Have you used long term care insurance?

maifleur01

This perhaps should go over in Financial but if you are here you may have used it rather than just planned for it.

My husband is in a nursing home as a private pay patient. Because the cost of LTC insurance was so high if available in my 30's I opted out of finding a company that offered it. It is much easier to find a company now. I simply increased the amount going into savings instead. My family members keep telling me to purchase the insurance although I am almost 70 and should???? have enough in my savings to cover both mine and my husbands nursing home care for about ten years with a combination of income and savings. I am wondering if anyone that posts here have any comments about it. Over the years I have heard many comments that people have dropped it because the rates have increased so much that it was too expensive. I have also heard other comments that once it was needed what was actually received was much less than what the original policy stated. I need something I can show pro or con to my family besides that to me at my age it does not make sense.

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bpath

I'm 60 and don't have LTC and have no idea what the premium would be. My parents are in their 90s and just about to move to a skilled nursing facility, Dad is already in respite care at one, following stroke rehab. I recall visiting an assisted living home several years ago with my mom, and one couple at our info session asked half a dozen times if they could use their LTC for assisted living, and the answer every time was "yes". So not just for nursing care, but assisted living, too, which is very attractive. How much does assisted living cost in your area?

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maifleur01

Assisted living would depend on the type. Some you rent a room and share meals which can range from $895 to $2,750. Some are like an apartment with similar costs. Others you pay an entry fee normally $185,000 or larger. The average is around $225,000. All you have to pay extra for care. The one in Minneapolis the care started at $165 a day and went up plus food.

No one had told me either here, KCMO, or in Minneapolis that assisted living does not take people over 250 and then only if they can do everything for themselves. Above that weight it is assumed that they will need two or more people to safely help them do anything which makes them ineligible for assisted living and the only option is skilled care. Which was my husband. Because Medicaid sets a rate of $185.43 for patients who need Medicaid to pay for them many of the nursing homes in this area use that as the daily rate for all patients. For my husband the cost of a room in a skilled nursing facility is cheaper than being in an assisted living facility. With the $185.43 which includes everything a skilled facility is much cheaper than assisted living.

I am a retired federal employee and when I just looked at a $200 a day policy for a maximum of five years the rate per month is $523.30 a month but the maximum that could be paid is $365,000. The rates also increase every year until you start using it. Until recently, I do not know when it started being allowed, LTC was not able to be used for assisted living but only skilled nursing care.

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maifleur01

I would really like someone who has used it or dropped it to post. Giving what you thought of it.

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jakkom

I'm sorry to tell you, carriers don't write LTCi on anyone over age 69. I used to pull quotes for insurance from multiple carriers when I worked in an independent CFP's office, and that cut-off rule was across the board.

You'll hear different stories because many older LTCi policies were quite different from what is sold now. Many older policies were cheap to buy, but carried exclusions that were poorly explained to policyholders.

Very few of those policies were tax-qualified, either; meaning that benefits were counted by the IRS as regular income, reducing its value.

Modern policies are now more consistent in features, but it is expensive insurance.

In 2006 I pulled a quote for LTCi for a 61 yr old woman, very good health, for $250/day benefit, 90 day exclusion, 5% compounded inflation protection and 100% home healthcare option.

The quotes from major, stable, highly-rated LTCi carriers ranged from $19,000/yr to $26,000/yr. - in 2006!

As a comparison, some friends of ours just got a quote for $200/day, 90 day exclusion, 4% compounded inflation and 100% home healthcare. She is super-healthy and 55 yrs of age. She was quoted a premium of slightly over $300/month. That's a very competitive quote, slightly under market in fact.

LTCi is best purchased well before one needs it. I have been advising my niece and nephew to buy it now that they are in their 40's. We bought ours when I was age 48 and my DH age 46.

Have not had to use it, thankfully.

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maifleur01

Most sites state that companies will not sell policies to anyone over 84 not 69. I know that the companies I have looked at they will give quotes for over 69. If they will sell a policy to a person in their 80's without a long wait(exclusion) is another question.

Were you aware that most LTC premiums double about every 10 years? I am retired federal employee and the past couple of years the premium has been increasing on an average 20% a year. An article in Forbes magazine in August 2016 stated this: "Last week, the federal government announced that premiums for nearly all of its existing long-term care insurance policies will increase—by an average of 83 percent. In other words, they will almost double for federal employees and retirees." Many people that purchase policies do have trouble paying for them once they are retired. I had hoped that someone who assisted their loved one using this type of policy would respond.

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