Long Term Care Insurance?

[Zamboni]

If you have any special knowledge about long term care (LTC) insurance, then please share your insights or experiences here. I'm interest in any general information, insights, or experiences you have and I also present some cases here for feedback as well.

MOM: My 78 yo Mom is starting to have memory issues. She has not be diagnosed, and likely won't be any time in the immediate future since she has an intense mistrust of doctors. She is getting more paranoid and belligerent over time. My brother lives quite close to her and he is very concerned, but from what we can look up she is managing to keep her tax bills paid at least. They are in WA state.

She has always been extremely against the idea of assisted living or retirement communities of any kind. I'm 90% sure the reason she lives in WA rather than closer to me is that she told me I needed to promise to never ever put her in a home, and I told her that wasn't a promise I could make because I'm not a skilled care giver. So she lives by my brother, who is now feeling the brunt of the stress.

She is relatively poor (about $60K in money saved, no pension, small Social Security check, and owns her own modest home which has a value of ~$115K). Does LTC insurance make sense if there are no assets to protect? Will she just be rejected from coverage due to her age? He family members have all lived into their late 80's or 90's with varying degrees of cognitive function intact at the end (ranging from still completely sharp as a tack to can't recognize family members).

ME: I hate to admit this, but I'm starting to age. In my late 40's, I'm having balance and vertigo problems which has turned me into a fall risk in the past year . . . I've fallen several times :-(  which thankfully so far have only led to bumps, bruises, twisted ankles, and one bout of whiplash. I also have a congenital heart defect which was only recently uncovered when I started having pulmonary problems during sports. Ugh! Maybe I will just keel on the court? In some ways that would be ideal for me, although it would be quite stressful for the other people playing that day.

I have two teenagers and I do NOT under any circumstances want them to feel the stress about my elder care that we are currently experiencing with my Mom. If I had a way to buy into a good, flexible retirement community now, I would consider it. Honestly I might just look into this in my local area. I do have assets which are growing reasonably rapidly. Barring catastrophe, by the time I anticipate I would need nursing care, I will probably have a couple of million dollars in money/assets, but I will not have a reasonable pension.

My other half is very caring and in better overall health than I. But, I do not want our relationship to be stressed by basic life needs care issues. Are there good LTC plans for someone like me? What should I watch out for? What about plans for couples? We are in NC if state matters.

thank you in advance for any advice or stories you can offer.

[wenchsenior]

LTC insurance at your mother's age will likely be prohibitively expensive.  Back when I researched it about a decade ago, it was recommended (roughly, individual circs vary, of course) to buy around age 50-55, for those in the net worth category of 500K-2 million.  Buy younger, and you end up massively overpaying.  Buy later, and premiums are prohibitive or you are rejected.  Less net worth, and most people will just spend down their assets and go on Medicaid. More net worth, and one could probably pay for care out of pocket.  Caveats would be: If conditions like Alzheimer's etc run in the family, or if someone is intent on preserving some or all of even a modest estate, etc.

We bought LTC insurance for my husband when he was in his early 50s with minimal health conditions b/c we fall right in the net worth risk window. We did so b/c he's the primary earner and is 9 years older than me.  Cost was not cheap (~130/month), but is totally worth it for our peace of mind.  I was already deemed un-insurable by my early 40s for multiple reasons (they listed one chronic endocrine condition that is totally manageable, the fact that I drank wine with dinner every night (I since gave that up), and most surprisingly, the fact that my medical record showed multiple tests for miscellaneous autoimmune conditions like lupus and MS, even though those tests were negative). 

So my impression is that you have to be in nearly pristine health to qualify for LTC insurance/get decent rates.  If you think you might want the insurance and anticipate any health problems cropping up by your 50s, or even the possibility of being TESTED for any serious health problems by your 50s, you will want to try to get something locked it ASAP. 

As it is, I just plan to work until I have an 'extra' 250K saved (self-insuring).

[Zamboni]

Yikes! Sorry to hear they dinged you for things like having wine at dinner. Glad you got the LTC insurance for your husband, though.

My current employer dropped their LTC offerings right as I started working here. Perhaps the numbers just don't make sense for a lot of people? It sounds like they might not want to insure me already.

My Mom is being so hostile to the idea of any sort of non-family care anyway that she's just going to have to go the Medicaid route kicking and screaming once all her money is literally gone. She lives in a very rural area, so the options will likely be limited. It's sad to watch parents make so many bad financial choices in their lives. My main concern at this point is supporting my brother in his attempts to manage the situation and set boundaries with her.

[wenchsenior]

Yikes! Sorry to hear they dinged you for things like having wine at dinner. Glad you got the LTC insurance for your husband, though.

My current employer dropped their LTC offerings right as I started working here. Perhaps the numbers just don't make sense for a lot of people? It sounds like they might not want to insure me already.

My Mom is being so hostile to the idea of any sort of non-family care anyway that she's just going to have to go the Medicaid route kicking and screaming once all her money is literally gone. She lives in a very rural area, so the options will likely be limited. It's sad to watch parents make so many bad financial choices in their lives. My main concern at this point is supporting my brother in his attempts to manage the situation and set boundaries with her.

Aging family is very very tough. My father is in an isolated rural area, and won't leave his home unless he's literally incapable of fighting, but he does have some resources, though no LTC insurance. He used to scoff at it, insisting that everyone should be able to self-insure, but then he was a low-tax promoting libertarian type who spent his earning years bitching about the evils of SS and Medicare. He's sure changed his tune now that he's retired, though...constantly bemoans how wrong he was and how no old person should be expected to have pay so much for healthcare, food, etc.  He budgets down to the last penny of SS check and obsesses over his nest egg.  But at least he has some resources.

Both my mother and my husband's mother have essentially zero resources, not even home equity, just their tiny SS checks.  The bright side is, that takes away all the decision making.  There's only one option if they need LTC: destitution and then Medicaid.