[2008] Does Long Term Care insurance make sense?

[Jennie]

I remember that they were very strict with blood pressure and osteoporosis.

My husband was 59 and "had never been sick a day in his life" as the saying goes. He was retiring from 30 years in a physically taxing law enforcement job, with months of unused sick leave that was paid to him in cash. But, he has been on medication for high blood pressure for years. There is a strong family history of it, yet most of his relatives on both sides live well into their 90's with no serious illnesses or disability.

His mother is now almost 94 with mild dementia but great physical health. Last year we returned to a timeshare resort to find that the elevator was not working. After waiting in the lobby for 1/2 hour for a repair person to arrive, Mom decided to walk up the 8 flights of steep stairs so that she would not miss a favorite tv program. We were "huffing and puffing" trying to keep up with her. She has had hypertension since adolescence but has never been in the hospital except for childbirth, and one incident of the flu last year (speedy recovery).

Hubby was accepted for LTC but with a 20% surcharge. My acceptance came within a week. His answer was delayed 2 months. Our agent (who was a personal friend) said that if hubby were older and had had any periods of hospitalization, however brief, he would probably not have been accepted at all.

 

[Rose Pink]

I guess I'm in a minority here.

We too (in our early 50's) recently went through the long term care insurance discussion w/ our financial planner as well.

If I'm so sick that I cannot live the quality of life I want, at home, I'm not going to want to live in some assisted living place with little to no real quality of life.

Do you watch Dexter? I'll be looking for the Key Lime Pie exit strategy.

Your post struck a chord with me. You are not in the minority. Many people (most I would venture) say they do not want to be kept alive when quality of life becomes, not life, but prolonging death. Very few of us choose life "no matter what the cost" when we are healthy and making out our advanced directives (living will) And I've never heard anyone say they want to live in a nursing home.

However, when it comes right down to it, we mortals are frightened of pain and dying and even those who have opted for a do-not-resuscitate directive will call for an ambulance in the middle of the night when the pain and loneliness and darkness become overwhelming.

I've seen it time and time again with my mother, my FIL, as well as patients in the nursing homes and hospitals where I have worked. We may say we would rather die than live that way, but when it comes down to the wire, we very often grasp at life--no matter what the cost.

And, too, there is the issue of being able to make an informed choice. If you should suffer a stroke or other injury that takes away your ability to make and eat "Key Lime Pie" you may end up in an extended care facility simply because no one else is going to place it in your feeding tube.

Having worked in nursing homes, I dread ever having to live in one. And yet, statistics say many of us will end up there for one reason or another. Maybe not as permanent residents but at least for some period of time.

Do I have LTC insurance? No. For the same reasons you gave--it is more than we feel we can spend given all the other "right now" needs we have.

It's a tough choice.

 

[MuranoJo]

Until such time that someone invents an "I'm out of here device", think thru the scenario of requiring long term care. With no kids, the only option is for your significant other to be the full time care giver and nurse. The job description would INCLUDE bed pan changing, and much worse. Yes, the insurance premium takes away quality of life today, but think about the quality of life tomorrow for both patient and care giver.

Sounds like your only option is government provided Medicaid. With that program you are limited to the very bottom-end of care facilities, e.g. "One Flew Over the Cuckoo's Nest".

This is a very similar argument I presented to hubby who was resisting getting LTC through my group John Hancock policy at work. Honestly, it was a very reasonable cost, although I'm not sure how much it will go up if I retire. (Kind of similar to the life insurance discussion we had years ago.)

I have seen what major health issues can cost a family financially and emotionally, and I felt this was something we just had to do.

Hubby's favorite saying used to be, "When I get to that point, just take me out to the desert and shoot me." I told him he'd have to rig that up himself, as I wasn't going to help him.

 

[Kal]

This is a very similar argument I presented to hubby who was resisting getting LTC through my group John Hancock policy at work. Honestly, it was a very reasonable cost, although I'm not sure how much it will go up if I retire. (Kind of similar to the life insurance discussion we had years ago.)

