# Long Term Care insurance



## Marie5656 (Sep 30, 2017)

*I have only recently been hearing of Long Term Care insurance.  Lon mentioning that he plans to use his to supplement his rent in the Assisted Living place, got me thinking about it.  I did a quick search, and note that AARP offers it.  But I wonder, at 63, is it too late to consider buying it?  Would it be good for any senior housing similar to what Lon is moving to?   
I would like to talk with my husband about getting it for myself.  I am younger, and in better general health, so it is likely (though I hate thinking of it) that I will survive him.  I know I would not want to stay in my house after.  Any feedback would be helpful. Thanks
*


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## Don M. (Sep 30, 2017)

LTC insurance can allow a person the finances to find a nicer choice of living arrangements in their elder years.  However, the premiums can be quite high if a person waits until they are in their 60's to purchase such a policy.  We took out our policy over 25 years ago, and the premiums are still reasonable...although they do go up a few dollars a month every 4 or 5 years.  If you are thinking about such a policy, there needs to be a lot of "shopping" before setting on one...the prices and benefits vary widely...or at least they did when we got into that market.  We got ours from Bankers Life.  

Personally, I hope we never need to use it, and go quickly when our time comes...and all this money just goes down the drain.  But, if we need care in our later years, I would much rather go to a nice assisted living arrangement, than to become a burden to the kids...or go so broke with doctor bills such that we qualify for Medicaid, and get shuffled off to some mediocre State facility.


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## Aunt Bea (Oct 1, 2017)

Marie,

Take a look at the NYS Partnership for Long Term Care.  

It can be a useful tool in preserving your assets but it is expensive.

https://nyspltc.health.ny.gov/


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## GreenSky (Oct 1, 2017)

LTC is indeed expensive and I wish my mother had listened to me when I offered to split the cost with her.  She wound up with a massive stroke and lived in a wheel chair without ability to speak or use her right arm for the 15 years I took care of her in my house.  She lost everything including her 401K assets and her condominium.  Fortunately she was able to live in my home with help only 3 days a week.

If you have assets and qualify, there are single premium life insurance policies that can multiplye your premium if you need LTC.  For example, a 60 year old woman can deposit $100,000 which can yield $200,000 - $300,000 that can be used if benefits are needed.  If not, the death benefit obviously far exceeds the original deposit.  As a "bonus" the cash value is guaranteed to be no less than the original deposit.

While not for everyone, it can be a better alternative than paying $3,000 - $6,000 in annual premiums.

Rick


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## Lon (Oct 1, 2017)

MY LTC Policy was purchased as a retiree benefit when I retired at age 57. I have $38 monthly with held from my pension and the balance paid by my former company. Pretty good deal?


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## Marie5656 (Oct 1, 2017)

*Thanks everyone for your input.  I guess I may have to pass.  It is definately not in my budget.  It was just a thought on my part.   *


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## Redbird (Oct 9, 2017)

A topic worth more research on an individual basis. GreenSky's second paragraph describes some of the benefits of "hybrid" LTC policies that are developing. Advantages may include excluding the LTC benefit amount to be subject to spending down assets to qualify for Medicaid. Can be beneficial for couples so the well party does not suffer loss of all assets. This is my understanding, but please research for verification.


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## Lethe200 (Oct 11, 2017)

LTCi can be a valuable part of financial planning but frankly, the underwriting on it is much "tighter" than when we bought our two policies. We have what would probably be called 'Cadillac' or maybe 'Rolls Royce' plans - unlimited benefit period and 5% compounded inflation - most insurers will not even sell these any longer. 

Yes, they are expensive. They weren't when we first bought them, in our late 40's. Our premiums are now close to market, but because of the inflation rider each policy is currently worth $124K/yr tax free. The 5% increase is added every July 1st.

I usually recommend people buy them after 45 but before 50 or 55, depending on how physically fit they are. Even if you are in top physical condition, the premiums at age 60+ rise precipitously. 

The problem with insurance is that it's distressingly similar to getting a bank loan, LOL. Both banks and insurers are eager to offer their services (e.g., loans and insurance policies) to people who aren't really in need of them. They are, after all, businesses, not non-profits. It's the price of capitalism, for good and bad.

I would say that IF you have sufficient assets needing protection and IF you can afford $2-3K/yr in premiums, it MIGHT be worth getting LTCi. If not, until Medicaid updates its income regulations, a small amount (thus affordable) of LTCi benefit may actually lose you money in the end. AARP discusses the pros and cons quite thoroughly at https://assets.aarp.org/rgcenter/health/ib68_ltc.pdf.

