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Opinions on longterm care insurance please

Posted by Lainy (My Page) on
Tue, Sep 9, 03 at 23:52

This seems to be the current 'trend' in must-have insurance coverage, being pushed by everyone from insurance agents to banks and financial institutions. Now I admit that the cost of longterm in-home care, if needed, can be devastating. However, as in any type of insurance that isn't required (basically anything other than auto insurance, or homeowners if you have a mortgage, is strictly up to you and your budget), it's a cr#pshoot. (Gotta love Chris Rock's routine on insurance: "We buy insurance in case $*!t happens. So if nothing happens, shouldn't we get a refund?!?")

Anyway, I figured out that IF I were to buy one of these policies now and live to be 98, over time I would end up paying out more than $60,000 in premiums for coverage that would pay up to $3500/month for longterm health care IF I should ever need it. I couldn't borrow against this kind of policy (as is possible with life insurance) nor does it pay dividends. I am already paying almost $6000/yr for car insurance (male under-25 driver in the household) plus $2600/yr for homeowners insurance. At the moment, I don't even have basic health insurance because an individual policy would cost me $12,000/year in premiums. Where does it all end...?

But I am wondering what the overall opinions of THS members are, regarding the value of longterm health care insurance. Do you have or would you get it? Do you think it is more or less valuable than other types of "catastrophe" insurance? If you were to buy it, at what age do you think it makes sense to start? The younger you are, the lower the premiums but the longer you pay them; the older you get, the higher the premiums... so it sounds as if it all comes out to the same amount of money in the insurance company's pocket in the end (what else is new).


Follow-Up Postings:

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RE: Opinions on longterm care insurance please

Dave Ramsey says that long term care insurance is more important than life insurance for most of us. I think life insurance is very important if you have young children or a non-working spouse. If you are concerned about the mechanics and/or premiums of this particular long-term care policy, check around and see if there is something better out there.


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RE: Opinions on longterm care insurance please

My daughter is a nursing home administrator. She insisted I get LTC insurance. She doesn't want me to have to go to a bad nursing home because I couldn't afford anything better!


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RE: Opinions on longterm care insurance please

We have LTH thru DH's retirement. Los Angeles checked out many programs and came up with what they felt the best was. It covers both at home care and nursing homes. But it is limited to the number of years at the nursing homes. I think it is thru Trans American. There are many plans out there and you need to be very careful. It is like any other insurance plan. You pay for something you hope you never need. Unless you are mid 40's etc, I would wait, but start puting money into savings accounts. There are some limitations to time. You say you don't even have life insurance, so I would think that would be more important especailly if you have a family, or plan to have one. You don't have to have a super large policy, you can get something for 25,000.00 and work upwards.
Marie


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RE: Opinions on longterm care insurance please

Marie, it's just me and my son who is 19, and so if anything happens to me everything will automatically go to him. As I get more, er, up in years, I will put his name on the house deed and bank accounts so that those things won't be included in the estate. He already has an inheritance from his father so unless he decides to start collecting expensive Italian sports cars, any additional life insurance money wouldn't make much difference unless it was from a huge policy with premiums that I couldn't really afford. :-)

I realize that the idea of the LTC policy is to prevent the expense of a long illness from depleting whatever assets of mine that my son will eventually inherit, so to my mind it serves much the same purpose as a life insurance policy would. The difference being the cost of the policies and the fact that a life insurance policy can be cashed in or borrowed against, if needed, and eventually the company WILL pay out SOMETHING to the heirs; whereas the premiums for LTC are gone with the wind if never used.

You said that your plan covers both homecare and nursing home costs but "is limited to the number of years at the nursing homes." I'm confused. What if you don't go into a nursing home at all but just need to have home care? Are the benefits limited to a certain number of years for homecare too? Or does the policy pay for a set number of years at a nursing home and then unlimited at home? If it were me, I would rather pay 3 times as much and live in my own home with care, than spend any time in a nursing home. My mother had to be in one for a short time and even though it was supposedly one of the best around, it was horrible. I'd truly almost rather be dead than live in one of those.


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RE: Opinions on longterm care insurance please

The policy will define the terms of coverage. Those might vary from policy to policy. I've not seen one that covered you forever. LTC and Home care might even be different policies each with its own expensive premium.

If you have significant assets to protect a lawyer and a finacial planner might do a better job then insurance alone. As I understand it a transfer of assets is the only way to avoid having everything go to pay for LTC. Your lack of regular health insurance is a huge risk. You mention spending large sums of money on home and car insurance yet not being able to afford health insurance. That means you are living beyond your means...

: )
michael


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RE: Opinions on longterm care insurance please

I did speak with the financial planner at my bank, and according to him, as long as I put my son's name as JTWROS on the house and bank accounts at least three years before any necessity to attach assets as a result of LTC, legally those assets cannot be taken to fund LTC because they would belong as much to my son as to me. Supposedly, only assets that are owned solely by the person needing the care are able to be 'taken' for that purpose.

Unfortunately my car insurance premium is a result of having a 19-year-old male driver in the household, and there isn't much that anyone can do about that for the next six years. The homeowners was the lowest premium I could find that would cover MOST (not all) of the replacement value of our house in the event of a catastrophic loss.