I have seen what major health issues can cost a family financially and emotionally, and I felt this was something we just had to do.

Hubby's favorite saying used to be, "When I get to that point, just take me out to the desert and shoot me." I told him he'd have to rig that up himself, as I wasn't going to help him.

I think many people think that way and just put their head in the sand on how are they really going to survive in serious, non terminal health. Even more they just think their spouse will take care of them. They don't begin to consider what situation (incl age and ability) the spouse will be in at that time. Frankly, it's a very ugly choice where LTC insurance is too costly today and the cost of LTC is enormous later.

For me, I've had LTC insurance for many years, but even now I'm worried that the premiums will have to increase given the cost of health care on a broad scale.

 

[MuranoJo]

I think many people think that way and just put their head in the sand on how are they really going to survive in serious, non terminal health. Even more they just think their spouse will take care of them. They don't begin to consider what situation (incl age and ability) the spouse will be in at that time. Frankly, it's a very ugly choice where LTC insurance is too costly today and the cost of LTC is enormous later.

For me, I've had LTC insurance for many years, but even now I'm worried that the premiums will have to increase given the cost of health care on a broad scale.

When people think through the real scenario of helping a loved one who is totally dependent on them, the first thing that crosses my mind is: Would I want my spouse cleaning up after me, helping me to bed when he can barely walk himself, etc.? I opted for a LTC that provides in-home support that keeps you close to loved ones as long as feasible.

 

[Kal]

When people think through the real scenario of helping a loved one who is totally dependent on them, the first thing that crosses my mind is: Would I want my spouse cleaning up after me, helping me to bed when he can barely walk himself, etc.? I opted for a LTC that provides in-home support that keeps you close to loved ones as long as feasible.

PRECISELY! That's exactly how my policy works. Of course an important feature is what are the minimum criteria which must be met to trigger LTC coverage. Mine requires 3 of the 5 basic daily functions. Other policies require all 5.

 

[pgnewarkboy]

Ending it all vs LTC

I don't see this as an either/ or situation. I am surprised to see people who have severe problems, including some stages of dementia, that are glad to continue and enjoy their life for as long as they can. They must, however, have help to do so. There are many conditions, such as MS, that at some point qualify people for long term care but where the people still have their faculties and find some joy in life.

 

[vacationhopeful]

When the elderly stay in their own houses, I have noticed that they become very isolated - esp if one of them is housebond or he/she lives alone. When my Mom needed by Dad's "supervision", I had to have several forceful conversations with my sister (living 3,000 miles away) that she had 2 elderly parents. Putting Mom in a nursing home would not help Dad alone at the house. I had arranged for companion care (babysitting to a large degree) for my Mom for a year, but my Dad greatly benefitted from the social interaction.

 

[rapmarks]

my two aunts have long term care insurance, Genworth. They are 88 year old twins. In Jan, they moved to assisted living, but the 3rd floor has an alzheimer's unit. the one aunt has alzheimer's , her insurance kicked in, for the rest of her life, she will receive a check toward the cost. the other aunt does not have Alzheimer's, but has mild dementia. she has her medication given to her, walks with a walker, falls constantly, has to be assisted in the shower, gets all her meals, etc, but the policy does not kick in because she does not need skilled nursing. Her income is less than half of the cost so we have to pay the rest and also pay her premiums. She definitely is in worse shape than many people in nursing homes. when they started the policy, the idea of assisted living didn't exist.

 

[easyrider]

We are using Trans America LTC for my wifes parents. The cost is around $580.00 a month for both of them. The payouts are for different benefits at so much per day after an elimination period. Both have been in the nursing home a couple of times and both are living in their home with a care giver now.
Even with the help this policy provides with expenses, it is more important to have some one designated to keep track of policy as it only pays when it is charged a bill.

When a person grows older they go through what can be described as the dwindles. This can make it very hard to understand the volumes of paperwork involved in health care.

As a person ages and if they want to leave assets for a spouse or children the formation of a family trust or a corporation can protect these assets.

