LONG TERM CARE INSURANCE?

August 24, 2005 | SELF

[HateBill]

I have been considering purchasing long-term care insurance for myself as a result of seeing my father's need for 24 hour private duty nurses. The cost of this plus the assisted living facility for him is very high ($150,000/year), but he has a very generous pension (no wonder New York City is always in danger of becoming bankrupt) and also gets half of my deceased mother's pension and social security. Needless to say, I can't count on these sources, although I have been very careful and put money in 401(k), IRA, non-retirement investments, etc.

Do any freepers have experience with long-term care insurance and are able to offer some pointers?

Thanks. (I haven't posted a vanity in almost three years, so please forgive me!)

[kellynla]

Check out N.A.S.E.
They have a great medical insurance plan.
They actually refund your premiums after so many years if you don't use the policy!

[2banana]

Democrat solution. Take all his assets and money. Dump him on the state and make someone else pay for his care. Attend congressional meetings demanding more money be put in the budget for this kind of thing. Accuse Republicans of being mean spirited..

[EggsAckley]

My folks pumped many, many thousands of dollars into long-term care, but my father never got to use it. Everything he paid in was gone when he passed suddenly. My Mom used hers for about a year and a half. The company was very stingy with its payouts. Had her on a very short string. By the time she passed she had only used a very small amount of what was paid in.

That was four years ago. Perhaps the companies are more fair now. I do not remember the company name, unfortunately.

[yetidog]

I recently looked into getting long term care insurance and discovered several things:

There has not been a lot of experience with this type of insurance as it is a rather new product. An attraction is low premium while young; however, there is some evidence of premium escalation although the industry does not like to admit this fact.

Get it as young as you can if you are going to get it. Also be in perfect health. I was denied because of a common health problem. Lance Armstrong probably could not get it. It is obvious that the providers really watch their interests closely.

Not everyone ends up in a nursing home. Most of the plans offer options - a common one being the insurance does not kick in for the first 90 days of need (and need is strictly defined). It is also subject ot period of need limits etc. Lots of options really seem more like restrictions to me.

I will probably get it for my spouse since it is cheap ($30.00 per month) for her.

I'd go with John Hancock if you can. They seem to have a reputation in the field.

[KYGrandma]

We have it through my husband's company. We may not get to use it but the alternatives are worse. I have seen too many elderly have to settle for poor care because they didn't have it or the money for better.

[irish guard]

First, ....Do some analysis into death, how long people suffer before they die and whether they need long term care before you do this. Many of us just drop over in a heap and then you will have wasted your money. Others get sick and die quickly...same result. Others linger and the insurance may be valuable.

Second,......what kind of wherewithall do you have? Private nursing homes cost about $8,000 per month today. Could you cover that without breaking the bank? Some people can, again making insurance a waste.

Third,....if you can afford it, there are some retirement facilities that offer "lifecare", which allows you to access nursing care as part of the financial arrangement you make with the senior living facility.

Finally, ....you can always do what many, many Americans do....during the years leading up to your infirmity, gift all your money to your kids and when it is time to enter the nursing home, you can access Medicaid and let all of us pay for your care. Ugly but true.

Try the homework first. Either "lifecare" or the liklihood that you might never need it are probably better bets.

[ErnBatavia]

Wifey and I both have it...the cost for both of us is a touch less than $1200 a year.

Roughly speaking, (Met Life) you can choose a plan that pays "X" monthly or daily for a care facility, or half of that figure for home care. Roughly speaking again, what we've bought would cover somewhere around $130 a day for a facility.

Buy it while you're as young as you can - we started ours in our early fifties; holds the rates down.

[JoeGar]

See "Nursing Home Insurance Insights" at ...
http://ianrpubs.unl.edu/homemgt/g1013.htm

[1Old Pro]

YOu could put your assets in a trust and preserve your estate for your heirs and then let the "state" or medicaid (both synonomous with "your neighbor or taxpayers) take care of you

[ErnBatavia]

gift all your money to your kids and when it is time to enter the nursing home, you can access Medicaid and let all of us pay for your care. Ugly but true.

Indeed - but keep in mind that both states with which we're familiar (California and Minnesota) are more than prepared to go back for an extended period of time and snatch back those "gifts"...perhaps as much as three years.

[ironcitymike]

You need to see a good financial advisor. LTC is a small part of an overall financial plan encompassing protection, savings and growth and to answer what kind you need or how much, or whether you need it at all, is difficult to answer without knowing a lot of other information.

[wildandcrazyrussian]

I had a policy with NASE 20 years ago and it sounded like a good deal on the rates although I was never sick so never tested their claims policy, but then after a couple of years they were sending out erroneous information on which kind of insurance I had with them, and I could never get a human being to talk, to so I dropped them. I wonder if they have gotten better since then.

[crushkerry]

Actually Old, depending on the kind of trust you set up that's not exactly true.

Plus, the "lookback" provision for putting money into a trust is 5 years, rather than the 3 years they look back for family gifts.

There are many downsides to Living Trusts. One of them is that you hit the highest tax rates much quicker. Also, if you have any control over the Trust at all, then it will be considered an asset, both for Medicaid purposes and for inheritance tax purposes.

[joylyn]

I got my AARP long-term policy at age 51 without taking a physical. Not sure if the policy is any good. My only epxerience -- in looking for a nursing home for a loved one -- is that the homes like to hear that a person has this insurance. Admissions types really brightened up when they heard my friend had the coverage; most people still don't.

[kellynla]

They have agents(real live human beings LOL) who represent the insurance company.
I'm just now getting reacquainted with NASE.

[1Old Pro]

My post was tongue in cheek. But to your points, the poster probbly has 5 years before they require nursing care, they can get all income from the trust and a child can "manage" it as trusteee thus keeping realistic control over the assets. As far as tax rates, 50% of the "trust" assets is better than nothing.

There are other ways to preserve wealth and avoid taxation. My point is / was sarcastic that someone would actually consider taking care of themselves.

[Rodney King]

It depends on how old you are: If you think you have another 20 years before you would possibly need it, then you are better off just socking the money away in the stock market.

[IL Republican]

Several people have made comments along the line of "if you don't use it, your money is wasted."

I have insurance on several of my assets, and I have never had a claim (outside health, but they pay for a $70 doctor visit). Am I wasting my money? Absolutely not. The whole idea of insurance is shared risk. I hope that I'll never need longterm care, and live a very healthy life until one day I fall over dead. I would rather pay a fraction of my net worth for insurance and know that I have enough money to enjoy my last few years, then need to stockpile millions in case I'm in a home for a decade.

Don't fall into the trap of thinking that you need to make money on insurance. You hope that you never have to use it!

I sure as heck hope that my term-life policies turn out to be a "Waste of Money"!

[Library Lady]

My husband and I have no children. I had thought of a reverse mortgage in our later years. Would that be a good idea?