Author Topic: Long Term Care Insurance?  (Read 4198 times)

Ottoford

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Long Term Care Insurance?
« on: May 22, 2018, 01:00:49 PM »
We just placed my mother in law into a Memory Care Unit (Alzheimer's) at a cost of $7,300 per month.

This makes me nervous, so we applied for LTCI and were approved.  I'm 44, husband is 46.  We have a shared plan for $400,000 coverage (built in inflation increase of 3% annually).  As a shared plan the $400k can be used by one or both of us.

Total annual premium of $3,477 with Mutual of Omaha.  My share is $1,967, husband is $1,510.  We are both mid 40's.  I got preferred classification because I have no health issues at all.  Husband is classified as select which we suspect is either due sleep apnea or that Alzheimer's is now in his family history.

I have 30 days to sign the documents and send the payment in.  Part of me says to take the $3,500 and just invest it.  The other part of me realizes that Alzheimer's sucks - physically my mother in law is in great shape - so this can go on for years.  As much as I try to assuage my fears by reminding myself that neither of my mother in laws brothers have the disease, so maybe it's just the females in their family, there is still a little part of me that knows this disease is not only a mind-killer but can also be a money-killer.

A couple of the pros I see as 1)Since we are self-employed the LTC premiums are 100% tax deductible and 2) if we ever need to we can use our HSA's to pay the premiums.

We are going to start looking at how else we should be protecting assets.  It's time for wills, trusts (we don't have kids so this wasn't a priority earlier) .  We put rental properties into LLC, not sure if that makes a difference.

I'd love to hear feedback - should we sign the documents and send in the check?

Thanks in advance.



TheWifeHalf

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Re: Long Term Care Insurance?
« Reply #1 on: May 22, 2018, 01:42:34 PM »
TheHusbandHalf and I had a discussion about this about 10 years ago. We are now 61/59 and decided to self fund. We have no problem spending down the money for such care, because that is what we saved it for.

He has 12 maternal aunts and uncles, no paternal. Of all those, 1 aunt had Alzheimer's. 3 are still living, including the one with Alz

I have 13 paternal aunts and uncles. Of those, 1 paternal aunt and 1 pat. uncle had Alzheimer's. There is 1 still living, about 92, no sign of Alz.
I have 4 maternal, 3 living, and all are as sharp as can be. The one who died did not have Alz.




SimplyFinanciallyFree

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Re: Long Term Care Insurance?
« Reply #2 on: May 22, 2018, 02:07:13 PM »
If you have a family history of Alzheimers then a LTC policy might be a good idea as you can easily blow through assets in the blink of an eye.  If one of you needs care the other spouse could end up impoverished.  MOO has a great plan and I personally really like their shared benefit option.  Some might argue to just invest the premiums but that won't even get you a half of a year of care.  Here is how you could look at it:
  $3500 per year
  40 year time frame
  7% interest
  =$52,400
That is a very small number compared to the $400,000 of benefit you are getting with the policy.
You didn't give the details of the plan design but if the plan still feels pricey you can always reduce the benefit period down to 2 or 3 years.
Another option you could look at is a hybrid life product.  There are a few options but the general idea is you could get some LTC benefits but if these are not used then you have a death benefit.  I recently bought a $100,000 life policy with John Hancock that gives me a $2,000 per month LTC benefit if needed. I know it's not a lot but would help if it is needed.  And if not, I still have a death benefit.  Plus this policy was less expensive than another life policy I just replaced. I also designed it so that I only have to pay premiums for 20 years so it will be paid for fully before age 59.
« Last Edit: May 22, 2018, 02:16:32 PM by SimplyFinanciallyFree »

JimmyFry

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Re: Long Term Care Insurance?
« Reply #3 on: May 22, 2018, 02:48:26 PM »

  $3500 per year
  40 year time frame
  7% interest
  =$52,400

That is a very small number compared to the $400,000 of benefit you are getting with the policy.

A single $3,500 investment will yield $52,400 after 40 years at 7%...  Regular $3,500 annual investments at 7% yield $698,723 after 40 years. 

Perhaps I am misunderstanding your point?

Roadrunner53

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Re: Long Term Care Insurance?
« Reply #4 on: May 22, 2018, 03:12:42 PM »
I have LTC for me and the Hub. My employer from years ago offered it and we bought it. We pay about $2880 a year. We had paid the same amount for many years then last year we had a modest increase. I swear when we bought the policy's they said it would never go up. Well, it did a little. I would have to look at the policy again but I think it only pays for about 6 years. In CT where I am, a nursing home in my town costs $12,000 a month. That is actually 2013 price. The policy I have pays $6,000 a month. I didn't realize this when I bought it. I never knew what nursing homes cost but I believed this policy would pay 100%. It does not.

My two aunts, one in TN and one in KY were both in nursing homes. Both of them only cost $6,000 a month. So, maybe if we moved to one of those states we would get more bang for the buck. The cost of nursing homes is outrageous. My mom was in the one that cost $12,000 a month and it was okay but she was not in a private room and the room was pretty small for two beds and the activity with the aids and nurses. Really not room for one visitor at times.

This is one insurance I hope I never, ever, ever use. I had never been to a nursing home till my Mom was admitted. It was the worst seeing so many sick people. So many people that were child like and carrying baby dolls. UGH, just horrible. I also cannot imagine working in one of those places either. The really sick Alz patients were locked up and you had to have the code to get thru the door. I never went there. But I did hear one shrieking as they returned her to the unit. OMG!

TheWifeHalf

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Re: Long Term Care Insurance?
« Reply #5 on: May 22, 2018, 09:24:13 PM »
My daughter, an RN, worked at a nursing home for a couple of years. She said they used little paper cups, one for each patient, for the meds. They had a patient that loved stealing the little paper cups, she got such joy when she did it. Their response?  They watched her of course, but they let her do it.

That's the kind of place I would like to go to, if I need such a place.

Ottoford

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Re: Long Term Care Insurance?
« Reply #6 on: May 23, 2018, 06:28:03 AM »
Thanks for all the helpful comments...this has taken a negative turn since yesterday.

