Long term care insurance

[Briar Rabbit]

My wife and I have been discussing long term care insurance. We had another salesman give us a pitch this week. Will appreciate any suggestions to consider. What I have determined so far:

Women are more likely to benefit from coverage than men. Seems 2/3 of the people in homes are female. Makes me wonder if it is worth buying this insurance for both of us?

Medicare covers the first 100 days before Long Term Care insurance kicks in. Have to be in a hospital for 3 days first.

Some policies are available with a life insurance benefit so if the insurance is not used entirely at a home some or all of the cost is recoverable.

I was told 5 year coverage is the best alternative for women?

When selecting a home try to pick a private facility and not a conglomerate if possible. I have been told that if a patient is in assisted living (least expensive care) and the first time they have to wipe your chin you get transferred to the expensive care area. The conglomerates are more profit driven and guilty of this. If possible start with a facility that is only assisted living as you will likely stay in that area longer as they want to keep you there.

The other factor is that there is less stress on elderly if they do not have to change to a new facility, so a facility with both assisted living and full care does have some advantage.

Put the major assets in a revocable trust in the name of whoever is likely to die first which then transfers to a irrevocable trust upon their death. If the spouse lives beyond five years the care facility cannot go after the principal in the irrevocable trust, at least in our state, if the insurance becomes inadequate.

If you have monthly insurance payments set up the payment for direct withdrawal. An elderly couple in our area had paid on a policy for years. The husband got dementia while still at home and failed to pay the premium for 5 months before admitting him to a care facility. The insurance company cancelled them for non-payment and they lost 20 years of payments without getting a dime.

Assisted living in Nebraska currently costs around $5,000/month with full care about double that?

So any tips you have that will be helpful?

 

[Domenick]

There is a company, Lincoln MoneyGuard, which offers a number of LTC policies. Google them. Some banks will help you with this.

 

[Stewartb]

Talk to your financial planner.

 

[flyingron]

You'd have to analyze it in regard of your total picture. It makes no sense in my situation. My mother-in-law bought it (she was probably not competent at the time) but it worked out well for her. It certainly gave us more options when it came to her care. One thing, I'd recommend from dealing with friends in similar situations. If you get to the point where you CAN collect from it: DO IT. There's no point in "saving it up" in case a worse situation comes along. Most often with the elderly, that's not going to happen anyhow. If it does, you can use the resources you saved by collecting on the insurance now, on the later case.

Still my m-i-l burned through the LTC and we spent down her assets on her care and she went on the medicaid nursing. We had to shop around homes in different states to find the best one. We had moved her to one near us in Virginia while there were still assets. We then moved her near her other daughter in New York because the benefits were slightly better and the homes that would accept the assignement were a bit nicer. Still mom was pretty far gone at that point. Sad situation when he mind goes before the body.

 

[lbfjrmd]

Allof them suck. Salt away as much as you can, have a living will, move to a state with 'Death With Dignity" laws. There are 9 now in the states.

 

[Bell206]

So any tips you have that will be helpful?

Age/retired/working? FYI: Looked at LTC prior to retiring early 5 years ago at 53. After a number of months researching and discussions with my accountant/wealth guy/estate attorney the high cost of LTC did not give the proper bang-for-buck for me. Suggest similar track to see what is right for your specific situation and location.

 

[Bell206]

move to a state with 'Death With Dignity" laws.

FYI: Unfortunately all require terminal illness not just sick and several states no doctor will sign off. Europe only option if not terminal.

 

[lbfjrmd]

FYI: Unfortunately all require terminal illness not just sick and several states no doctor will sign off. Europe only option if not terminal.

All major illnesses reach the inevitability of death ... and some suck the estate dry and leave you with a lingering death in a N home. Plan accordingly as per my earlier post. To keep this aviation related, you wont be flying so sell the plane in a timely fashion.

 

[flibmeister]

Unfortunately, I have recent experience in this area-- my wife just qualified to use her LTC benefits in June. We bought identical policies when we were in our 40's (she's 63 now), and although her condition is such that she should be able to stay at home for the foreseeable future, the benefits are already coming in handy: I just signed a contract to have a wheelchair-accessible bath tub installed, and LTC is kicking in a little over 6k toward the cost. Plus, I've started paying people to cover my caregiver duties (more on that later).

