Based on conversations w/ a lot of estate planning lawyers I did marketing/writing for, long-term care insurance is almost never worth it because the coverage is usually crap and it usually becomes prohibitively expensive to keep it once you get to the age where you're most likely to need it.

If you have a lot of assets to protect, they recommend Medicaid planning instead to protect your wealth and get Medicaid to pay for you if you ever end up in a nursing home.

My mom has LTC insurance and without it I have no idea where we all would be. She has Alzheimers and her care costs just under 7k per month. She has been in assisted living for the past 10 years and her policy has paid at that rate for the entire time. Her only expenses are for medication and doctors visits, as her policy pays for both room and board. It certaintly depends on the benefits of your particular policy but from my experience with my moms policy it has been fantastic. Her policy started when she was still employeed and in her mid-60's. She paid premiums of $600 per month without an exam and no pre-exisiting exclusions. That was a ton of money but she had already been diagnosed at that time and we were 100% certain she would need to use the benefits. Even if she had paid premiums of double or triple that amount, it would have been a steal. With her policy, no premiums are made after the benefits are activated so there are no longer any monthly premium payments. If I were you I would research all the terms of the policy prior to making a decision. Assisted living is far more expensive then I would have ever imagined. Better to have a little insurance to off set the cost of care then nothing at all as long as the numbers all work in your favor.

Another option would be to get a life insurance policy which can be converted to a long term care policy if you need it.

This will be more expensive, has no tax benefit at the current time, may have some at the time of use with the rollover, and has cash value if you do not actually use it.

This may be a good option for some people if they are not sure that they will need long term care, or not for very long. If you do not use LTC insurance, you lose it. If you get the correct type of life insurance for conversion to LTC and don't use it, you can leave it as a life insurance policy or you can cash it out.

My late father lived for seven years in a wonderful assisted living facility. When he first went in he was spending under 5K/month and at the end he was spending over $8K/month. In his situation it was money well spent. He had several good years there, while mobile and able to enjoy all the facility had to offer. At the end, Hospice care was needed on top of the basic "assistance". In our state "Assisted Living" does not provide any level of skilled nursing care. After hospitalizations, when more care was needed VNA (Visiting Nurses, PT, OT, etc.) would come to his apartment for his care. Medicare and his supplemental insurance covered the additional expenses.

DH and I have not bought LTCI, instead we have invested wisely, and should the need arise, we will pay for it out of pocket.

We dropped life insurance when our kids were out of college and independent.

People in our town often joke at the progression we have witnessed as we age: sell the house, move to X-condo in town, then from there move to Y-assisted living and hope to hell you never end up in Z-nursing home attached to it.

ETA: ilikefriday, your mother is fortunate to have been able to purchase such a policy. I don't think policies like that exist now. I am sorry she has Alzheimer's having seen its ravaging effects of families where my dad lived. There was a separate unit for the memory impaired.

Bonnie - Thanks. My mom is in the memory care unit of the assisted living facility where she lives. Alzheimers is a horrible disease and I am thankful for the kind souls who work there and that they and are able to handle her in a way that helps to maintain her grace and dignity as much as possible even though at this point she has no clue what grace and dignity actually are....

If the type of policy that my mom has does not exist anymore then that is a shame. My parents were never in a position where they could have saved for something like this. It would not have been possible. The premiums payments alone posed a tremendous hardship.

ilikefriday, I can only imagine what you are going through. It is gut-wrenching to witness it. My father's body slowly fell apart, but his mind was sharp until the end. I honestly don't know which is worse. He was all to well aware of how little he could do to help himself and he was a very proud man, always meticulous in his self-care.

I wish you peace and strength.

Life insurance - I need to decide what to do with that as well. At least that you know will pay out eventually....

My parents spent thousands on LTCI paying premiums for many many years but when they needed it, it wasn't worth the paper it was written on! It was a total waste of money. I don't know where people are finding these policies that are paying up when needed. Once my Mom had to go into a nursing home, we all thought that she would be taken care of with this insurance they had purchased. My sister-in-law was telling us that it wouldn't pay jack s**t, she said that she knew because she had sold insurance for years and she was right! I think that in the end, it ended up paying a couple thousand. It was a joke!

Most insurance companies that once sold LTC are out of the business as claim rates have soared and costs have skyrocketed. Premiums often go up the contractual maximum per year.

You have to answer the why question. Why do you think you need it?

Increased risk of something like alz?

Need to protect assets for spouse or heirs?

LTC hasn't really worked out for insurance companies or customers. Some people got lucky - see above - and some people will soon be forced to drop their coverage because they cant afford the premiums. Make sure you know what your need is before you buy.

I don’t have much to add, except to stress that you really need to have your existing policy evaluated by someone you trust before you cancel it. You might have either a gold mine or a dud, but no way to tell until you read it with an eye toward the fine details and loopholes. It might be worth the added 15% cost in the long run, but then it might not. If you have a financial advisor, I would have that person do it. Or an estate planning attorney, but not someone who wants to sell you something else, or an amateur, or a relative.