I called the agent because when I read the documents it did not appear to be a single $400k plan but two separate $200k plans which is something we NEVER discussed - we always wanted a shared plan.  According to the agent he had in his notes that the shared plan cost 17% more so we were going with individual plans.  I confirmed with my husband that I am not crazy and that individual plans were never a consideration for us.  I would only consider an individual plan if there was a life insurance benefit.  We have no kids so I am not concerned about inheritance - I just want peace of mind knowing that which ever partner lives longer doesn't have to worry.

So now I am looking at $4,326 for a shared plan at $450K which he said is the lowest amount MOO will offer for a shared plan.  So I can't reduce cost as $450k is the minimum.  This is for a $6,000 monthly benefit. No life insurance benefit.

I have also called Genworth directly as they are associated with the New York State Partnership plan but that is more expensive.

My agent is going to send some suggestion for hybrid LTC/life policy, but I think they may be pricey.  The one he mentioned (still need to see the details) was a one time premium payment of $100,000 for unlimited LTC (although there must be a monthly cap) with a life insurance amount of 2.3x the initial premium ($230,000).  How do you feel about paying $100,000 for a policy?  I don't feel great about it.

At some point the math stops making sense for LTC when you look at compounding interest calculators.

Prior to the realization of what LTC costs for my mother in law, I was all in favor of self-funding.  It's the potential for a diagnosis such as Alzheimer's that has me nervous.

Right now I am leaning away from going ahead with this.  But I will review the updated paperwork.  It doesn't make me feel great about using an agent that seems to be changing things and is not on the same page as I am.

I think the first thing I need to do is move our HSA's from Key Bank - who have gotten insane with their fees lately - to a Vanguard HSA where I can invest the funds.

I think where my mother in law is now is actually an amazing deal.  We looked at four different memory care facilities (3 in NY and 1 in MA as we are close) and we absolutely loved the place we put her in and we feel it is a great deal at around $7,300 per month.  There are 54 residents in three connect "houses" with a lot of music activities. 

radram

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Re: Long Term Care Insurance?
« Reply #7 on: May 23, 2018, 07:46:15 AM »
Thanks for all the helpful comments...this has taken a negative turn since yesterday.

I called the agent because when I read the documents it did not appear to be a single $400k plan but two separate $200k plans which is something we NEVER discussed - we always wanted a shared plan.  According to the agent he had in his notes that the shared plan cost 17% more so we were going with individual plans.  I confirmed with my husband that I am not crazy and that individual plans were never a consideration for us.  I would only consider an individual plan if there was a life insurance benefit.  We have no kids so I am not concerned about inheritance - I just want peace of mind knowing that which ever partner lives longer doesn't have to worry.

So now I am looking at $4,326 for a shared plan at $450K which he said is the lowest amount MOO will offer for a shared plan.  So I can't reduce cost as $450k is the minimum.  This is for a $6,000 monthly benefit. No life insurance benefit.

I have also called Genworth directly as they are associated with the New York State Partnership plan but that is more expensive.

My agent is going to send some suggestion for hybrid LTC/life policy, but I think they may be pricey.  The one he mentioned (still need to see the details) was a one time premium payment of $100,000 for unlimited LTC (although there must be a monthly cap) with a life insurance amount of 2.3x the initial premium ($230,000).  How do you feel about paying $100,000 for a policy?  I don't feel great about it.

At some point the math stops making sense for LTC when you look at compounding interest calculators.

Prior to the realization of what LTC costs for my mother in law, I was all in favor of self-funding.  It's the potential for a diagnosis such as Alzheimer's that has me nervous.

Right now I am leaning away from going ahead with this.  But I will review the updated paperwork.  It doesn't make me feel great about using an agent that seems to be changing things and is not on the same page as I am.

I think the first thing I need to do is move our HSA's from Key Bank - who have gotten insane with their fees lately - to a Vanguard HSA where I can invest the funds.

I think where my mother in law is now is actually an amazing deal.  We looked at four different memory care facilities (3 in NY and 1 in MA as we are close) and we absolutely loved the place we put her in and we feel it is a great deal at around $7,300 per month.  There are 54 residents in three connect "houses" with a lot of music activities.

This story alone would prohibit me from signing anything with this agent. Fire your agent. Period.

I would prefer the self funded option similar to what Jimmyfry calculated earlier. The numbers you shared just do not sound like the protection you think you are paying for. Who determines how much care you "need". They might only pay for a home health aid a few hours a day, when you actually want around-the-clock care. In that case, you would be paying the difference anyway.

3% inflation protection. Not good enough. Best projections today are 5.5% increases in healthcare spending moving forward. Compare this estimate with the real 7.3% increase from 1990-2007. My opinion is 5.5% is a low projection based on the uncertainty of ACA.

Even the day you buy the plan, it does not even cover the cost for 1, let alone 2 of you. This will only get worse if increased costs exceed 3%.

If your goal is to protect assets, there are often better ways. Do that research first. It might lead you back to LTCI, but it should lead you away.

Ottoford

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Re: Long Term Care Insurance?
« Reply #8 on: May 23, 2018, 08:26:25 AM »
Agreed.  We can do 5% inflation protection, but it raises the cost of the premium even more.

You are absolutely right when you say that I need to explore other options for protecting assets, since that is the ultimate goal.

I am a worst case scenario thinker, so the LTCI was my fall-back to a what if my husband gets an Alzheimer's diagnosis that requires a 10 year stay in a facility. 

I think my next step is a trust and to do more research on asset protection in general.

Thanks!

Roadrunner53

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Re: Long Term Care Insurance?
« Reply #9 on: May 23, 2018, 10:03:42 AM »
Ottoford, I would suggest you pick up the latest edition of: 
How to Protect Your Family's Assets from Devastating Nursing Home Costs-Medicaid Secrets by K. Gabriel Heiser, Attorney

There are strategies on how to protect the spouse that is still in the family home. The key is spending down the money and the author suggest buying a more expensive home, a new car, upgrading the current home with carpeting, new furniture, fix the roof, build a new deck, sidewalks new kitchen cabinets, flooring. He mentions buying property to rent out, prepaid funerals. The book also covers Veterans, annuities and much more.

