Long Term Care Insurance...do you have it.

[NotUrsula]

Yes. I do; the premium is huge, but I believe that it's worth it, because it will allow us to afford several years of in-home care.

My mother spent the final 10 years of her life in a nursing home, due to rheumatoid arthritis. She would have been fine with in-home help for most of that time, but because she became indigent quickly due to the out-of-pocket cost, the only thing available to her at that point was a full-service nursing home.

 

[tvguy]

I think the recommendation is to buy it around age 60
It is cheaper if you buy it earlier, but then you are paying for it for many more years before you need it (statistically)
From Dave Ramsey:
An estimated LTC premium for a healthy 50-year-old man is $1,725 per year. If the policy remains in effect until this person is 95, he can spend approximately $77,625 in LTC premiums. For a healthy 60-year-old man, an estimated premium is $2,170. If he keeps the policy until he’s 95, it can cost him $75,320 overall.(7)

You can already see how buying at age 60 is a slightly better deal. But what would happen if, instead of buying LTC at age 50, you invest that $1,725 each year until age 60? You could have over $30,000! If you keep that money invested until age 95 and never add anything to it, you could potentially have over $850,000! That’s not too shabby!

Many people worry that if they wait until age 60 to buy LTC, they will develop a medical condition that will either prevent them from qualifying for coverage or significantly raise their premiums. If you have a family history of illness at a young age, or you are losing sleep because you’re worried about getting sick and not being able to afford care, then buy LTC when you can afford it. The peace of mind is worth more than any cash you’ll save on premiums.

Just don’t buy LTC at a young age because you think you’ll save money by doing it. As you can see above, that’s just not true.

Well, I am saving $10,000 a year because I bought it younger. And if Dave Ramsey can find me a LTC policy for only $1,725, and want to see it!

 

[gwynne]

Well, I am saving $10,000 a year because I bought it younger. And if Dave Ramsey can find me a LTC policy for only $1,725, and want to see it!

I think if Mr Ramsey was really looking out for his followers, he'd be carefully explaining about this:

The importance of insurer reserve adequacy and solvency as it relates to LTC policies.
Cost, while important, should not be only big concern.

 

[Dan Murphy]

But what would happen if, instead of buying LTC at age 50, you invest that $1,725 each year until age 60? You could have over $30,000! If you keep that money invested until age 95 and never add anything to it, you could potentially have over $850,000! That’s not too shabby!

Almost 12% for 10 years, and over 10% for the next 35 years?

(not to be taken as financial advice)

 

[tvguy]

I think if Mr Ramsey was really looking out for his followers, he'd be carefully explaining about this:

The importance of insurer reserve adequacy and solvency as it relates to LTC policies.
Cost, while important, should not be only big concern.

Correct. A+ rated would be preferred. But the prices all seem to be about the same.

 

[HeatherC]

There is quantity of life and quality of life.

I exercise and eat reasonably healthy so I can have both quantity and quality of life.

In a LTC situation, I would not have quality of life. Those caring for me would not have quality of life. Caring for someone in a LTC situation is an emotional roller coaster that greatly impacts the care givers life and health. In that situation I would prefer the option to end things on my own terms in a humane way.

This is not necessarily true. My mom has a wonderful quality of life. In fact, because they had the foresight to purchase this insurance, her care is probably better than it would have been otherwise.

 

[HeatherC]

Buy it now. The longer you wait, the more expensive it gets. We bought our policies when we were 50. $4,500 total for DW and I. We are both 62 now, for fun got a new quote, $14,000 for both of us!

I would love too, but college payments for our youngest is taking priority now. Just made the final payment for spring semester so only three more years to go!

 

[HeatherC]

We got it in our 40s. The cost has gone up two or three times and we had the option to add more coverage twice. (I missed it the first time but took it the second.) The thing I like about our policy is that we will get some of the costs of the premiums back if we don't use them. We got it after watching what happened when my aunt got Alzheimers and was able to get four years worth of Assisted Living, then skilled care, out of her LTC policy without much of a care (which turned out to be exactly the right amount of time before she passed). I believe it has become quite costly and hard to get now, unfortunately. Definitely shop around, though.

Do you mind me asking which company you purchased it through? How many years care did you get? Did you do a 90 period for insurance to kick In? Any other advice?

Thanks!

 

[tvguy]

I would love too, but college payments for our youngest is taking priority now. Just made the final payment for spring semester so only three more years to go!

Yup. Paid off my son's loans 7 years ago. DD went to a public university, we actually were able to pay her tuition out our paycheck every month

 

[HeatherC]

Yup. Paid off my son's loans 7 years ago. DD went to a public university, we actually were able to pay her tuition out our paycheck every month.

Trying to get last one through with very little loans. Oldest commuted so we paid out of pocket. She didn’t have any loans. She is now starting a graduate program next month.. also out of pocket. Middle kid was not interested in college in any way shape or form and is working full time. Now we are getting the last one through with as few loans as possible and using the rest of the 529 and out of pocket. Figure no or very small loans is the best gift we can give them to start their adult lives.

So LTC is in our minds but can’t pull the trigger yet.

 

[LovesTimone]

This is an tough subject for most people... and one that DH and I have started talking about...

I worked in LTC , Assisted living, memory care, and a LTC with a hospice unit.... for around 10 years, and honestly I have seen so much... having spent lots of time talking with Residents, and family members... Everyone is different, Most of them said they wished that they would have done what they wanted to do, many with cancer or other terminal issues... wish they would have not sought treatment, and not listened to their family... that the treatment was so bad, and robbed them of the time they had when they could have created memories, and most did not want to be a burden, or see themselves in this condition... the disease taking their dignity, and sense of self and independence... I have seen others who fight the hard fight, as they feel they still have more to do...

