We were recently faced with the potential of placing my wife's grandmother into a full care nursing facility due to two debilitating strokes. The costs we were quoted were astronomical. The grandmother passed away relatively quickly in hospice care without moving to the facilities. But if we had moved her, even with a decent estate, all monies would have been exhausted within a few years.

Do any of the financial adviser types on the board recommend carrying a long term care policy? It seems like most of what I have read on the internet alludes to the premiums being too high for the benefit. TIA.

I know Dave Ramsey is pretty adamant about anyone over 60 carrying it unless the cost is prohibitive

For the really wealthy and low net worth (relative to their spending), I don't generally think it makes a lot of sense financially. However, for those that should enjoy a comfortable retirement without a major health event, it can be a great risk mgmt. tool.

Also, I generally prefer asset based/life insurance based type policies as it gives better protection against premium increases.

It's another one of those case by case deals.


The poor have medicaid (and can't afford it anyway).

The ultra wealthy tend to absorb the risk.

In my experience, the "weathly" (not ultra wealthy) tend to prefer owning it. It's a miss small or miss big option. Missing small means they paid the premiums (which they could afford) and didn't need the coverage. Missing big is they wish they could have the 500k-1M back that they spent on care.

The group in the middle is where the product flirts between needing to be owned or not. Most of that crowd will have between $500,000 and $2,000,000 in accessible assets. Technically that's not enough to self insure but far too much to ever qualify for medicaid. A large LTC claim can wipe out 25% or more of that number during retirement and destroy well laid plans for distribution from retirement accounts or planned inheritances. If that's where you see yourself landing during retirement, then seriously consider the product.


Over the past 6-7 years that insurance market has gotten crushed by the low interest environment and higher than expected claims. Every major carrier has increased premiums on inforce business and new business and many have left the market completely and shut down their LTC products. It's not a cheap product, but as the OP noted, the alternative is much worse. The odds of using the product are extremely high as well; with a relatively healthy 60 year old couple, there is a better than 65% chance that one of them will have a LTC insurance claim. That ranks behind life insurance (100% you're going to die), and health insurance, but far higher than things like a house fire, auto wreck, or disability claim.

Like any insurance that takes into account age and health, it's cheaper the younger you purchase it. But that needs to be balanced out with the practicality of how soon is too soon. I know a few CFP's that purchased it for their college kids to lock in rates and insurability (I personally think that's overkill). Most advisors that I know that are comfortable wading deeply into the insurance conversations begin the discussions with clients in their late 40's or early 50's. IMO, waiting until 60 is really walking your clients up to the edge of the cliff; by waiting that late you have a much higher risk that the client can't get the coverage (and in long-term care, if you get declined by one company, you're likely declined by all).

I firmly believe in either looking at a Permanent Insurance policy with Chronic Care rider or replacing wealth lost with a second to die insurance policy.

I'm not a fan of "traditional" long term care insurance. The premiums keep getting increased year after year and they aren't small increases.

I've changed my thinking over the last 5-6 years and agree with nac and Casey. The combo insurance products are seeming to be the best fit in this market right now. Some of the prices on them are even more eye-popping than pure LTC but at the very least you know you'll get the premiums back PLUS a large non-taxable cash influx when you pass, if you don't need it for the long-term care.

It's essentially just moving money from one pants pocket to another, but transferring the LTC risk to the insurance company.

LTC is great. Disagree on insurance. The whole tax free bit on life insurance sounds great, but if the monies are already invested the beneficiaries get a stepped up cost basis regardless which is essentially the same thing. So, you're paying the insurance expense for little to no reason.

Granted most of my clients only use life insurance for legacy estate planning purposes, and not for income replacement.

I have multiple clients that had policies issued when they were less than 5. They have achieved some of the best returns over the last 20+ years.

Your first post craps on life insurance. Your second post talks about how great kid policies are over the last 20 years.


Dang I love when the ZoneClub clown show shows up to a thread.