The book I have is the 2014 edition. I would recommend you buy the most up to date version of this book as laws change. The cost of this book says $47. Not sure where I got it or what I actually paid for it. Maybe your local library will have it.

This looks like the latest version of the book I have: https://www.amazon.com/Protect-Familys-Assets-Devastating-Nursing/dp/1941123074/ref=sr_1_fkmr0_1?ie=UTF8&qid=1527091350&sr=8-1-fkmr0&keywords=How+to+Protect+Your+Family%27s+Assets+from+Devastating+Nursing+Home+Costs%3A+Medi+2018

Ottoford

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Re: Long Term Care Insurance?
« Reply #10 on: May 23, 2018, 10:23:40 AM »
Awesome!  I just requested the book form my local library.  They 2017 edition is available in another library, but they will send it to my local library soon.

Interesting thought about getting a bigger house.  We just down-sized three years ago!!

We have bought one rental and should close on a second this week.  Ugh annuities...I still haven't figured those out.

Looks like some light summer reading is in my future.

I also need to learn more about how my IRA's are protected (or my husbands IRA's) are protected if the other gets sick.  Can they take my IRA savings for my husbands care - I don't think so, but I need to learn for sure.
« Last Edit: May 23, 2018, 10:27:12 AM by Ottoford »

Roadrunner53

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Re: Long Term Care Insurance?
« Reply #11 on: May 23, 2018, 11:09:10 AM »
Ottoford, you will be very pleased with this book. It gives good examples throughout the book.

I think spend down is allowed when sick spouse needs nursing care. The book will tell you all the legit things you can do.

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #12 on: May 23, 2018, 04:00:42 PM »
We just placed my mother in law into a Memory Care Unit (Alzheimer's) at a cost of $7,300 per month.

This makes me nervous, so we applied for LTCI and were approved.  I'm 44, husband is 46.  We have a shared plan for $400,000 coverage (built in inflation increase of 3% annually).  As a shared plan the $400k can be used by one or both of us.

Total annual premium of $3,477 with Mutual of Omaha.  My share is $1,967, husband is $1,510.  We are both mid 40's.  I got preferred classification because I have no health issues at all.  Husband is classified as select which we suspect is either due sleep apnea or that Alzheimer's is now in his family history.

I have 30 days to sign the documents and send the payment in.  Part of me says to take the $3,500 and just invest it.  The other part of me realizes that Alzheimer's sucks - physically my mother in law is in great shape - so this can go on for years.  As much as I try to assuage my fears by reminding myself that neither of my mother in laws brothers have the disease, so maybe it's just the females in their family, there is still a little part of me that knows this disease is not only a mind-killer but can also be a money-killer.

A couple of the pros I see as 1)Since we are self-employed the LTC premiums are 100% tax deductible and 2) if we ever need to we can use our HSA's to pay the premiums.

We are going to start looking at how else we should be protecting assets.  It's time for wills, trusts (we don't have kids so this wasn't a priority earlier) .  We put rental properties into LLC, not sure if that makes a difference.

I'd love to hear feedback - should we sign the documents and send in the check?

Thanks in advance.


This is a typical "cookie cutter" policy design and, in my view, one of the worst ways to design a long-term care policy for a TINK couple in their forties.

At your ages the insurers charge way too much for the inflation benefit. And you don't get any value out of the inflation benefit until 25 to 30 years from now. You're better off dumping the inflation benefit and increasing the benefits because your real risk is if one of you needs care when you're younger, not when you're in your 80's or 90's.

If you live in NY, you should still buy the Mutual of Omaha policy but drop the inflation benefit, increase the monthly benefit to $10K and the shared benefits to $1,000,000. The premium will $2,080 for you and $1,554 for hubbie.

If you live outside of NY, you and hubbie could share $1.5 million in benefits for $6,468 combined premium for 10 years. No premiums are due after 10 years.


Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #13 on: May 23, 2018, 04:03:28 PM »

3% inflation protection. Not good enough. Best projections today are 5.5% increases in healthcare spending moving forward. Compare this estimate with the real 7.3% increase from 1990-2007. My opinion is 5.5% is a low projection based on the uncertainty of ACA.

Even the day you buy the plan, it does not even cover the cost for 1, let alone 2 of you. This will only get worse if increased costs exceed 3%.

If your goal is to protect assets, there are often better ways. Do that research first. It might lead you back to LTCI, but it should lead you away.

Long-term care inflation rate is a lot different than the medical inflation rate.

Long-term care inflation is primarily driven by the cost of labor.

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #14 on: May 23, 2018, 04:17:01 PM »
I'm sorry to hear you had to put your mother in a care facility.

Long-term care insurance is a nice idea in theory.  But I don't think than any of the current plans I've seen live up to the promise and offer a good value for the money.

Honestly, I think you are probably better off taking an extra $3500 per year and investing it.

I think that some of the issue that LTC insurance suffers from are:

1.) LTC insurers are going insolvent -- so premium payments end up being a waste.
2.) Insureds don't end up using the insurance during their end stages -- so premium payments end up being a waste.
3.) The coverage that is provided is not extraordinary -- most plans do not offer a blank check if you need long term care.  The will offer a few thousand a month, usually for up to 5 years. 
4.) There is a significant opportunity cost in that the money that goes towards the premiums could be saved, invested, and eventually used to self-insure against the need for long-term care (e.g. self insurance just means having enough extra money available to pay if its needed).  And, if LTC is not used, the money that would have gone towards premiums could be used for other needs or left as an inheritance.

1.) LTC insurers are going insolvent -- so premium payments end up being a waste.

Fortunately, that's not true. The one insurance company that went belly up (Penn Treaty) didn't sell normal long-term care insurance. They ignored federal guidelines and sold policies that would pay benefits if someone needed help cooking and cleaning. No wonder they went bankrupt. No other insurance company has been dumb enough to sell policies like that.


 
2.) Insureds don't end up using the insurance during their end stages -- so premium payments end up being a waste.

