Long Term Care Insurance Recommendations?

[k0ua]

Another thing to look carefully at is whether the payments are indexed for inflation. If you buy a policy today that pays $80 per day and need it 25 years from now, how much will that be worth?

Many policies will have a 5 percent per year rider to allow for inflation. Also keep in mind if you want to be able to afford the premiums you need to be thinking about getting a policy before you are age 45 not when you are 65.. Sure you may be able to qualify for a policy when you are 65 if you are in good health, but you may not be able to afford it. Just like whole life insurance, it is cheap per month to take out a policy when you are young and healthy, and expensive when you are old and sicker.

Of course, try telling a young healthy person they need life insurance.. Of course try telling a young person anything.

 

[Travelover]

I also sell cancer policies, and since 1 in 2 of us males and 1 in 3 of females are going to get cancer, No if's, and's or but's, I suggest those of you who do not have a policy take one out, while you don't have cancer. ........

Sorry, but this is really bad advice. Disease specific insurance is mostly a scam. Yes, get good general health insurance that covers everything including cancer and life insurance if you need it, but stay away from cancer insurance, heart attack insurance, toe fungus insurance, etc.

 

[Country Geek]

My wife and I bought long term care policies about 15 years ago, when we were in our 30s. We never had children so we figured we would need to pay people to take care of us when we are old. The policies were and still are pretty affordable, but we were younger when we bought them. Like k0ua says, it's the kind of policy you have to buy well before you need it, though we have been paying the premium for years and will be for years to come. I try to pay a whole year's worth of premiums when I get my tax refund, so it's out of my mind for the year.

 

[Parkanzky]

My wife and I bought long term care policies about 15 years ago, when we were in our 30s. We never had children so we figured we would need to pay people to take care of us when we are old. The policies were and still are pretty affordable, but we were younger when we bought them. Like k0ua says, it's the kind of policy you have to buy well before you need it, though we have been paying the premium for years and will be for years to come. I try to pay a whole year's worth of premiums when I get my tax refund, so it's out of my mind for the year.

We're in our (late) 30's now and that's why I'm asking all these questions. If the care might cost us less than or equal to $10k/mo per person in today's dollars, I think that we will probably "self-insure." Out of curiosity, about what does a good policy cost for a married couple in good health?

 

[Country Geek]

We're in our (late) 30's now and that's why I'm asking all these questions. If the care might cost us less than or equal to $10k/mo per person in today's dollars, I think that we will probably "self-insure." Out of curiosity, about what does a good policy cost for a married couple in good health?

Ours has gone up over the years due to coverage increases (inflation riders) but it's about $200/mo for the two of us now (our average age is early 50s now).

The reason I would be careful of self-insuring is if one of you needs care before the other, you don't want to have to impoverish the healthy spouse to get long-term care for the sick one. You should also see an elder care attorney about setting up your affairs so that one of you can qualify for medicaid nursing home care without impoverishing the other. It's possible to do but you have to plan it well ahead of the need for it to work because medicaid has a five-year look-back period on asset transfers.

 

[Parkanzky]

Ours has gone up over the years due to coverage increases (inflation riders) but it's about $200/mo for the two of us now (our average age is early 50s now).

The reason I would be careful of self-insuring is if one of you needs care before the other, you don't want to have to impoverish the healthy spouse to get long-term care for the sick one. You should also see an elder care attorney about setting up your affairs so that one of you can qualify for medicaid nursing home care without impoverishing the other. It's possible to do but you have to plan it well ahead of the need for it to work because medicaid has a five-year look-back period on asset transfers.

I have been trying to understand Medicaid rules. I know that for the "community spouse" (The one staying home in that situation), there are asset and income limits that would be pretty daunting. I know that the house and one car are exempt, and then the community spouse can hold onto about $115k in assets and have a modest income (~$2900/mo, IIRC). However, I had ASSumed, that the 401ks would also be exempt. I see that they are not.

