Insurance Part 3: Long Term Care Insurance

[lockets]

Insurance is so confusing to me. I'm asking a few different questions here and welcome any help or suggestions! Here's the third question...

Something popped up on a health report for a family member that has my doctor recommending that I purchase a long term care insurance contract first and THEN get tested to see if I have the same issue. Thoughts?

I was reading LTC Insurance threads on DisBoards and it seems like they don't offer appropriate coverage levels anymore with nursing homes costing $10K+ per month. I certainly don't want to waste my money, but either way I should probably start looking into a policy, right?

I recall my grandmother had a really good one that she was paying $700 to $900 per month for (I can't remember exactly the cost, but it was definitely in that range and she was over 90 at the time), and it covered an in-house 24-hour aide so she was able to get her ultimate wish which was to die peacefully at home. We were extremely thankful she had that benefit and we had round the clock at-home care for her, no questions asked or extra money paid.

Are there any good ones out there I should be looking for?

What other ways are there to self-insure? Some folks on here say they are covering themselves in their elder years. It seems I would have to make a lot of money to do something like that, no?

 

[tvguy]

The younger you are when you buy LTC insurance, the lower the cost.
I bought my coverage in my 50s. My premium just jumped $900 a year to $3,400. My Financial Advisor did some checking and now that I am 65 that same coverage would cost me $7,000 a year if I purchased it at my current age.
My plan increases the amount if would pay by 5% every year. It currently pays $6,500 a month for 5 years.
My mom's care back in 2013 was $3,300 a month. At that time facilities ran from $2,000 a month for a plain jane facility, to $8,000 a month for a luxury senior living community.

 

[MillauFr]

The younger you are when you buy LTC insurance, the lower the cost.
I bought my coverage in my 50s. My premium just jumped $900 a year to $3,400. My Financial Advisor did some checking and now that I am 65 that same coverage would cost me $7,000 a year if I purchased it at my current age.
My plan increases the amount if would pay by 5% every year. It currently pays $6,500 a month for 5 years.
My mom's care back in 2013 was $3,300 a month. At that time facilities ran from $2,000 a month for a plain jane facility, to $8,000 a month for a luxury senior living community.

So your plan isn't even going to cover your monthly costs? That is the biggest problem with these plans. No insurance company is going to offer a plan that pays all of your expenses.

 

[Jml813]

So your plan isn't even going to cover your monthly costs? That is the biggest problem with these plans. No insurance company is going to offer a plan that pays all of your expenses.

Long-term care insurance does not cover 100% of anything in most cases. Most policies have exclusionary periods where nothing is covered for the first 30 to 90 days of a claim and then usually they have a percentage or daily allowance that they pay.

Long-term care insurance is great if you can get it young enough and cheap enough with enough benefits to make it worth it. A lot of the policies nowadays have tons of restrictions and don't cover enough, in my opinion, to make it worth it.

The average cost of assisted living or memory care is around 7 to 10,000 a month.

Former insurance agent here, make sure you ask about policy limits, exclusions, lifetime limits, and costs.

 

[cedricandsophie]

Our financial advisor has told us repeatedly, becsuse my husband kept asking, that long term care insurance is not worthwhile at least for us. We are in our 70s now but started considering it 20 years ago. We are lucky that we have sufficient assets to cover the last few years of our life if needed. But we are quite healthy at this time. His point was that it’s expensive, the premium increase with age and it oniy pays out for a few years and will not cover every expense anyway. Plus if you never use the benefit, all that money is wasted. He said if you are that concerned, invest the sane amount every year you would pay in premiums and watch it grow. If you never need it for care, then it’s available for anything else or to pass on to your kids.

 

[tvguy]

So your plan isn't even going to cover your monthly costs? That is the biggest problem with these plans. No insurance company is going to offer a plan that pays all of your expenses.

$6,500 would cover all my care expenses at current care home rates here. The 5% escalator hopefully will cover inflation. In my mom's case, her policy covered but $500 of her month expenses. Her $1,250 Social Security a month easily covered that. Plus she had a pension and monthly investment income.
Oh, and every LTC plan I have seen requires you to pay the first three months care bill out of your pocket before their coverage kicks in.

 

[LuvOrlando]

It seems that after Covid most of these plans vanished so my current plan is to be nice to our kids so they'll take us in if needed, worked for every generation in my family so it appears to be cheaper to help them get homes and deal with paying the taxes on that than trying to go it alone until the very end.

My in-laws were the only ones in a long line who chose to go it alone, they ended up with money, good insurance and no companionship and this doesn't appeal to me at all. They had the chance to bring SIL in years back but spurned them, bet this is bitterly regretted now.