Long Term Care isn't needed as much, or at all, if a person impoverishes them self by gifting their assets to a trust. There is a five year look back and after that assets are safe from medical expenses.

When you decide to establish a TRUST would depend on if you have LTC and your health. Some without good medical insurance or LTC get the TRUST going early, around 55, so by 60 their assets are protected.

If you died or became ill at 60 and your spouse had to pay all your bills it could lead them to bankruptcy fairly fast.

That would be a bummer. So plan for the worst and hope for the best.

 

[Zac495]

We just got these quotes - We are both 51 - and this information (this is actually a friend who sells this - we are also looking through the school district I work for - he is comparing a quote we got with them.
Hey Ellen,

I received the LTC quotes back from John Hancock, Genworth and Prudential. Here are my comments/findings:

1) The group policy is offering a daily instead of a monthly benefit. I'm not sure how much the premium difference would be, but monthly provides a better benefit. An example is when someone is in need of care, they may not need it every day. The days that care is needed maybe for a full day shift and cost greater than the $200/day policy limit. By having a monthly $6,000 limit, it allows the person to greater control how the care is provided. I would like to know what the group policy would charge if it were a monthly benefit instead. The bottom of the quote does say it is available.

2) Regarding the inflation benefit, the group policy is offering a CPI (consumer price index) inflation option instead of 5% compound inflation normally recommended as we discussed. The 5% compound is a more expensive benefit, but one that is very important to obtain.

3) To help control premiums, I normally recommend using a longer elimination period. This does mean you would need to pay more out of pocket costs if/when a need arises, but I try to protect against the long-term need of my clients and they can afford a 6 or 12 month nursing home expense. They want to protect against the 5-10 year need.

With these two recommended changes ($6,000/mth instead of $200/day, and 5% compound inflation instead of CPI) the quotes for these three companies are as follows:

90 day elimination 6 mth elimination 12 mth elimination

Genworth = $4,158 $3,906 Need to Obtain (NTO)

Prudential = $3,295 NTO NTO

John Hancock = $5,066 NTO NTO

Please find out what the group plan would charge for those changes and the 90 day, 6 mth and 12 mth elimination periods. I'll follow up with the brokerage firm to ask for additional quotes as noted as NTO above.

We can then reconvene after this info is obtained to determine how best for you to proceed.

If you have any other questions, please let me know.

 

[MuranoJo]

I can't find the source right now, but I've read that the average nursing home stay is just a year. Now, that's supposedly 'average,' but there definitely are exceptions--I have an Aunt-in-Law who is 97 now and has been in a nursing home now for about 5 years.

 

[Zac495]

I think many people think that way and just put their head in the sand on how are they really going to survive in serious, non terminal health. Even more they just think their spouse will take care of them. They don't begin to consider what situation (incl age and ability) the spouse will be in at that time. Frankly, it's a very ugly choice where LTC insurance is too costly today and the cost of LTC is enormous later.

For me, I've had LTC insurance for many years, but even now I'm worried that the premiums will have to increase given the cost of health care on a broad scale.

We are in the process of buying LTC (lazy us - we haven't filled out the paperwork yet - but we have it But I thought the premium was fixed??

We are choosing Genworth with 180 day "deductible" ... I think.
We are both 51 and very good health, weight, blood pressure, etc. I did have heart surgery as a kid, but I'm totally fine.. Here's hoping. I think they said the policy would be about 3000 a year for both of us.

Editing - I didn't realize I posted recently... But this post is more about premiums going up or are they fixed.

 

[Liz Wolf-Spada]

We bought into the California PERS program when it opened about 15 years ago. When they offered a new option with better benefits for "in home care", I chose to go to that plan and I was ticked that they wouldn't keep my cost at the age rate that I originally bought in. At that time, my husband was already 65, so changing to that better policy for him was prohibitive. They don't raise "your" individual policy, but they have raised the cost more than once over the years for all policy holders.
Liz

 

[Kal]

We are in the process of buying LTC (lazy us - we haven't filled out the paperwork yet - but we have it But I thought the premium was fixed??...