The downside is that if you lack sufficient assets/income, you are at the mercy of the Medicaid program. And Medicaid varies from state to state (it's states that admnister it, not the federal government - the feds just supply matching funds). The current administration and GOP legislative majority has long supported trimming Medicaid and providing only block grants to states, meaning a set amount of $$$ to divvy up between children's program, poverty and disability programs, and all state-funded seniorcare needs, including Skilled Nursing and Memory Care.

I personally don't want to throw myself on the (non)mercy of the current GOP politicians, nor of the Libertarians. I have seen our local Medicaid-only facilities, and would hate to be there or put my spouse there. We helped my MIL find a wonderful eldercare facility near our home that was perfect for her, third-rated in the state, so we have faced the reality of what senior care costs in the real world. In our situation it's worth spending the $$$$ to provide financial safety, but it's always an individual decision.


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## mathjak107 (Nov 23, 2017)

Aunt Bea said:


> Marie,
> 
> Take a look at the NYS Partnership for Long Term Care.
> 
> ...




we have the nys total asset protection plan . so far this is our 4th year with no increases in premium .

we really wanted the plan not for the 3 years insurance but for the total asset protection and income protection for the community spouse after the insurance is up .


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## Uptosnuff (Nov 23, 2017)

I think, really, that whether or not to buy Long Term Care depends on your situation.  My husband and I had a son-in-law that sold these and asked us to buy one.  It would have been one of the "Cadillac" plans and I don't think we could have found a better one.  We sat down and really discussed it.  In the end, hubby and I decided not to go with it.  We decided that the money spent on premiums could be better invested and we could use that money for our "own LTC plan".  So far, I think it's working.  We are both in our late 50's and still working.  Over the past year, we have seen our investments skyrocket.  I am not as worried about health care costs as I was.  Also, sadly, we will not have any children to leave any inheritance to, if that makes any difference.


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## mathjak107 (Nov 23, 2017)

i always planned on self insuring . that was until we were featured in money magazine years ago and was pitted against their team of pro's .

in the end they were right and i was wrong .

in order to self insure that huge chunk of money has to be pulled out of the risk pool , set a side where it is safe ,secure and always ready  and that can mean low yielding investments.

with a ltc policy just the fact i could keep that money invested can easily pay the premium with just a small part of the gains .

as our estate attorney said , his practice is full of the self insurers ,who now realize push came to shove and impoverishment of the community spouse is a thought on the radar .

as tyson so elegantly said "everyone has a plan until they get punched in the face "

once the reality hits and there was no real plan other than the words we are self insuring ,the community spouse tends to go in to panic mode . folks also make the mistake of self insuring with money that is just left in the general pool of money that they draw from to live .

the 4% safe withdrawal  assumes that money can hit zero in year 31 .

so self insuring generally means we have no real plan other than cross our fingers. most who say they are self insuring really took no steps to do so other than the words .


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## oldmontana (Nov 23, 2017)

We have LTC with Transamerica.  Took it out 18 years ago when I was 65 and my wife was 59.

Our cost is $1,569 a year.  Coverage was in 2014 at to $208.00 a day ($151,840) max ... my coverage is for two years...hers is for three years and $227,760 Max Benefit.

In 2014 we had a choice of having a big increase in our premiums and keep the 5% a year increase in benefits or freeze the benefits. We took the freeze.

We have seen the type of home my mother in law ended up in as she had little assets and when they were gone she went on Medicaid.  If we need to go to a home there are three in our city that are nice but costly.

I hope like most insurance that we will not need it.


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## OneEyedDiva (Jan 18, 2018)

LTC is expensive as it is. From what I've read about it over the years, premiums can continue to rise. If you do decide to get it you'd want to buy it from a company that's rock solid to make sure they'll still be around. Another thing...LTC terms can be complicated. I researched policies, one being what AARP offers and they seemed basically the same. I was declined by our state health benefits program for LTC because of a couple of chronic conditions. I found out that the AARP plan would have declined me for the same reasons. I may have been your age or younger at the time. Regardless of the drawbacks, I think I would have felt more secure having a policy. So instead, I started beefing up my savings/investments so that I'd have the cash to use if I ever have to go into a nursing home. In addition, my retiree health insurance via Aetna pays for 120 days per benefit period (61 days after discharge from a home is a new period) so that's a help. But I've also researched much cheaper options like in home care, adult day care centers, etc.


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## Don M. (Jan 18, 2018)

LTC insurance is entering "Crisis Mode".  More and more insurers are bailing out of this market, and costs are soaring.  

https://www.msn.com/en-us/money/ret...r-millions-of-americans/ar-AAuOUQ7?li=BBnbcA1


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## Lethe200 (Jan 29, 2018)

Don M. said:


> LTC insurance is entering "Crisis Mode".  More and more insurers are bailing out of this market, and costs are soaring.
> 
> https://www.msn.com/en-us/money/ret...r-millions-of-americans/ar-AAuOUQ7?li=BBnbcA1



Yes, there's only 12 insurers in the LTC market currently. But you have to remember, that's 12 insurers for NEW policies. Existing policies are still in service by the insurer owning the block of policies.