One lady that came into the hospice unit... Martha... may she rest in peace... said to me one day... and I will never forget it.... I have lived my life as I wanted to.... Love who I wanted to , Spent time with who I wanted to, Traveled the world as I wanted to... I will choose how to end this wonderful life that I have lived...with no regrets... this still make me tear up when I think of her...

With decision such as this, you have to have conversations, with your spouse, partner, children so that everyone is clear on your wishes... and you have to make them known with a living will, DNR, medical POA...

If you feel your loved ones will not be able to follow your wishes appoint someone who will, a guardian, or a estate lawyer, another family member... My friend had to do this... because she knew her kids would not be able to let her go, and follow her wishes... so she let her brother be her guardian the last 4 weeks of her life... he followed her wishes to the letter...

 

[kirstenb1]

My mother in law is in hospice with Alzheimer's. She has been in memory care assisted living for nearly 4 yrs. My FIL cared for her in the home for many years. I am convinced the strain of that caused his demise. We moved her up here to a facility. Even in a facility, the stress has taken its toll on dh and I. After living through this, if I develop Alzheimer's, I will not put my family through this. And I am religious. Unless you have been through this, it is really hard to imagine.

 

[Pea-n-Me]

Do you mind me asking which company you purchased it through? How many years care did you get? Did you do a 90 period for insurance to kick In? Any other advice?

Thanks!

I thought you might ask, so I already took the liberty of looking it up and the company we used doesn't offer new LTCi policies anymore.

I might start with AAA since they have buying power and are usually able to get decent deals for their subscribers in various types of services.

I also understand the issue with the college payments (with two seniors now!) but remember the old adage that "students can take out loans for college, but you can't for your retirement" as, if you really want to get this as part of your financial planning, it's important you get it soon (IMO), while you can. After I had cancer (out of the blue) I was told by my insurance company that I was uninsurable for seven years. Fortunately we had plenty of other insurances already (but not LTCi) and we just kept them going. But when this opportunity came up, with no medical checks for the first 30 days of the offer or something like that, for both DH and I, I jumped on it. It is pricey and sometimes I think of what else we could be doing with that money. But, as with other things like this, it does help me sleep at night. We didn't pick the "gold" package nor the most basic. IIR we got the middle of the road one. I believe there is a waiting period that kicks in, maybe 30 or 60 days? That helped keep premiums at what I thought were reasonable.

In light of Dave Ramsey's thoughts, here's what AAA says about when to buy:

"What is the right age to purchase long-term care insurance?

While there’s no hard and fast rule as to what the “right age” is to purchase long-term care insurance, you should consider that a long-term care need can arise at any age. Long-term care insurance is medically underwritten, meaning you need to health-qualify to be issued a policy. The sooner you apply for coverage, the chance of pre-existing health issues developing or worsening is reduced, and age based premiums are the lowest they will be.

What determines the cost of LTCi?

The benefits you choose, your age, and health at time of purchase all impact the cost of long-term care insurance. For example, the more benefits you select, the more expensive your premium will be. The younger you are when you purchase, and the better your health, the lower your premium will be. The price to purchase LTCi does increase with age, and these increases can be substantial. However, once you purchase a policy, the rate is intended to remain level – meaning you lock in your premium rate at the age for which you applied for the policy. Your rate cannot be increased based on your age or health. Most policies also offer a discount if you are married or if you are applying for coverage as part of an employer group or association."

Good luck, Heather!

 

[HeatherC]

Thanks Pea! I totally agree with everything you said! We are doing pretty good with retirement stuff and this is just another piece of it. After dealing with my parents having to access it and finding the right situation for my mom for us it is absolutely worth it.

So glad you are healthy now and were able to take advantage of this! Here’s to many more years of healthy, happy living for all of us!

 

[Feralpeg]

I bought a plan when I retired. I was 52. My premium was $54 a month. Last year, I cancelled the policy. Every year, the premium went up. It was up to almost $300 a month. I'm now 67. Fortunately, the type of plan I had allowed me to accumulate money that I can use when needed, so it wasn't a loss. It just became to expensive to continue. My plan would have paid a certain amount per day for a period of time.

 

[antmaril]

I have LTC insurance. It was offered through the company I worked for and I signed up when I was 40. I am now 68. I pay about $600 A YEAR for it because I bought it so many years ago. My advice, start as young as possible.

 

[whatname]

DH and I bought LTC insurance through his work in our 30s. Premiums never increase but we get a cost of living increase in benefits regularly. The premiums are less than $1000 per year each. The peace of mind is worth having it.

 

[snappy]

I purchased mine around age 60. I was able to obtain a policy through the AICPA with Prudential, and receive an credit on the premiums through the AICPA. I bought a policy with the annual inflation adjustment. The daily benefit as of 2.1.20 is up to $336 per day with a lifetime benefit of $613,000, and a benefit duration of 5 years. The policy I chose pays the same benefit whether you are in a facility or being cared for at home, once you need assistance with 2 of the 5 activities of daily living. It is probably more than I will need but I feel at ease having coverage. When researching LTC I was told by someone I have known since the 1970’s who has owned a company managing benefit plans for organizations that statistically women linger longer needing LTC than men. My husband also applied but did not pass underwriting due to history of health issues.