Now, I need to really make sure that I understand the costs. We have been planning for significant income in retirement. Nearly enough to cover nursing care for both of us. So it's possible that we still want to go the "self-insured" route. If I end up in a nursing home with Alzheimer's when I'm 80 years old, then chances are that would have to pay $1-2 Million in today's dollars for my care if I live another 10-15 years. That's probably fine, because we should have that much to spend and my wife's expenses will be a lot less than they will have been in our sixties (I assume we'll slow down in our eighties!). The risk is if one of us has a stroke at 58 years old and we has to spend the next 30 years in a care facility. That would put a huge strain on our savings, and would leave the healthy spouse living a much more spartan lifestyle.

I self-manage our finances, and I feel like I've done a pretty good job of it. But it sounds to me like I should be setting up an appointment with a fee-based financial adviser with expertise in this area.

 

[Country Geek]

I self-manage our finances, and I feel like I've done a pretty good job of it. But it sounds to me like I should be setting up an appointment with a fee-based financial adviser with expertise in this area.

No. Elder Care attorney. Well OK, maybe a financial planner, but you also want the elder care attorney. One who can advise you on the rules in your state, and set up the necessary trusts to protect you assets.

And sooner rather than later, because there are "look back" rules that mean that certain actions have to be taken at least 5 years before needing care.

One saved my Mom's bacon when my Dad got very sick (and died) a few years ago.

 

[k0ua]

Sorry, but this is really bad advice. Disease specific insurance is mostly a scam. Yes, get good general health insurance that covers everything including cancer and life insurance if you need it, but stay away from cancer insurance, heart attack insurance, toe fungus insurance, etc.

Where is the scam in paying a person a large wad of money the moment they are diagnosed with cancer to pay all of the bills that health insurance does not address like transportation, meals and rooms for them and their loved ones while they are away from home being treated at one of the large cancer centers in this country?. And then goes on to pay a specific named amount for each treatment procedure in addition to any other health insurance they may or may not have. Many people go broke from the non health expenses they incure while they are away from home taking lengthy treatments. I am sorry but your advice is very bad. All insurance is a "scam" if you never have to use it. But it is a Godsend when you need it.

 

[Travelover]

Where is the scam in paying a person a large wad of money the moment they are diagnosed with cancer to pay all of the bills that health insurance does not address like transportation, meals and rooms for them and their loved ones while they are away from home being treated at one of the large cancer centers in this country?. And then goes on to pay a specific named amount for each treatment procedure in addition to any other health insurance they may or may not have. Many people go broke from the non health expenses they incure while they are away from home taking lengthy treatments. I am sorry but your advice is very bad. All insurance is a "scam" if you never have to use it. But it is a Godsend when you need it.

You can take out insurance to pay you for all kinds of reasons. I regularly get offers to buy "home appliance repair insurance". Why don't I buy it? Because like your "cancer insurance", it provides a very poor payout for the premiums. And worse, these insurance products keep people from building up a proper emergency fund by nickel and diming them with fear based pitches for these crappy insurance policies. My advice is to build up an emergency fund to see you through life's unexpected costs, carry real insurance to cover you against events that you really can't afford and forget the rest of these poor value insurance products.

 

[k0ua]

You can take out insurance to pay you for all kinds of reasons. I regularly get offers to buy "home appliance repair insurance". Why don't I buy it? Because like your "cancer insurance", it provides a very poor payout for the premiums. And worse, these insurance products keep people from building up a proper emergency fund by nickel and diming them with fear based pitches for these crappy insurance policies. My advice is to build up an emergency fund to see you through life's unexpected costs, carry real insurance to cover you against events that you really can't afford and forget the rest of these poor value insurance products.

Okay, Dokey. I guess I don't understand how cancer insurance is not "real" insurance and is a poor value. The only other type of insurance that you are guaranteed to use is life insurance if you keep it in force it is guaranteed to be used. With cancer insurance you have an almost 50 percent chance to use it while you are still alive if you are male. I don't agree that this is not a good value.
Cancer insurance premiums are very low, typically about a dollar a day. Do you know anyone in your family touched by cancer? Of course you do. Why would you buy health insurance when you may not ever need it. Why not just build up your emergency fund to take care of the everyday costs?. After all many people go decades without any major health costs, right?
An argument can be made that all insurance is not a good value. And if you do not use it, you will have lost money. This is all true, and yes all insurance purchases are based in fear. Fear of the unknown. If we knew the future with certainty, all insurance companies would go broke immediately.