Here are some things I've learned:

1. Almost all LTC policies have a 90 day waiting period before they kick in, but the 90 day waiting periods come in two varieties: 90 "service days" or 90 "calendar days". Be sure your policy specifies "calendar days." Ours does, so 90 calendar days after being approved, my wife became eligible for benefits, even though we had no related expenses during that time. A friend is just going through the pain of trying to meet a 90 "service day" requirement-- she has to pay a provider for services, out of pocket, on 90 different days before her husband will qualify to receive benefits. Since she's only able to afford care three days per week, it's going to be more than six months (and a lot of money out-of-pocket) before his benefits will start.

2. Eligibility to receive benefits turns on inability to complete a specified number of the six "Activities of Daily Living" (ADL's) without assistance; you want the number of ADL's specified to be low. Our policy specifies that we must be unable to complete two ADL's before benefits can begin; another friend has a policy on his mother than specifies a minimum of three ADL's. His mother only needs help with two, so they can collect nothing from her LTC policy until her condition further deteriorates.

3. Buy a policy that covers care by both professional providers and "informal caregivers", in all three possible settings: home, assisted living facilities, and nursing homes. Our policy allows me to pay anyone (that didn't live in our home at the time my wife qualified for benefits), as an "informal caregiver"-- so if I want to take a day and go for a motorcycle ride, I can pay my mother, or my wife's brother, or the neighbor across the street, or anybody else I choose to take over my caregiver duties for the day, up to the daily maximum benefit. My mother is still astounded that I've started paying her $25 per hour when she comes over to visit her DIL, but that's what "respite" is for-- when mom (or somebody else) has the caregiver duty, I don't. The only restriction on this is that we have a 500-day limit on family members serving as informal caregivers; non-family members have no limit.

4. Pick a daily maximum benefit that's adequate for today, but has annual cost-of-living increases. When we bought the policies, ours was $!00 per day; now, with the annual increases, it's $203 per day, and that figure will continue to increase by 4% each January.

5. We pay our premiums through direct deposit, but our policy has a built-in backstop to help us keep from missing a premium (and forfeiting the policy): the LTC insurance company has the contact information for a trusted friend, and if we should miss a premium payment, they'll contact that friend to help straighten things out-- and give us a 30-day grace period to make the payment.

6. We were fortunate when we bought our policies that unlimited coverage (in terms of both years and dollars) was available and affordable. Our original decision to buy the LTC policies was based on the fact that I participate in some high risk activities, and if I got tossed off a motorcycle and landed on my head, I didn't want my wife to be destitute while all our financial resources went to supporting me in a nursing home-- possibly for 30 years or more. As it's turned out, it's her that has the medical problems, but they're not life threatening, so her need for caregiver assistance could last far beyond the typical three- or five- years that most LTC policies cover-- and would probably overwhelm any lifetime dollar limit. Buy a policy without such limits, if you can.

7. Buy a policy that contains a "waiver of premium" clause in the event you qualify to receive benefits from it. Although we don't foresee collecting much from the policy as long as she's at home and I'm around, we're still saving $196 per month by virtue of the fact that we don't have to pay her premiums anymore-- but we still have the policy to lean on, forever. BTW, when we bought the policies, her premium was only $86 per month; it stayed there for around twenty years, then went up to $196.

Having this LTC policy in place (and her already qualified for benefits) is a HUGE relief to me, because in the event that I should predecease her, the LTC policy gives her options. She can choose to stay in our home (using our "normal" income to pay the home expenses, and the LTC payouts for professional in-home care), or she can move into assisted living (which runs around $5000 per month where we live), all of which would be paid by the LTC policy, allowing her to use our "normal" income for anything she chooses.

Hope this helps!