 

[tvguy]

It seems that after Covid most of these plans vanished so my current plan is to be nice to our kids so they'll take us in if needed, worked for every generation in my family so it appears to be cheaper to help them get homes and deal with paying the taxes on that than trying to go it alone until the very end.

My in-laws were the only ones in a long line who chose to go it alone, they ended up with money, good insurance and no companionship and this doesn't appeal to me at all. They had the chance to bring SIL in years back but spurned them, bet this is bitterly regretted now.

We're all different. I could never do that to my kids. My mom had everything she possibly could planned for, and that still left me overwhelmed. Having to be her caregiver AND provide her financial support on top of that would have been a nightmare.

 

[MillauFr]

$6,500 would cover all my care expenses at current care home rates here. The 5% escalator hopefully will cover inflation. In my mom's case, her policy covered but $500 of her month expenses. Her $1,250 Social Security a month easily covered that. Plus she had a pension and monthly investment income.
Oh, and every LTC plan I have seen requires you to pay the first three months care bill out of your pocket before their coverage kicks in.

$6,500 might cover a run down facility in Stockton designed to house the indigent. A nice place in Sacramento is going to cost you $10k+.

 

[CdnCarrie]

$6,500 might cover a run down facility in Stockton designed to house the indigent. A nice place in Sacramento is going to cost you $10k+.

Maximum $3000 here with our Medicare system.
I feel bad for Americans. That’s an insane amount of money.

 

[tvguy]

$6,500 might cover a run down facility in Stockton designed to house the indigent. A nice place in Sacramento is going to cost you $10k+.

Helping a friend price them out, and a very nice facility is $6,500 in Sacramento. A Medicaid facility is running about $2,500 a month around here now.

 

[Dan Murphy]

Posted this a few weeks back on another 100 post LTC thread.

https://www.disboards.com/threads/do-you-have-long-term-care-insurance.3899746/post-64382285

 

[robinb]

Our financial advisor has told us repeatedly, becsuse my husband kept asking, that long term care insurance is not worthwhile at least for us. We are in our 70s now but started considering it 20 years ago. We are lucky that we have sufficient assets to cover the last few years of our life if needed. But we are quite healthy at this time. His point was that it’s expensive, the premium increase with age and it oniy pays out for a few years and will not cover every expense anyway. Plus if you never use the benefit, all that money is wasted. He said if you are that concerned, invest the sane amount every year you would pay in premiums and watch it grow. If you never need it for care, then it’s available for anything else or to pass on to your kids.

Our financial advisor also told us to self insure when we asked him in our mid 50's.

 

[robinb]

On the flip side, I have a friend who now has to impoverish herself to be eligible for Medicaid.

 

[tvguy]

Maximum $3000 here with our Medicare system.
I feel bad for Americans. That’s an insane amount of money.

If you can find a place with an opening. Took my cousins 2 years to find a place for their dad in Ottawa. As my cousin put it, Canada is awful at how they treat their seniors. As she put it, they just warehouse them. She was amazed that I found three places with openings for my mom in 2012.

 

[MillauFr]

Our financial advisor also told us to self insure when we asked him in our mid 50's.

Ditto. My financial advisor at Fidelity told me the plans currently offered aren't worth the paper they are printed on. The older plans like TVGuy purchased were a great deal and will continue to be so as long as the insurance companies don't go out of business or break the agreements.

 

[CdnCarrie]

If you can find a place with an opening. Took my cousins 2 years to find a place for their dad in Ottawa. As my cousin put it, Canada is awful at how they treat their seniors. As she put it, they just warehouse them. She was amazed that I found three places with openings for my mom in 2012.

That’s what interim care is for. Probably differs from province to province and you don’t always get your first choice.

Not seeing that the US is doing a better job with their seniors.

 

[tvguy]

That’s what interim care is for. Probably differs from province to province and you don’t always get your first choice.

Not seeing that the US is doing a better job with their seniors.

Not sure what they call it, just that there was a two year wait there as opposed to no wait here. My Uncle had to stay in the hospital until a slot opened. I guess you get what you pay for.

 

[CdnCarrie]

Not sure what they call it, just that there was a two year wait there as opposed to no wait here. My Uncle had to stay in the hospital until a slot opened. I guess you get what you pay for.

Again provincial. What you experienced in California probably not the same as in Texas. Same here Ontario may differ from Manitoba.
Yes the stay in hospital would be interim care.
Yes I think we get a lot for our money! Thanks for that.

 

[tvguy]

Again provincial. What you experienced in California probably not the same as in Texas.
Yes the stay in hospital would be interim care.
Yes I think we get a lot for our money! Thanks for that.

Well, my FIL lived in Texas and it was the same there with his care.