One is for older clients, one is for younger wealthier. Different cohorts.

Not worth rolling around in the mud with you. Im laughing out loud right now. I guess you love a one size fits all approach. You also cant get LTC until you are 40, so its apples to oranges on anyone that a minor.

Thanks omniscient one. ROFL

This has potential...

I am not a fan of LTC, but it does solve issues that some clients have. I remember a stat that said 75% of all folks needing LTC were in it for 18 mos or less.

As for the wealthy... I had knew one wealthy individual who bought a one time premium LTC policy of 100k. I asked him why he bought LTC when he had plenty to cover himself. His response was that all the risks are now on the LTC company. Did make me think differently about wealthy folks considering LTC.

Only anecdotal, but I know my family has struggled with the two LTC type insurance policies my grandmother had. She's in care now but its been tough to get them to pay as in home warranty tough based on stipulations they included to determine whether or not she could still care for herself when to anyone around her it was obvious she was well past being able to doing so.

I know the feeling.

Sadly, most claims in that world are done strictly off of paper. If the medical records don't cover the physical limitations, the guy in the cubicle at the claims dept is running blind. It can be as obvious as day and night to anyone standing there, but the if it's not spelled out for the analyst, it can be a tough fight.

I like the idea of being covered for everything that could reasonably happen and being prepared, but I personally think I would rather let the Lord take me than be confined to a LTC facility and have my life savings be spent down on me just "hanging on" and likely being miserable. I feel like with DNRs and other advanced directives in place, that makes the chances of being in a long term care facility for several years much lower. Medicare covers I think 3 months of rehab after being admitted to the hospital; so if I had a stroke at like 65 and the doctors thought I could rehab and get back to a respectable quality of life, that benefit would hopefully prevent me from dipping into private pay. Once I hit 80 though, I personally would rather not be saved just to need LTC for the rest of my life.

I'm also hopeful that technology/robotics can revolutionize long term care in my lifetime. It will take longer to replace RNs, but for people in assisted living who just need custodial care for activities of daily living like dressing, toileting, transfer, etc. I could see robots really revolutionizing things and bringing down costs.

careful...you may have just declared a virtual DNR order.

Couple of things.

For those men worried about using LTC, you can likely put that aside. Go look around a nursing home: 90% of the people in there are women. Women live longer, and don't view their end days the same way men do. They're by far the biggest users of LTC and due to that, their premiums tend to be significantly higher.

The vast majority of people that would qualify for an LTC claim are at home...not in a facility. Getting old slows things down and while a person may not need 24 hour oversight in a care center, they do need help getting in and out of a bathtub, and/or have issues with incontinence. This requires some level of "care" that is usually taken care of by a family member. While some policies don't cover home care (or make you pay for it) many either have it written into the contract, or you can add it to the policy. A couple of things are at play here: in past generations there were more children, and in most cases, there was almost always one or more of those children living near mom and dad that helped absorb a lot of that issue. In today's world of smaller families and very often all of the children living a larger distance away, the presumed care isn't down the street anymore.

The big, expensive one is cognitive impairment; a long drawn out case with Alzheimers or dementia. Those don't have a hospital stay on the front side (thus allowing Medicare to show up), they are long ordeals, and in the end, can be very expensive or physically taxing on the family. I've had a great aunt that's had alzheimers for 13 years now (8 of which have been in a home). She may pass next week, or she may live another 2 years....who knows. The 100,000's of dollars that have been provided for that care have been almost entirely at the insurance companies expense, thus keeping north of 1MM in the estate or the kids/grandkids pockets.

Will keep this short... Those of you saying "pull the plug" or "take me home Jesus" may not have a choice. As Stive says, dementia is in the mix and it can be a financial tragedy. Most who don't want LTC have never dealt with a LTC issue with someone close to them.

Another factor to consider: some LTC carriers offer to cover claims for in-home care, and some don't. In-home (not hospice) care is starting to become a more desirable option than nursing homes/assisted living centers in some circles.