With your pre-existing health conditions, you might find it hard to obtain a reasonably priced life insurance policy. It depends on the condition and your age. You will likely have to obtain a physical.

My late husband had LTC insurance. He was 60 when he went into Hospice (he required skilled nursing). The cost was $9600/month and his LTC insurance, which he'd been paying into for only five years, paid 1/3 of it.

I bought my LTC when I was 40 (I'll soon be 65). I could have opted to increase coverage this year at a much higher rate, but I'm financially prepared (no debt), so I'm keeping the lifetime maximum originally set. I pay only $500 per year, so I hope to at least break even, when needed.

Outsideplaying - I have lots of life insurance, just thinking about whether I keep all of it or self insure once I retire. I guess I can consider a strategy where life insurance pays for long term care as long as one of us dies before the other (or both of us) runs out of money to pay for long term care. I think that could work along with the benefit of guaranteed payout to someone at some point.

I would not buy it because I do not trust insurance companies. They are not in the business to lose money. Instead, we have investments that we can use if necessary. We have health insurance, and I think that should be enough. No one in my family has gone into assisted living for more than a few months - my grandmother at 86, and my father at 89, and he went to a VA home. He hated it, but he was a danger to society because he had Alzheimer's and Parkinson plus tunnel vision and could not be stopped from driving. My brother finally took his keys away from him, however, and then he always wanted to be chauffeured to one place or another, as he could not sit still. At the VA, he threw a wheelchair at one of the nurses.

Amen Olychick! I totally agree.

I have known a few who have/had long term health care insurance that has been a good thing. However, in recent years, I seem to hear more negative thoughts about it. Lars, you are lucky if no one has gone into assisted living for more than a few months. However, that doesn't mean that you or a loved one won't need to. Assisted living is expensive and most of the time, insurance does not cover that (like it would a nursing home). My grandmother had alzheimers and was in assisted living for close to 6 years. My grandfather was very smart in having several life insurances policies that he never cashed out - we did that after his death, plus he had a sizeable annuity. I invested the money and we were able to care for my grandmother. We did not have to sell their home and property and she still left a sizeable estate when she passed away.

As mentioned, my MIL was in a nursing home for eleven years. My grandmother was also in for quite a few years - she qualified for medicaid because she didn't have any money, not because she protected her wealth. Neither of my parents were - dad died at 62 and mother at 84 still living reasonably independently in an apartment. We would be private pay if we end up in that situation. I originally thought it might be a good idea because we have no kids to help us stay in our own home. However I'm more and more convinced it's just not a viable concept - insurance companies can't make money on it without exorbitant rates and limited coverage to the point it's just not worth it. I think I'll stick with the life insurance as a safety net if we live so long in such bad shape we need that kind of care for too long. I just don't think that's going to be the case but you never know.

My understanding is that the older policies were more generous and had fewer exclusions. My parents have a policy that they pay a $1,000/mo premium on, and are now moving into assisted living at the end of this month ($14,000/mo) and will get a smallish portion of their expenses covered (and no longer have to pay the premium)—for just 2 years. And that's an older policy that the head of the facility said was a very good policy, and that the newer ones have all kinds of restrictions and exclusions that make them much less attractive.

I don't have anything to add regarding insurance.. but I am really surprised by the costs/month you all are quoting. The numbers I am seeing above for memory care facility and/or skilled nursing care are MUCH lower than we've experienced over the last 5-6 yr. Maybe it is regional?

My grandfather needed some skilled care though not major-- and he wasn't in a memory care unit and his cost/month was 13k/month. My grandmother was in assisted living-- no skilled nursing, no special care, not a multi-room apt.. just a studio apt for almost 9K/month. These weren't fancy upscale places-- that wasn't their style. In fact, my grandfather's was not what we'd have liked because he entered very quickly and unexpectedly and we didn't have the luxury of waiting for one of the better facilities.

I'm sure it is regional. My mom is in a retirement home in a small city in Eastern Washington that offers graduated assistance. I think when she went it (not needing assistance) it was $3200 a month. She need's more help now, and they've bumped it up to $4500. For a 1 bedroom. I think the nursing home she was in after her C. diff infection was only a bit over $6000. Here in the Bay Area, it's all much more expensive.

It is very regional. It is expensive here (MN) as well. I bought a Genworth LTC policy at age 55. The premiums went up quite a bit over the last two years, and though I am conflicted every time I pay it I still do. I can afford the premiums and it gives me some peace of mind as a single woman (no life insurance).

When my MIL was last in (in Minnesota) it was around $11,000 a month. This was a nursing home where she had a private room. She was also wheel chair bound and had significant short term memory loss so I imagine her level of care was a bit more than the base level.