My beef with healthcare insurance is that it's no longer possible to get hospitalization-only, without major medical (as used to be the case years ago). As I mentioned, it would cost me almost $1000/mo for a policy that would cover myself and my son. For the past five or six years, neither of us has had doctor visit or pharmacy expenses totalling that much for an entire YEAR, let alone a month. I had a dermatologist appt yesterday which cost $125 for the visit, plus $100 for a biopsy fee, plus $45 for a prescription. That's still $730 less than I would have paid in a premium just for the month of September, so I figure I am that much ahead of the game. In short, I'm not worried about being able to pay for routine medical care involving anything short of major surgery. It's the major surgery/hospital stay expenses, which can easily run into tens of thousands of dollars, that I would like to have some kind of insurance for. But you can't buy hospitalization-only health insurance nowadays. Just like the cable TV companies, they make you pay tons of money every month for stuff you may neither want nor need.

I didn't say I couldn't afford health insurance; I simply decided to stop putting $12,000/year into the insurance company's pocket when they will probably be "giving" less than 10% of that back to me in claims.


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RE: Opinions on longterm care insurance please

I ,too,wonder if LTC is right for me.I am 78yrs and in good health but do live alone.Can one get just home help insurance?What seem to be the best insurance companys?High high is the usual deductable?
M. Harmon.


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RE: Opinions on longterm care insurance please

Lainy,
Sometimes it is not a matter of the assets being "taken" to cover LTC. It is the simply what it takes to pay the cost of LTC.

Your son should deplete your jointly owned assets to care for you should you need it. LTC insurance protects both of you against the cost of LTC, which is exorbitant.

My mother, the great financial planner and way ahead of her time, purchased her company's LTC policy when it was first offered. She was diagnosed with lung cancer five years after retiring and could no longer live in her own home. I tried to keep her there as long as possible, but she couldn't manage stairs and eventually needed around the round the clock professional nursing care.

As she got worse, her level of need (and the cost of the care) became greater - more than $5,000/mo. I never had to worry about the financial aspect of any of this as the LTC company was there to pick up the tab. It was so important for me to be with her and focus on her care without worrying about financial ramifications.

I never had to deny her any comfort or need, because the insurance was there. She (we) went to a very nice assisted living facility with on call nursing. She had two rooms which allowed me to stay with her night and day. She lived only seven months after her diagnosis and it was heart wrenching. LTC Insurance paid for it all.

I guess you can tell I am an advocate, so much so that when my company offered it, I jumped on it so fast! To cover my husband and myself, (both early forty) is around $60/month. While I hope we will never need it, it's something that will save us if something awful happens. We don't have much, but it won't get wiped out either.

There is a choice of in-home or nursing home care, or simply an allowance that allows you to do either. There is a maximum benefit amount, but I think it would have taken about five to ten years to max out, depending on level of care needed.

It is more affordable now, when you are younger, than when you are older. My 70-year (very healthy) father managed to get it, but probably pays $1,000/month. It was offered through his daughter-in-law's insurance company, at that age you may not be able to buy it off the street.

Sorry long post, but I wanted you to know that it is NOT a waste. It saves your assets and allows you peace of mind that you will have quality care should you need it and you will never be a burden.
Good luck deciding!
Val


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RE: Opinions on longterm care insurance please

I remember hearing that we have about four times as much possibility of being disabled (i.e. unable to work) for an extended period during our lifetime as of dying.

For the breadwinner, would it be as useful to purchase income replacement, during one's years of employment, to replace one's regular income, rather than specifically long-term in-home care by caregivers or nursing home care?

If you were disabled, so lacking regular employment income for a substantial period, but not in need of an outsider to care for you, you'd still have to buy groceries, heat, probably some car maintenance, etc.

Different story, of course, after regular retirement - and different level of fees, also.

I'm not too enthused about putting your offspring's name on the title to the home - I've seen some people who ended up on the street at advanced age, sometimes at low income, after they'd done that. One was a good friend of my landlady, who was herself over 80 (she lived to within 4 months of 105 - a sweet lady, whom everyone in the village loved).

Our attitudes and ideas change over the years - so do our offspring's. Who knows how they'll look at things in ten years or so?

Is your 19 year old male helping to pay for the auto insurance surcharge generated by him? Does he have any idea of the benefit that he's getting?

Good wishes to you and yours,

joyful (at enjoying good health)


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RE: Opinions on longterm care insurance please

"I remember hearing that we have about four times as much possibility of being disabled (i.e. unable to work) for an extended period during our lifetime as of dying. "

and all along i've been under the sad delusion that dying is a certainty. no wonder you are joyful! :)


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RE: Opinions on longterm care insurance please

Hey, quirky - you caught me out, all right.

Can I change the parameters, please?

... about four times as much possibility of being disabled (i.e. unable to work) for an extended period during our working years ...

The issue is being unable to provide income for the family to live on - which occurs whether one becomes either dead or disabled. Mitigated sometimes by employer's disability insurance plan - but in fewer circumstances in recent years, as many employers reduce the kinds and levels of benefits that they offer.

In the case of death, once the funeral is paid for, the former wage earner doesn't need food, clothing, shelter, hospital care, medication, therapy, etc. as may be necessary in case of disability.

Good wishes for good health throughout your life: disability nil, death only once.

joyful guy


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RE: Opinions on longterm care insurance please

The other issue is, once you're dead, you stop costing money. So life insurance really only needs to be income-replacement for the time frame that you decide you need income (for me and DH, it was while the kids are at home; we only have enough life insurance to pay off the mortgage, our only major debt--it wasn't to provide continuing income).

When you either become disabled or need long-term care, not only can you not earn any money, but you COST money. Tons of it.


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