There have been over 1,000,000 long-term care insurance policyholders who have made claims on their policies. Incurred claims are over $100 billion to date. This year, long-term care insurers will incur over $1 Billion in claims every three and a half weeks.

At the end of last year, after spending over $15,000 on medical insurance premiums on my family, I was not disappointed that the premiums "ended up being a waste". "Darn, I wish I'd had major surgery!"



3.) The coverage that is provided is not extraordinary -- most plans do not offer a blank check if you need long term care.  The will offer a few thousand a month, usually for up to 5 years. 

The OP can buy a $10,000 monthly benefit and $1,000,000 of shared benefits for about $150 per month per spouse. That's pretty extraordinary, don't you think?



4.) There is a significant opportunity cost in that the money that goes towards the premiums could be saved, invested, and eventually used to self-insure against the need for long-term care (e.g. self insurance just means having enough extra money available to pay if its needed).  And, if LTC is not used, the money that would have gone towards premiums could be used for other needs or left as an inheritance.

The only problem with self-insuring is not knowing when you'll need care. If you can get a decent policy for less than one-half of one percent of your net worth, it makes sense to do it.

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #15 on: May 23, 2018, 04:20:30 PM »
TheHusbandHalf and I had a discussion about this about 10 years ago. We are now 61/59 and decided to self fund. We have no problem spending down the money for such care, because that is what we saved it for.

He has 12 maternal aunts and uncles, no paternal. Of all those, 1 aunt had Alzheimer's. 3 are still living, including the one with Alz

I have 13 paternal aunts and uncles. Of those, 1 paternal aunt and 1 pat. uncle had Alzheimer's. There is 1 still living, about 92, no sign of Alz.
I have 4 maternal, 3 living, and all are as sharp as can be. The one who died did not have Alz.


How much of your net worth could you comfortably afford to pay for your husband's care before it would start to impact your financial security?

TheWifeHalf

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Re: Long Term Care Insurance?
« Reply #16 on: May 23, 2018, 06:07:03 PM »
55% That would be enough for both of us. I know you didn't ask, but that's over 1,000,000 minus income tax on half of that. I truly don't know if that would affect us financially, there are so many unknowns.

TheHusbandHalf works with a guy who has his father living with him, his mother with his sister. Both have someone giving home care so they are not in a nursing home yet. They are the epitome of farm families.

We've got the house set up so we can live on one floor if needed. We've done all we can to deal with 'what ifs.' I just learned the other day that my aunt and uncle, no alz, signed up to living in an ???. I'm not sure what it is called, but they can live there forever and get whatever level of care they need - he is the uncle that's 92. All they need right now is a place to live and be watched. All they had to do was give this place their home. I suspect more places like this, and other arrangements, will become available as the population ages.

Our whole lives have been dealing with whatever the world throws at us. I honestly think we'll continue living that way.

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #17 on: May 23, 2018, 06:56:31 PM »
55% That would be enough for both of us. I know you didn't ask, but that's over 1,000,000 minus income tax on half of that. I truly don't know if that would affect us financially, there are so many unknowns.


Isn't the point of insurance to help us deal with the unknowns?


TheWifeHalf

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Re: Long Term Care Insurance?
« Reply #18 on: May 23, 2018, 09:27:34 PM »
yes it is
But I don't think every unknown should have insurance to cover it. Each person has to decide for themselves how much risk they are willing to take.

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #19 on: May 23, 2018, 10:04:47 PM »
yes it is
But I don't think every unknown should have insurance to cover it. Each person has to decide for themselves how much risk they are willing to take.


If your portfolio is $1 million, would you alter your investment mix to gain an extra 0.4% (four-tenths of one-percent) each year, if the new investment mix could result in you losing hundreds of thousands of dollars?

If your portfolio is $2 million, would you alter your investment mix to gain an extra 0.2% (two-tenths of one-percent) each year, if the new investment mix could result in you losing hundreds of thousands of dollars?

If your portfolio is $4 million, would you alter your investment mix to gain an extra 0.1% (one-tenth of one-percent) each year, if the new investment mix could result in you losing hundreds of thousands of dollars?

uwp

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Re: Long Term Care Insurance?
« Reply #20 on: May 24, 2018, 03:35:53 PM »

1.) LTC insurers are going insolvent -- so premium payments end up being a waste.

Fortunately, that's not true. The one insurance company that went belly up (Penn Treaty) didn't sell normal long-term care insurance. They ignored federal guidelines and sold policies that would pay benefits if someone needed help cooking and cleaning. No wonder they went bankrupt. No other insurance company has been dumb enough to sell policies like that.


Also, it is my understanding that your state should have an insurance Guaranty Association which covers your benefits if the insurance company does go under.  (Or at least a large portion of the benefits, ie $300k-500k range).

Ottoford

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Re: Long Term Care Insurance?
« Reply #21 on: May 24, 2018, 05:14:06 PM »
We just placed my mother in law into a Memory Care Unit (Alzheimer's) at a cost of $7,300 per month.

This makes me nervous, so we applied for LTCI and were approved.  I'm 44, husband is 46.  We have a shared plan for $400,000 coverage (built in inflation increase of 3% annually).  As a shared plan the $400k can be used by one or both of us.

Total annual premium of $3,477 with Mutual of Omaha.  My share is $1,967, husband is $1,510.  We are both mid 40's.  I got preferred classification because I have no health issues at all.  Husband is classified as select which we suspect is either due sleep apnea or that Alzheimer's is now in his family history.

I have 30 days to sign the documents and send the payment in.  Part of me says to take the $3,500 and just invest it.  The other part of me realizes that Alzheimer's sucks - physically my mother in law is in great shape - so this can go on for years.  As much as I try to assuage my fears by reminding myself that neither of my mother in laws brothers have the disease, so maybe it's just the females in their family, there is still a little part of me that knows this disease is not only a mind-killer but can also be a money-killer.

A couple of the pros I see as 1)Since we are self-employed the LTC premiums are 100% tax deductible and 2) if we ever need to we can use our HSA's to pay the premiums.

We are going to start looking at how else we should be protecting assets.  It's time for wills, trusts (we don't have kids so this wasn't a priority earlier) .  We put rental properties into LLC, not sure if that makes a difference.

