What are your thoughts on Long Term Care insurance?

[Omy]

We don't have it, and we aren't planning to get it. Are we crazy? What are you smart people doing regarding this?

[Telecaster]

It is too expensive.  If you can afford it, you don't need it. If you need it, you can't afford it.

[wenchsenior]

I've watched a lot of relatives burn through incredible amounts of money needing care; often care lasted more than 5 years, so it's an ongoing worry for me.  We bought LTC insurance for my husband b/c he's the primary earner and I couldn't earn nearly as much were he to die or become ill. And we are in the deadly 'middle ground' of having enough assets for me to live off, but not if more than a small part of it were used up in a long term care situation caring for him. 

I wanted to buy LTC insurance for myself as well, b/c I have several chronic health problems that could potentially lead to needing care in old age and I don't want my husband to have to worry about drawing down his living money to pay for it, but those very conditions made me ineligible to buy LTC insurance at a price we were willing to consider.  So I'm planning on continuing to work beyond the point I otherwise would,  to accumulate an 'extra' 250K to try to help self-insure.

I can't imagine ending a long happy relationship by sending my partner into poverty b/c of my ill health.  I don't want to have to consider divorcing to protect one or the other of us from ending up in poverty b/c of the insane cost of medical care, but I would certainly consider it if it were to become necessary.

[Greystache]

I don't see this discussed much when LTC is brought up, but in my case I really think I would kill myself before I would go to LTC. I know sometimes you don't get to decide, like a sudden massive stroke or a traumatic accident, but if I were diagnosed with some degenerative disease like Dementia or ALS, I think I would just get my affairs in order, knock a few items off the bucket list and then end it all. My father spent the last few years of his life in a nursing home with dementia and I thought that was a fate much worse than death.  But to answer your question, we did not purchase LTC. Our "self insurance" fund is our home equity of approximately $700K. If the worst happens and I am unable to prevent going into LTC as discussed above, we could sell the house, downsize  and afford several years of LTC.

[pbkmaine]

DH and I have it as a group policy through his former company. It costs about $4,000 per year for the two of us (I am 63 and he is 71). It covers in-home care as well as nursing homes. We are very risk averse.

[SwordGuy]

"What are your thoughts on Long Term Care insurance?"

I think it should be called "National Health Service Benefits".   I think everyone should get it.   There should be no means test and no sucking the person dry financially to get that benefit.   We should just pay for it out of taxes and it should be there when we need it.

[Omy]

I would probably do the same, Greystache. Assuming I had the presence of mind to do so, I would move to a "right to die" state and call it a day. I can't imagine a scenario where I would linger for years in a care facility...just shoot me now.

My challenge is that I would spend everything to keep my husband alive (assuming those were his wishes). Maybe that's the answer...just get LTC insurance on him.

[freya]

I investigated options and decided not to get it.

The biggest problem with LTC insurance is that it does not insure you against the very thing that you are hoping to be insured for:  an extended nursing home stay (say 5 years or more) at $150K or more per year.  The way these work is that you're on the hook for the first 90 days, then they cover either 2 or 3 years of SOME expenses after that, with generally a fixed lifetime cap. 

The limitations on the expenses they'll cover, of course, means that when push comes to shove, you'll be fighting the insurance company to get those benefits - at a time in your life when you'll have great difficulty in doing so - and I'm sure the insurance companies are well aware of this.  Meanwhile, if you save the insurance payment and invest it, chances are you'll have that money in your stash to spend when the time comes, with no hassle or possibility of being denied.

It's harder to plan for a couple, but for a single person it's easy:  stash + home equity.  Alternatives to consider are a universal life policy that allows you to draw on the policy amount to cover health care expenses. The average nursing home stay is ~3 years, but if you have family members who needed longer stays for a medical condition that you might be unlucky enough to inherit, you might want to plan accordingly.  I have a very strong family history of Alzheimer's with multiple family members needing long term care for more than 5 years, so I personally am planning for 10 years.  I heartily agree with the poster who would prefer the one-way first class ticket to Switzerland option in preference, but dementia makes that kind of thing hard to pull off.

[Catbert]

I've thought about it and decided "no" several times (now in my mid-60s).   Because...

I'll likely to outlive my DH due to gender, age difference and health issues.  Up to a certain point I'm his LTC "policy". 

I have no children or other relatives that I feel obligated to leave money.  So if I use it all up on LTC (or hookers and blow) too bad for the rest of the relatives. 

If only I was alive I could afford 10K in LTC expenses a month within a 4% withdrawal rate.  If one of us was still living at home it would be tighter but still do-able for many years before running out of money.

Many people that got policies many years ago are finding that premiums at blowing up over time.   