If you can get thru the first 5 basic health questions, you'll be fine, but if any of those have a YES answer, they won't issue a policy. The balance of questions will establish your premium rate.

My policy is by Genworth and they were the top rated company with a long history of never increasing premiums. We purchased the policy 10 years ago then a year ago they increased the premium by 20%. That was the first increase in at least 9 years (but much longer for others as I understand it). I don't know what increases will be made in the future but paying a higher hefty annual premium could hit the tipping point.

Our policy is a joint structure where either spouse can draw on it, but not both. Statistics show it is highly unlikely both spouses will need LTC simultaneously.

 

[easyrider]

Our policy is a joint structure where either spouse can draw on it, but not both. Statistics show it is highly unlikely both spouses will need LTC simultaneously.

My inlaws were both in and out of the nursing homes last year. The cost was arround $13,500.00 per month with them having to pay about $4000.00 and the LTC insurance picking up the rest. So far Transamerica has paid out over $160k on these policies. So far the inlaws have paid about $15k on premiums and $50k on co pays.

At one time they would not have wanted to be a burden on anyone when their health dwindled but now they plan on living forever. We have hired a live in care giver for them costing about $36K per year. Other care they recieve is from an elder care company that comes in for 3-6 hours a day to give the live in care giver a break.

It cost a bunch to get old and stay home. I used to say just pull the plug if Im in the dwindle but now realize theres alot more to it. It sounds good at 50 but in reality it doesn't sound good at all after 70.imo

 

[Rose Pink]

We have hired a live in care giver for them costing about $36K per year. Other care they recieve is from an elder care company that comes in for 3-6 hours a day to give the live in care giver a break.

36K is a bargain. Where did you find such a person? Is it a CNA? I've heard so many scare stories about abuse: physical, emotional and financial. I know good caregivers are out there, too.
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I have a friend who worked in a nursing home for many years. She told us to never make our children promise not to put us in a nursing home. She said that a nursing home may be the only responsible care and it isn't fair to make our children feel guilty about putting us in that care.

That said, I want to take another look at LTC insurance this fall when it comes time to sign up for next year's benefits. I'm afraid I've waited too long. I am not in good health and I think I'll get turned down.

 

[cmh]

A couple of things about large group LTC plans......

Only One Guaranteed Acceptance Period - I've seen some post here that they'll look into it at their next benefits enrollment period. Typically, employees have only 1 time for guaranteed acceptance - for new hires, when they're first eligible for all other benefits or for existing employees, when the group LTC plan is introduced initially. If you don't enroll during your one guaranteed acceptance period, then any time later, your acceptance is dependent of proof of good health. So you want to take advantage of the initial enrollment period for you. Also, with many plans, you can apply any time of year by submitting an application with a completed health questionnaire, and if approved, coverage is effective the next month. So you don't have to wait until the annual benefits enrollment time once you've missed your initial offering. In fact it may be a good time to consider LTCI when you are not distracted by other annual enrollment benefit decisions & their deadlines.

Do benefits or premiums change when you terminate or retire? Fully portable plans, neither your benefits nor your premium changes when you terminate or retire; maybe the premium payments method changes from payroll deducted to a direct bill basis.

 

[MuranoJo]

A couple of things about large group LTC plans......

Only One Guaranteed Acceptance Period - I've seen some post here that they'll look into it at their next benefits enrollment period. Typically, employees have only 1 time for guaranteed acceptance - for new hires, when they're first eligible for all other benefits or for existing employees, when the group LTC plan is introduced initially. If you don't enroll during your one guaranteed acceptance period, then any time later, your acceptance is dependent of proof of good health. So you want to take advantage of the initial enrollment period for you.
Do benefits or premiums change when you terminate or retire?