DC

 

[Clip4]

My wife and I have been discussing long term care insurance. We had another salesman give us a pitch this week. Will appreciate any suggestions to consider. What I have determined so far:

Women are more likely to benefit from coverage than men. Seems 2/3 of the people in homes are female. Makes me wonder if it is worth buying this insurance for both of us?

Medicare covers the first 100 days before Long Term Care insurance kicks in. Have to be in a hospital for 3 days first.

Some policies are available with a life insurance benefit so if the insurance is not used entirely at a home some or all of the cost is recoverable.

I was told 5 year coverage is the best alternative for women?

When selecting a home try to pick a private facility and not a conglomerate if possible. I have been told that if a patient is in assisted living (least expensive care) and the first time they have to wipe your chin you get transferred to the expensive care area. The conglomerates are more profit driven and guilty of this. If possible start with a facility that is only assisted living as you will likely stay in that area longer as they want to keep you there.

The other factor is that there is less stress on elderly if they do not have to change to a new facility, so a facility with both assisted living and full care does have some advantage.

Put the major assets in a revocable trust in the name of whoever is likely to die first which then transfers to a irrevocable trust upon their death. If the spouse lives beyond five years the care facility cannot go after the principal in the irrevocable trust, at least in our state, if the insurance becomes inadequate.

If you have monthly insurance payments set up the payment for direct withdrawal. An elderly couple in our area had paid on a policy for years. The husband got dementia while still at home and failed to pay the premium for 5 months before admitting him to a care facility. The insurance company cancelled them for non-payment and they lost 20 years of payments without getting a dime.

Assisted living in Nebraska currently costs around $5,000/month with full care about double that?

So any tips you have that will be helpful?

Long term care insurance provides a term and a daily benefit. If you want in a great facility and want your long term care to pay all of it, you are going to need a very good quality. Assisted living is not normally covered under a LTC.

Also keep in mind the boomer generation is going to cause a inflation in LTR.

 

[benyflyguy]

Save money for a nicer assistances living personal care home. This is not 24 hour skilled nursing. Shop around not justfor quality but what level of illness they tolerate. Do they have an option to rent apartment from them for “independent living” which is nice when downsizing then transition to assisted living when needed. Some assisted living will provide a lot of care. Some will balk at the thought of anything but basic assistance and push you out to skilled.
Once you are at skilled- money really doesn’t matter. Whether you are shelling out 10 grand a month personally or on medical assistance you get the same level of care.
I recommend my pts who have families they care about to start transferring assets long before you need skilled. You end up there with assets the skilled facility will burn through it all fast. Again- Money doesn’t make a difference in level of care you get at most skilled facilities.

 

[bbchien]

I had to change my benefit from 6 years to just 3, just so I could afford the premiums. Sigh.

 

[Rushie]

I had to change my benefit from 6 years to just 3, just so I could afford the premiums. Sigh.

Ouch! You must have the traditional policy with rising rates. We have been going back and forth trying to decide between that and hybrid, and we finally settled on hybrid mostly because of exactly that reason: fear of rising premiums. We have a quote for fixed premium for five years then it’s done, but you don’t get as high benefits. I am loathe to pull the trigger though, that’s a big chunk of money for pathetic return as life insurance. But the maximum potential LTC payout is much larger than what we would have if we kept that premium.

So one advisor says “LTC insurance is so expensive because LTC is expensive! That’s a clue that you need it.”

And another says, “LTC insurance is a racket.”

It’s such a horrible decision.

 

[EppyGA]

We sucked it up and took the latest increase.

 

[wilkersk]

$8k-$10k per month, per person? No, that's not a racket, that's highway robbery. I will not pay it! Nor will I pay LTC insurance premiums. This whole thing is a sham. Family and fortune are still, just like the old days what keeps you out of the old folks home.

 

[Rushie]

$8k-$10k per month, per person? No, that's not a racket, that's highway robbery. I will not pay it! Nor will I pay LTC insurance premiums. This whole thing is a sham. Family and fortune are still, just like the old days what keeps you out of the old folks home.

This is absolutely true. If your net worth is over a certain amount, you don’t need LTC insurance. You are self-insured. If your net worth is very low, you also don’t need it, because first of all you can’t afford the premiums, and secondly, you will spend down your assets quickly and then Medicaid will take care of you. It's those in the middle with the dilemma whether to buy insurance.