[NV Teacher]

LTC insurance was invaluable to my aunt when my uncle needed care after a brain injury.  It didn't cover everything but it was enough that she didn't have to sell the family home to cover his expenses.  Another family member need care.  Initially it cost $2500 a month but increased almost monthly as he needed additional help.  At the time of his passing the family was looking at $10,000 a month.  Luckily he had savings and investments that were able to cover his costs again without selling the family home.  I bought a policy.  It's reasonably priced and gives me peace of mind.

[freya]

LTC insurance was invaluable to my aunt when my uncle needed care after a brain injury.  It didn't cover everything but it was enough that she didn't have to sell the family home to cover his expenses.  Another family member need care.  Initially it cost $2500 a month but increased almost monthly as he needed additional help.  At the time of his passing the family was looking at $10,000 a month.  Luckily he had savings and investments that were able to cover his costs again without selling the family home.  I bought a policy.  It's reasonably priced and gives me peace of mind.

Just read the fine print, where it says coverage is limited to 2-3 years and coverage is capped - i.e. it's unlikely you would get reimbursed anywhere near $10K/month.  I think a lot of people are buying LTC policies without realizing these limits, believing incorrectly that they are covered for the nightmare of extended, expensive nursing home stays.

I really wish you could buy a policy that covers all long term care expenses above a very high cap that you can set, like $300,000.  That would be true insurance (for a rare but catastrophic event), as opposed to the cost sharing which LTC policies are currently (because almost everyone will need long term care in some form).   Alas there is no such thing.

[dougules]

LTC insurance was invaluable to my aunt when my uncle needed care after a brain injury.  It didn't cover everything but it was enough that she didn't have to sell the family home to cover his expenses.  Another family member need care.  Initially it cost $2500 a month but increased almost monthly as he needed additional help.  At the time of his passing the family was looking at $10,000 a month.  Luckily he had savings and investments that were able to cover his costs again without selling the family home.  I bought a policy.  It's reasonably priced and gives me peace of mind.

Just read the fine print, where it says coverage is limited to 2-3 years and coverage is capped - i.e. it's unlikely you would get reimbursed anywhere near $10K/month.  I think a lot of people are buying LTC policies without realizing these limits, believing incorrectly that they are covered for the nightmare of extended, expensive nursing home stays.

I really wish you could buy a policy that covers all long term care expenses above a very high cap that you can set, like $300,000.  That would be true insurance (for a rare but catastrophic event), as opposed to the cost sharing which LTC policies are currently (because almost everyone will need long term care in some form).   Alas there is no such thing.

So what do you do to protect against the off chance of your spouse needing actual LONG Term Care?  We could probably self-insure for $100k for 2-3 years.   

Those policies should be called Medium Term Care if they aren't indefinite. 

[freya]

LTC insurance was invaluable to my aunt when my uncle needed care after a brain injury.  It didn't cover everything but it was enough that she didn't have to sell the family home to cover his expenses.  Another family member need care.  Initially it cost $2500 a month but increased almost monthly as he needed additional help.  At the time of his passing the family was looking at $10,000 a month.  Luckily he had savings and investments that were able to cover his costs again without selling the family home.  I bought a policy.  It's reasonably priced and gives me peace of mind.

Just read the fine print, where it says coverage is limited to 2-3 years and coverage is capped - i.e. it's unlikely you would get reimbursed anywhere near $10K/month.  I think a lot of people are buying LTC policies without realizing these limits, believing incorrectly that they are covered for the nightmare of extended, expensive nursing home stays.

I really wish you could buy a policy that covers all long term care expenses above a very high cap that you can set, like $300,000.  That would be true insurance (for a rare but catastrophic event), as opposed to the cost sharing which LTC policies are currently (because almost everyone will need long term care in some form).   Alas there is no such thing.

So what do you do to protect against the off chance of your spouse needing actual LONG Term Care?  We could probably self-insure for $100k for 2-3 years.   

Those policies should be called Medium Term Care if they aren't indefinite.

I wish I had an answer for you...

Both my father (cerebral amyloid with multiple brain hemorrhages) and my aunt (advanced Alzheimer's) were/are being cared for at home.  Expensive, but much cheaper than a nursing home (~$80K for round the clock home care vs $150K for a good nursing home).  My mother was able to save some $$ by limiting the aide's hours to only when she absolutely needed the help.

The average nursing home stay is ~3 years, so it sounds like you can handle the average situation if you go the home care route as long as you can.

There are universal life policies that you can pay into just like long-term care insurance.  You can draw on the policy for health-related expenses while the insured person is still alive.  This is apparently an increasingly popular option, but you'd have to investigate carefully to determine whether it's actually better than just saving and investing the premiums.