I'd love to hear feedback - should we sign the documents and send in the check?

Thanks in advance.


This is a typical "cookie cutter" policy design and, in my view, one of the worst ways to design a long-term care policy for a TINK couple in their forties.

At your ages the insurers charge way too much for the inflation benefit. And you don't get any value out of the inflation benefit until 25 to 30 years from now. You're better off dumping the inflation benefit and increasing the benefits because your real risk is if one of you needs care when you're younger, not when you're in your 80's or 90's.

If you live in NY, you should still buy the Mutual of Omaha policy but drop the inflation benefit, increase the monthly benefit to $10K and the shared benefits to $1,000,000. The premium will $2,080 for you and $1,554 for hubbie.

If you live outside of NY, you and hubbie could share $1.5 million in benefits for $6,468 combined premium for 10 years. No premiums are due after 10 years.

I am absolutely going to do just what you suggest at $10k per month for $1m and see what the agent comes back with.

Nate79

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Re: Long Term Care Insurance?
« Reply #22 on: May 24, 2018, 06:57:09 PM »
Most recommendations I hear from blogs/podcast financial folks is LTC insurance should be bought no earlier than 55. The odds of needing before 55 are almost zero.

And stay away from whole life. Good God the whole life industry is trying to add another level of complexity to their existing pile of crap.

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TheWifeHalf

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Re: Long Term Care Insurance?
« Reply #23 on: May 24, 2018, 08:33:01 PM »
yes it is
But I don't think every unknown should have insurance to cover it. Each person has to decide for themselves how much risk they are willing to take.


If your portfolio is $1 million, would you alter your investment mix to gain an extra 0.4% (four-tenths of one-percent) each year, if the new investment mix could result in you losing hundreds of thousands of dollars?

If your portfolio is $2 million, would you alter your investment mix to gain an extra 0.2% (two-tenths of one-percent) each year, if the new investment mix could result in you losing hundreds of thousands of dollars?

If your portfolio is $4 million, would you alter your investment mix to gain an extra 0.1% (one-tenth of one-percent) each year, if the new investment mix could result in you losing hundreds of thousands of dollars?

That's not what we're mainly concerned about. I here of a lot of insurers going out of business. My luck it would happen 2 months before I went in a nursing home.  That's the risk, will the company be around when it's needed?
This is a newer product being sold, we are not convinced it's worth it. 

TheWifeHalf

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Re: Long Term Care Insurance?
« Reply #24 on: May 24, 2018, 08:37:58 PM »
This last post made me think of something:
We have life insurance and will use that to cover any LTC costs. The way we see it, better to have a sure thing, than an insurance that only covers one situation. We have enough to cover the ltc costs, then will get reimbursed upon death. It life insurance gets too expensive? That's what we saved the money for - to be used!

Ottoford

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Re: Long Term Care Insurance?
« Reply #25 on: May 25, 2018, 06:42:50 AM »
With regard to the age I was under the assumption that younger was better. According to the agent 50% of people are denied because they wait until they are in their 50’s and something goes wrong.

I was hoping our age would help offset the cost.

For some reason I was ok with $3,500 per year if it was a shared policy. Once it gets around $4,500 it seems unreasonable. Not sure what my mental block is on that. Part of it may be the hesitation of actually spending what we’ve saved. But that is why it’s there. My idea has been to not touch $$ for as long as possible. Use our rental income. Get a winter gig at the ski area and then ski for free.  At least until we can start drawing in IRA’s and the pension starts for husband at 62.  Right now about 50% of our $ is untouchable until 59 1/2. That 13 years off for him, 15 years for me. We are still working and are extremely lucky to work from home and not have bosses. But even that will come to an end. I’m hoping by the time I’m 50 if not sooner.

RelaxedGal

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Re: Long Term Care Insurance?
« Reply #26 on: May 25, 2018, 09:13:18 AM »
I second the recommendation to wait.  Our Financial advisor said "Come back to me when you turn 50 and we'll talk about it."  I'm reading The New Rules of Retirement by Robert C. Carlson and he recommends LTCI but again, not too early and not too late means in your 50's.  As for stats the first google result I clicked through says
Quote
According to the AALTCI site, 23% of long-term care insurance applicants in their 60s were declined in 2010 (its most recent data); 14% in their 50s were. The AALTCI says the best age to apply for long-term care insurance and “health-qualify” is in your mid-50s.

BeanCounter

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Re: Long Term Care Insurance?
« Reply #27 on: May 25, 2018, 10:18:27 AM »
I just went through this with my mom. She paid into a very cushy LTC policy for years. Never got to use it. She got cancer and by the time she was sick enough to be eligible for help, we would have had to pay for the 14 day "waiting period" before the insurance kicked in. She was dead by the time it kicked in. She had spent $35k in premiums for the policy. I think these policies only make sense if you are eligible and need to go to assisted living for a long period of time. And when you look at the statistics, that's actually a small percentage of people. Only 40% of people will ever need to be in a nursing home, and 68% of them will die within a year of admission.
http://www.morningstar.com/articles/564139/40-mustknow-statistics-about-longterm-care.html
 If you just need help around the house, mathematically it makes more sense to just pay for it yourself at $15 an hour.
I think DH and I are going to plan on keeping additional term to help refund the remaining spouse (or our estate) if one of us should need extended care. Otherwise we'll self fund.

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #28 on: May 25, 2018, 12:23:45 PM »


That's not what we're mainly concerned about. I here of a lot of insurers going out of business. My luck it would happen 2 months before I went in a nursing home.  That's the risk, will the company be around when it's needed?
This is a newer product being sold, we are not convinced it's worth it.
[/quote]


Last year over 100 insurance companies paid long-term care insurance claims.
Last year about 14 different insurance companies sold new long-term care policies.

There's a difference between "going out of business" and "no longer selling new policies".

If a company stops selling new policies, they still have to pay all claims for the policies they've sold.

Is long-term care insurance "a newer product" that "may not be worth it"? Ask the 1,000,000+ families who have incurred over $100 Billion of long-term care insurance claims over the past 40 years.

