idea of the comparison between self-insure vs. buying the insurance. Many would look at those numbers and the chances of being in a nursing home longer than, say, 10 months (those 7 months of $ I'd have at 80 plus my 90-day waiting period which i better have the $ for anyway) and see a pretty clear choice to self-insure. For myself I didn't agree for a variety of reasons, but you are absolutely correct that self-insuring is a viable choice and probably the correct choice for a lot of people.

    Bookmark   June 9, 2008 at 12:58PM
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If I invested the 1722/yr at say 6%, in ten years I would not have enough to cover one year's stay. If (God forbid) I needed it next year, I would not have enough for one week.

For those fortunate enough to afford self insure, I say more power to them. But it's clearly not an option for me.
I hope I never have to use it. But I'm glad I have it.

    Bookmark   June 9, 2008 at 1:09PM
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Thanks to all of you for sharing. I bet we've covered this more thoroughly than any of the small-type policies! And we can understand what's being said.

    Bookmark   June 9, 2008 at 5:51PM
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The short answer to your question:

"I'm curious about the total 'acey' will spend for a policy to be paid up in ten years"

is $30,000.

I will post specifics when I have the policy in front of me, for I have the month window to tweak it or deny it before I accept it.

If I forget to post, remind me!!!!

    Bookmark   June 9, 2008 at 7:18PM
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It also makes a difference where you live. A facility or home care in NYC or San Francisco is clearly going to cost a great deal more than in St. Louis or Rapid City.

There was a short article in Smart Money magazine this month on a younger woman who bought LTC insurance only because she had watched her mother encounter serious financial problems as she aged - not enough money for home health care services, and forced into a Medicaid nursing home. The daughter had bought it for her old age, only to make a claim on it two years later when she suffered a serious back injury, went through surgery, and needed 7 months of care.

In our case, one year's worth of per individual premium doesn't even equal one week of what a good facility would cost, or about ten days of home health care.

Oh, another thing to investigate when purchasing LTC insurance: remember to check what their definition of 'disabled' is. Most require you not be able to perform at least 3 of the 6 ADL's (Medicare's standard). Our policy, negotiated through PERS, has a 2-ADL definition of disability. I believe most federal employees, who are often offered breaks on LTC insurance, also have the 2-ADL definition.

    Bookmark   June 10, 2008 at 11:53AM
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I just got the hard copy of the policy today...so the 30 day review begins....I will make sure it says what the agent and I agreed to, and will post more specifics in due course.

    Bookmark   June 16, 2008 at 6:50PM
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