Execellent points. With my company's large group LTC plan, they offered it many years ago open to all employees and employee families, including parents. I tried to talk the family including in-laws into jumping on it, but we were quite a bit younger then and the in-laws refused to consider it, so we all passed on it. Two years ago, they offered it again, and I jumped on it and drug hubby along (he had to go through a physical first). The rates are very low compared to what I'm seeing posted here, but I am not positive if the premiums change if you retire, so need to follow up on that. (Somehow was under the impression they wouldn't, but that's probably a dangerous assumption.)

 

[Kal]

...Do benefits or premiums change when you terminate or retire? Fully portable plans, neither your benefits nor your premium changes when you terminate or retire...

I would read every word in the policy to verify it states the annual premium will never change.

 

[cmh]

I would read every word in the policy to verify it states the annual premium will never change.

I didn't say the premiums will never change. Please reread my post. People are often concerned that their rates or benefits change when they terminate or retire because that's what often happens for other group benefits like life insurance for example. When someone terminates or retires, LTCI premiums & benefits do not change because someone leaves the group.

ALL LTC policies retain the right to increase rates if need be, although the cost is based on the age when entering the plan or buying benefits. Many group plans also offer an initial rate guarantee period.

If you look at the history of premium increases for individual policies vs group policies, you'll see it's the individual policies that have had the increases, not the large group plans. Plus with a large group plan, you the have the benefit of being part of a large group with negotiating clout in the marketplace.

 

[teachingmyown]

Long term care is pricey and sometimes necessary. I hope that my Aunt and Uncle have it. I'm not close enough to their situation to know for sure but they are at that point. I'm guessing they are both in their mid-late 70's and they still both enjoy life and living, but with their medical conditions it isn't feasible for them to continue trying to live alone. The center they are considering moving into charges $75per person per day. With neither of them working (if they could work they wouldn't need assisted living arrangements) this will add up quickly. Even so, it seems like a bargain compared to other quotes.


Several years ago my mom and dad decided to pursue LTH coverage and made an appointment to speak with an agent. The week before the apt dad had a mini-stroke. It didn't leave a lot of physical damage (for which we are VERY grateful) but it certainly damaged their ability to acquire that coverage.

 

[purplenook]

So does long term Care insurance make sense?
Bob

Of course, it does..

Here's a good explanation of LTCi - http://www.completelongtermcare.com/resources/what-is-ltci.aspx


Dunno why people think that LTCi is just a waste of money. Did they ever think of the financial disasters of becoming uninsured? Most of us are unaware of the future health problems or disabilities that could happen in the most unlikely time. It's better to get insured earlier than suffer for the rest of your life.

Good thing about long term care insurance is it helps people protect their assets as well as protect their health. the average annual stay in nursing facilities costs a lot that could sweep your entire finances.

the best way to save on LTC is to plan ahead. Assess what your long-term care needs are, and weight your options. Always shop for a reliable insurance company. A good insurer will help you determine the best policy and will guide you through the entire planning process.

 

[Cathyb]

Great website

Of course, it does..

Here's a good explanation of LTCi - http://www.completelongtermcare.com/resources/what-is-ltci.aspx


Dunno why people think that LTCi is just a waste of money. Did they ever think of the financial disasters of becoming uninsured? Most of us are unaware of the future health problems or disabilities that could happen in the most unlikely time. It's better to get insured earlier than suffer for the rest of your life.

Good thing about long term care insurance is it helps people protect their assets as well as protect their health. the average annual stay in nursing facilities costs a lot that could sweep your entire finances.

the best way to save on LTC is to plan ahead. Assess what your long-term care needs are, and weight your options. Always shop for a reliable insurance company. A good insurer will help you determine the best policy and will guide you through the entire planning process.

Thank you for the informative website!

 

[Fern Modena]

Calpers LTC

In Post #21 above, I mentioned Calpers LTC Insurance. It is available to government employees in any jurisdiction in California (city, county, schools, etc) and their spouses and family members.

Besides having very low rates for good coverage, they also have a return of premium clause. If you should die before the age of 75, you will get a part of your premium returned, based on your age and if you had any claims. I know this is true, because they did this in Jerry's case.

Fern