Ask my MIL... her policy is covering 100% of the cost of her assisted living facility.


Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #29 on: May 25, 2018, 12:29:16 PM »
Most recommendations I hear from blogs/podcast financial folks is LTC insurance should be bought no earlier than 55. The odds of needing before 55 are almost zero.

And stay away from whole life. Good God the whole life industry is trying to add another level of complexity to their existing pile of crap.

Sent from my SM-G950U using Tapatalk


The best time to buy long-term care insurance is when you have enough assets that you could lose to justify the cost of the policy.

There are  people in their sixties who should NOT own long-term care insurance because they don’t have enough income or assets to protect. They can easily qualify for Medicaid. There are some people in their forties who SHOULD own long-term care insurance because they have enough assets to protect.


Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #30 on: May 25, 2018, 12:31:46 PM »
This last post made me think of something:
We have life insurance and will use that to cover any LTC costs. The way we see it, better to have a sure thing, than an insurance that only covers one situation. We have enough to cover the ltc costs, then will get reimbursed upon death. It life insurance gets too expensive? That's what we saved the money for - to be used!

Life insurance is not a sure thing.
Most life insurance policies lapse before the insured dies.
The only way to guarantee a death benefit is if your life insurance is "Guaranteed Universal Life" or "Whole Life" and you pay the required premium every year for life.

A life insurance policy like that costs about 4x more than a  long-term care insurance policy.

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #31 on: May 25, 2018, 12:35:54 PM »
With regard to the age I was under the assumption that younger was better. According to the agent 50% of people are denied because they wait until they are in their 50’s and something goes wrong.

I was hoping our age would help offset the cost.

For some reason I was ok with $3,500 per year if it was a shared policy. Once it gets around $4,500 it seems unreasonable. Not sure what my mental block is on that. Part of it may be the hesitation of actually spending what we’ve saved. But that is why it’s there. My idea has been to not touch $$ for as long as possible. Use our rental income. Get a winter gig at the ski area and then ski for free.  At least until we can start drawing in IRA’s and the pension starts for husband at 62.  Right now about 50% of our $ is untouchable until 59 1/2. That 13 years off for him, 15 years for me. We are still working and are extremely lucky to work from home and not have bosses. But even that will come to an end. I’m hoping by the time I’m 50 if not sooner.


With the way the agent designed that policy for you, it's NOT cheaper to buy it younger.
The way that I would design it for you IS a lot cheaper the younger you are.

That's why I told you to dump the inflation benefit and just buy $10K monthly benefit each and $1,000,000 of shared benefits.
You'll have a million dollars of long-term care insurance for about $3,500 a year. It's really a bargain.

The risk of waiting is not so much the risk of being denied but the risk of paying a higher premium because of not being able to qualify for preferred rates.

The best time to buy long-term care insurance is when you have enough assets that you could lose to justify the cost of the policy. You do!

There are some people in their sixties who should NOT own long-term care insurance because they don’t have enough income or assets to protect. They can easily qualify for Medicaid. There are some people in their forties who SHOULD own long-term care insurance because they have enough assets to protect.

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #32 on: May 25, 2018, 12:41:42 PM »
And when you look at the statistics, that's actually a small percentage of people. Only 40% of people will ever need to be in a nursing home, and 68% of them will die within a year of admission.
http://www.morningstar.com/articles/564139/40-mustknow-statistics-about-longterm-care.html
 If you just need help around the house, mathematically it makes more sense to just pay for it yourself at $15 an hour.
I think DH and I are going to plan on keeping additional term to help refund the remaining spouse (or our estate) if one of us should need extended care. Otherwise we'll self fund.


Since 87% of the people who need long-term care never go to nursing homes, that statistic isn't very helpful.

Additionally, "long-term care" doesn't mean needing "help around the house".
Long-term care means help with bathing, dressing, toileting, etc...

But there's no point in owning an insurance policy for something that will never happen to you, right?



Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #33 on: May 25, 2018, 12:44:54 PM »
With regard to the age I was under the assumption that younger was better. According to the agent 50% of people are denied because they wait until they are in their 50’s and something goes wrong.

I was hoping our age would help offset the cost.

For some reason I was ok with $3,500 per year if it was a shared policy. Once it gets around $4,500 it seems unreasonable. Not sure what my mental block is on that. Part of it may be the hesitation of actually spending what we’ve saved. But that is why it’s there. My idea has been to not touch $$ for as long as possible. Use our rental income. Get a winter gig at the ski area and then ski for free.  At least until we can start drawing in IRA’s and the pension starts for husband at 62.  Right now about 50% of our $ is untouchable until 59 1/2. That 13 years off for him, 15 years for me. We are still working and are extremely lucky to work from home and not have bosses. But even that will come to an end. I’m hoping by the time I’m 50 if not sooner.

I find it worrying that you are getting sucked into the urgency of this.  "50% of people over 50 are denied"  Come on. That sounds like baloney to me -- to many round numbers.  Or its being qualified by the "something already went wrong" clause.  Well, no shit.  If someone waits until they need the benefit to sign up for insurance they will be denied.  But, I don't think it carries that 50% of all people in their 50s are denied.  I think you have some time to mull things over.

I think you would benefit from tabling this decision for at least 6-months and approaching it after you have had a chance to let it all sink in.  You appear to be making it immediately after dealing with placing your mother into a home.  I think you are letting your emotions influence your judgement to an unreasonable degree.  If after 6-months or a year you still believe you need this type of coverage, perhaps shop around a little and don't work with just one guy.  Especially, since this guy seems to be being dishonest by not listening to you, gas-lighting you about prior conversations, and providing you paperwork to sign that doesn't reflect the coverage you were looking for and discussed.


She can cancel the policy at anytime and get a pro-rated refund of her annual premium.

She can wait 6 months, like you suggest, and then pay higher premiums because she and hubbie are older and maybe even higher premiums because she has a health change and loses the preferred health discount.


Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #34 on: May 25, 2018, 12:46:16 PM »
I second the recommendation to wait.  Our Financial advisor said "Come back to me when you turn 50 and we'll talk about it."  I'm reading The New Rules of Retirement by Robert C. Carlson and he recommends LTCI but again, not too early and not too late means in your 50's.  As for stats the first google result I clicked through says
Quote
According to the AALTCI site, 23% of long-term care insurance applicants in their 60s were declined in 2010 (its most recent data); 14% in their 50s were. The AALTCI says the best age to apply for long-term care insurance and “health-qualify” is in your mid-50s.


Probably the worst place to buy long-term care insurance (of any kind) is from an investment advisor.


Ottoford

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Re: Long Term Care Insurance?
« Reply #35 on: May 25, 2018, 01:20:35 PM »
I will definitely follow up on the $10k monthly at $1M. The Holiday weekend makes it tough to get in touch with people especially when I spent my morning riding my motorcycle to visit my mother in law at the memory care facility. 😊. I need to practice for early retirement!  Today’s sing-a-long and chair yoga with 20 Alzheimer’s patients was a blast.  We try to show up at unexpected days/times, it’s our way of seeing that the staff is getting her involved and they have all been amazing.

I do think there is merit to the folks who are telling me I am rushing...I do that.  I get an idea in my head and run with it.  As the family member who tracks my mother in laws finances I always think worst case scenario. 

I picked up the “How to protect your family’s assets from devastating nursing home costs” from the library today. Good holiday weekend reading.

TheWifeHalf

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Re: Long Term Care Insurance?
« Reply #36 on: May 25, 2018, 04:17:14 PM »


That's not what we're mainly concerned about. I here of a lot of insurers going out of business. My luck it would happen 2 months before I went in a nursing home.  That's the risk, will the company be around when it's needed?
This is a newer product being sold, we are not convinced it's worth it.


Last year over 100 insurance companies paid long-term care insurance claims.
Last year about 14 different insurance companies sold new long-term care policies.

There's a difference between "going out of business" and "no longer selling new policies".

If a company stops selling new policies, they still have to pay all claims for the policies they've sold.

Is long-term care insurance "a newer product" that "may not be worth it"? Ask the 1,000,000+ families who have incurred over $100 Billion of long-term care insurance claims over the past 40 years.

Ask my MIL... her policy is covering 100% of the cost of her assisted living facility.
[/quote]

Thank you for the information

TheWifeHalf

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Re: Long Term Care Insurance?
« Reply #37 on: May 25, 2018, 04:17:39 PM »
This last post made me think of something:
We have life insurance and will use that to cover any LTC costs. The way we see it, better to have a sure thing, than an insurance that only covers one situation. We have enough to cover the ltc costs, then will get reimbursed upon death. It life insurance gets too expensive? That's what we saved the money for - to be used!

Life insurance is not a sure thing.
Most life insurance policies lapse before the insured dies.
The only way to guarantee a death benefit is if your life insurance is "Guaranteed Universal Life" or "Whole Life" and you pay the required premium every year for life.

A life insurance p

Thank you for the information

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #38 on: May 25, 2018, 06:29:44 PM »
I will definitely follow up on the $10k monthly at $1M. The Holiday weekend makes it tough to get in touch with people especially when I spent my morning riding my motorcycle to visit my mother in law at the memory care facility. 😊. I need to practice for early retirement!  Today’s sing-a-long and chair yoga with 20 Alzheimer’s patients was a blast.  We try to show up at unexpected days/times, it’s our way of seeing that the staff is getting her involved and they have all been amazing.

I do think there is merit to the folks who are telling me I am rushing...I do that.  I get an idea in my head and run with it.  As the family member who tracks my mother in laws finances I always think worst case scenario. 

I picked up the “How to protect your family’s assets from devastating nursing home costs” from the library today. Good holiday weekend reading.


From the time you receive your policies New York state law gives you 30 days to review your policies. During that "30 day free look" you can increase or decrease your benefits. To change your benefits your agent can complete the "Benefit Change Request" form. You'll have to sign it.

Ottoford

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Re: Long Term Care Insurance?
« Reply #39 on: May 25, 2018, 07:19:01 PM »
I will definitely follow up on the $10k monthly at $1M. The Holiday weekend makes it tough to get in touch with people especially when I spent my morning riding my motorcycle to visit my mother in law at the memory care facility. 😊. I need to practice for early retirement!  Today’s sing-a-long and chair yoga with 20 Alzheimer’s patients was a blast.  We try to show up at unexpected days/times, it’s our way of seeing that the staff is getting her involved and they have all been amazing.

I do think there is merit to the folks who are telling me I am rushing...I do that.  I get an idea in my head and run with it.  As the family member who tracks my mother in laws finances I always think worst case scenario. 

I picked up the “How to protect your family’s assets from devastating nursing home costs” from the library today. Good holiday weekend reading.

From the time you receive your policies New York state law gives you 30 days to review your policies. During that "30 day free look" you can increase or decrease your benefits. To change your benefits your agent can complete the "Benefit Change Request" form. You'll have to sign it.

Yes, we are in that window now since he sent us the first (wrong) policy.

radram

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Re: Long Term Care Insurance?
« Reply #40 on: May 27, 2018, 08:23:46 AM »
I will definitely follow up on the $10k monthly at $1M. The Holiday weekend makes it tough to get in touch with people especially when I spent my morning riding my motorcycle to visit my mother in law at the memory care facility. 😊. I need to practice for early retirement!  Today’s sing-a-long and chair yoga with 20 Alzheimer’s patients was a blast.  We try to show up at unexpected days/times, it’s our way of seeing that the staff is getting her involved and they have all been amazing.

I do think there is merit to the folks who are telling me I am rushing...I do that.  I get an idea in my head and run with it.  As the family member who tracks my mother in laws finances I always think worst case scenario. 

I picked up the “How to protect your family’s assets from devastating nursing home costs” from the library today. Good holiday weekend reading.

From the time you receive your policies New York state law gives you 30 days to review your policies. During that "30 day free look" you can increase or decrease your benefits. To change your benefits your agent can complete the "Benefit Change Request" form. You'll have to sign it.

Yes, we are in that window now since he sent us the first (wrong) policy.