As for relying on family, it’s not like the old days anymore. We are having fewer children and are living longer, and women have jobs now. So it’s far less likely someone will be available to care for you themselves, and you can’t rely on them to pay for your care out of their money, when they’re saving for their own retirement and old age.

The problem with “I will not pay it,” is that when the time comes you might have no choice. By the time you need care you may not have any physical or mental power to “do yourself in” or to refuse to be put into a home.

I think the best defense against being “put into a home” is to make a plan not to. Either save to self insure, or get a policy that will pay for home care. Most policies these days allow for that. The older policies used to be facility only. Also retire into a home that is already wheelchair accessible, and close to resources.

 

[bnt83]

My grandparents worked it out great. They built their retirement home in small town SD right next to the community center that serves meals 5 days week. For thirty years they have been walking out the backdoor to the center and seeing all the other elderly folks at lunchtime and walking back with full bellies. Grandpa passed in his own house after about a week of hospice. Grandma turned 94 this month and still getting around good. Takes a golf cart to the grocery store and the post office. My parents live about 10 minutes away and check on her often.

 

[Chip Sylverne]

The mean length of stay for a geriatric in a nursing home before death is 5 months. The median length of stay is 14 months, so a very few people actually have an extended stay.

Back in the dark ages when I was an insurance exec, we looked carefully into this business. Unless things have changed considerably, we tended to agree with advisor #2 in Rushie's post above.

 

[Rushie]

My grandparents worked it out great. They built their retirement home in small town SD right next to the community center that serves meals 5 days week. For thirty years they have been walking out the backdoor to the center and seeing all the other elderly folks at lunchtime and walking back with full bellies. Grandpa passed in his own house after about a week of hospice. Grandma turned 94 this month and still getting around good. Takes a golf cart to the grocery store and the post office. My parents live about 10 minutes away and check on her often.

That’s exactly what I mean by staying near “resources”. My mother’s home is a five minute drive from the senior center where she goes and gets lunch every day. When she gave up driving, they came and picked her up in a van. They usually make too many lunches and have to throw the extra out, so they give them away, so my mother almost always brings home a second lunch that she eats for dinner. Cereal in the morning, and there you go, she never has to cook.

My sister lives in the same town and brings her what few groceries she needs and takes her to doctor appointments. I ship her paper towels and T-paper from Amazon so sister doesn’t have to keep up with that and I pay all her bills and manage her finances. She has known the neighbors for decades and so we paid a trusted neighbor to visit twice a day and check on her, before my other sister finally decided to move in with her. We have a cleaning lady in once a month.

So my mother was able to live alone in her home for years after she become unable to manage cooking, shopping, cleaning and driving, all because she had family in town, good neighbors and a senior center nearby. My other sister finally moved in because she now needs standby attention when showering, help with daily decisions and handling the unexpected, like a clogged toilet. My sister works full time as COO of a company and they let her work remotely.

She set up an office in the den and can work while mom is at the senior center but it’s beginning to get harder, mom is only gone 3 hours and she’s becoming a bit of a distraction the rest of the time. We are now trying to work out some relief for the live-in sister. Mom has a LTC policy but so far we haven’t tried to turn on that spigot.

Years ago we thought we wanted to retire “way out in the country”. We thought we wanted solitude and privacy. But that turned out to be a terrible place to be when we get like my mother. Without family and resources nearby the odds of you being put into a facility are much greater. And the “solitude and privacy” didn’t turn out to be exactly what we expected either.

 

[schmookeeg]

$8k-$10k per month, per person? No, that's not a racket, that's highway robbery.

You should see what they charge for "Memory Care" for dementia and alzheimer's. It's quite breath-taking.

Dealing with this now for mom. I don't see how anyone can private-pay for some of these facilities without 7 columns of clams in the retirement account, and even then...

We're doing the spend-down and income-cap thing to put her on Medicaid. A teacher pension from CA doesn't even cover the first level of care in OR.