Met Life exited the LTCi market several years ago. But its existing LTCi policies and the terms of those payouts, remains in effect as long as premiums are paid.

I told my DH when we bought our policies 20 yrs ago that the actuarial assumptions the insurers were using were underpricing the market, and that we should expect premium increases. 

We run the #s periodically for us. It's still worth it. Both DH and I have policies. The total annual premiums for both policies equals *one month or less* of care for only one of us, at any nearby SNC facility. We can stay at home and use the benefits for home healthcare, if we prefer. 

Either way, there is no way we could have invested the total premiums to be worth the benefits payable. Each policy is worth over $115K tax-free (before factoring in the compounded annual inflation increase coming up for 2018). That is a massive tax savings, the new tax reform law notwithstanding.

There's also an ancillary benefit to LTCi: once benefits begin paying out, premiums are suspended.

For everyone, LTCi or self-insured, it's good to remember:
- assuming health expense deductions remain (they were threatened by the reform bill but ultimately left in place), costs for Asst. Living medical services (not custodial) and SNC are classified as tax deductions over the 7.5/10% of adjusted gross income*.
_* for 2017 and 2018 the limit is 7.5% of AGI, then it reverts back to 10% AGI._


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## mathjak107 (Jan 29, 2018)

insurers originally went by the statistics that were based on a generation ago that showed a fraction of the usage  there is and so early policies were way under priced . i have not had an increase in 4 years now from gensworth . in the mean time the policy has been increasing the payout by 5% a year for inflation . .


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## oldmontana (Jan 30, 2018)

The Kiplinger Letter Jan 26, 2018 had this to say about LTC insurance.  It stated that premiums will likely stay the same.  Insurance companies have learned from past mistakes of pricing plans to low and having to jack up premiums 40% to 120%.


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## mathjak107 (Jan 30, 2018)

that is what happened . the insurers failed to realize there was so much more usage than the silly statistics you see thrown out there .   there are loads of healthcare professionals that took people like my father in to their home after a stroke and took care of him 24/7 that does not count in the nursing home statistics .

the stats were based on a generation ago when more were  cared for by family . that split up more siblings , split up more families as one sibling stepped up and the others stepped back as well as  caused endless careers to end  so relying on children has diminished greatly .

insurers also  learned that  those with insurance will use it


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## OneEyedDiva (Jan 31, 2018)

Don M. said:


> LTC insurance is entering "Crisis Mode".  More and more insurers are bailing out of this market, and costs are soaring.
> 
> https://www.msn.com/en-us/money/ret...r-millions-of-americans/ar-AAuOUQ7?li=BBnbcA1


This is exactly why I was leery about a LTC policy, though if I could have gotten one through our state retiree benefit program, I may have done so.  I read that LTC policies were subject to increase over time but I never dreamed a policy would increase by 90%. That seems like highway robbery... is it even considered legal?! It's just awful that the wife had to take a part time job and this couple had to scale down their retirement lifestyle.  Just crazy!


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## mathjak107 (Jan 31, 2018)

the 90% was because the early policies were way off base . usage and expenses were far greater  . policies today are far more stable


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## Lethe200 (Feb 1, 2018)

Another factor to think about - this sentence was clipped from a discussion I participated in at another forum, and here was my answer:

>>inthe U.S., a child is not financially responsible for the parent.>>


Ummm....sadly, not strictly true. The states that have filial laws don't currently enforce them, but they ARE on the books. The number of states fluctuate; some have repealed them but many have not – the total seems to be anywhere from 27-30 states that still have filial responsibility laws.


(excerpted from one website)....These laws, called filial responsibility laws, obligate adult children to provide necessities like food, clothing, housing, and medical attention for their indigent parents. According to the National Center for Policy Analysis, a conservative research organization, 21 states allow a civil court action to obtain financial support or cost recovery, 12 states impose criminal penalties on children who do not support their parents, and three states allow both civil and criminal actions.


I did find an August 2017 article but it discusses the filial laws in relation to the 2012 Pennsylvania court decision that upheld a filial responsibility judgment:https://www.thebalance.com/what-is-filial-responsibility-3974828.The article is short and did not bother updating the estimated figure of states as of 2017 who still have filial laws in place.


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## mathjak107 (Feb 2, 2018)

the pa case that was upheld had a whole lot of extraneous circumstances to it and was not just a case of the kids are responsible for their parents long term care costs . there was a lot to this story that prompted that case to be upheld .


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