It sounds like 2 things are being discussed here.

Bucs, you mean you have 30 days to review a SIGNED, enforced policy and still make changes, right?

Otto, your agent gave you quotes that you DID NOT SIGN, and therefore you can modify the terms forever until you sign, yet the agent told you the quotes were good for 30 days.

That 30 day clock bucs was talking about starts AFTER signing.

Am I correct here?

Ottoford

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Re: Long Term Care Insurance?
« Reply #41 on: May 27, 2018, 03:51:21 PM »
I will definitely follow up on the $10k monthly at $1M. The Holiday weekend makes it tough to get in touch with people especially when I spent my morning riding my motorcycle to visit my mother in law at the memory care facility. 😊. I need to practice for early retirement!  Today’s sing-a-long and chair yoga with 20 Alzheimer’s patients was a blast.  We try to show up at unexpected days/times, it’s our way of seeing that the staff is getting her involved and they have all been amazing.

I do think there is merit to the folks who are telling me I am rushing...I do that.  I get an idea in my head and run with it.  As the family member who tracks my mother in laws finances I always think worst case scenario. 

I picked up the “How to protect your family’s assets from devastating nursing home costs” from the library today. Good holiday weekend reading.

From the time you receive your policies New York state law gives you 30 days to review your policies. During that "30 day free look" you can increase or decrease your benefits. To change your benefits your agent can complete the "Benefit Change Request" form. You'll have to sign it.

Yes, we are in that window now since he sent us the first (wrong) policy.

It sounds like 2 things are being discussed here.

Bucs, you mean you have 30 days to review a SIGNED, enforced policy and still make changes, right?

Otto, your agent gave you quotes that you DID NOT SIGN, and therefore you can modify the terms forever until you sign, yet the agent told you the quotes were good for 30 days.

That 30 day clock bucs was talking about starts AFTER signing.

Am I correct here?

We have not signed anything. It states we have a 30 day right to review from the date of delivery. But it states that even if you pay you have 30 days. We have not signed or paid anything.

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #42 on: May 28, 2018, 03:42:18 PM »
Ottoford is correct.

Ottoford

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Re: Long Term Care Insurance?
« Reply #43 on: June 01, 2018, 12:55:09 PM »
With the way the agent designed that policy for you, it's NOT cheaper to buy it younger.
The way that I would design it for you IS a lot cheaper the younger you are.

That's why I told you to dump the inflation benefit and just buy $10K monthly benefit each and $1,000,000 of shared benefits.
You'll have a million dollars of long-term care insurance for about $3,500 a year. It's really a bargain.

The risk of waiting is not so much the risk of being denied but the risk of paying a higher premium because of not being able to qualify for preferred rates.

The best time to buy long-term care insurance is when you have enough assets that you could lose to justify the cost of the policy. You do!

There are some people in their sixties who should NOT own long-term care insurance because they don’t have enough income or assets to protect. They can easily qualify for Medicaid. There are some people in their forties who SHOULD own long-term care insurance because they have enough assets to protect.

You are right on.  I got the agent on the phone and he plugged in different scenarios for us to compare.  The $10k monthly benefit at $1M without inflation guarantee is $3,634.  Agent is still trying to get my husband approved for preferred rate.

His main concern with removing any sort of inflation guarantee is that Mutual of Omaha will never provide the option to add it in.  If I add at least a 1% inflation guarantee to start, each year when I pay my premium they will offer an inflation guarantee buy up.  He feels like if I do the, $1M/$10k per month plan I am front-loading the potential benefit into a time when we are unlikely to need it given our current ages (44, 46).

He recommended a revised scenario of a $600K plan ($7,500 per month max) with 1% inflation guarantee.  Total annual cost $3,870.  It is close to the same cost of the $1M/$10K but has a little inflation built in.  This at least gives us the option to increase the inflation guarantee down the road.  He called it "Lifetime with Buy Up".  The $450k plans at 1% is $2,980.  The $450k plans at 2% is $3,591.

When I do the math the $450K at 2% in 30 years the value is about the same as the $600k at 1% (~$800K) and the $450K at 2% plan is $279 cheaper per year.

So now I am leaning towards the $450K shared at 2% inflation guarantee for $3,591 annually with option for lifetime buy up.

Is this a mistake?
Thanks in advance.

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #44 on: June 01, 2018, 01:47:08 PM »
I'd do the $10K/$1M.
Yes, it is front-loading it, but so what.
The greater risk is if one of you needs long-term care in the first 20 years of retirement NOT the last 20 years of retirement.
Make sense?

Ottoford

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Re: Long Term Care Insurance?
« Reply #45 on: June 01, 2018, 07:14:53 PM »
I'd do the $10K/$1M.
Yes, it is front-loading it, but so what.
The greater risk is if one of you needs long-term care in the first 20 years of retirement NOT the last 20 years of retirement.
Make sense?

Excellent point. Thanks.

Bucs4Ever

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Re: Long Term Care Insurance?
« Reply #46 on: September 11, 2018, 01:07:27 PM »
If for some reason Mut of Om won't allow you to start off with $10,000 of monthly benefit there are other companies that will. email me at LTCWow at gmail dot com and I'll help.

marion10

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Re: Long Term Care Insurance?
« Reply #47 on: September 11, 2018, 01:50:16 PM »
I got my insurance back when I was 42 in a group policy- there have been some price increases- but I have $211,000 of coverage - three year  benefit period, 90 day waiting period - $59 a month. 3% inflation rider. I'm 58 now- best case scenario is I never have to use it.  If I am in a facility for longer, then I trust Medicaid will kick in.

seattlecyclone

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Re: Long Term Care Insurance?
« Reply #48 on: September 11, 2018, 02:10:47 PM »
I'm personally not too concerned about the first couple years in a long-term care facility; that's easy enough to save up for, and covers the full need for most folks anyway. This policy we're discussing that covers the first $400k of care is pretty much the opposite of what I might be interested in purchasing at some point. I'd rather have a policy with a $400k lifetime deductible and no limits after that. Does such a thing exist? If so, how do the premiums compare to this policy that only covers the first $400k?