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Long Term Care Insurance?

1,634 Views | 17 Replies | Last: 6 yr ago by Stive
Bird Poo
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AG
Is this something I need to look into at 40 years old? My company recently made it available and the thought of paying $250 per month for both my spouse and I seems steep. I imagine getting serious about this 20 years from now but I wasn't expecting a small car payment at this age!

This is for nursing, hospice, and disability care if you can't take care of yourself and is good for 3 years. Just doesn't seem wise to purchase at this age.

I also have 5 kids so hopefully they can take turns changing my diaper!
Casey TableTennis
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At 40, I typically advise this be addressed behind a number of other priorities. If you are on track with adequate cash reserves, savings/investment, debt pay-down, disability and life insurance, college planning, it might be next. I would put a solid (at least current) estate plan in front of it too...


Dynamite08
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Casey is correct. Is it important? Yes. Is it better to buy younger? Yes, because it's much cheaper. But, as Casey stated, make sure all your other ducks are in a row first. It is expensive, but great to have if you can afford it to prevent your estate/retirement from being derailed by an LTC event. The odds are high you will need it at some point and those odds are increasing along with our life expectancies.
Whitetail
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Don't buy insurance through your employer.

Bird Poo
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Whitetail said:

Don't buy insurance through your employer.


Well, not technically through my employer, but they partnered with Trans America and the quote was provided through them. Are the bias high for some reason since they know we have stable jobs?

What other insurance should I avoid purchasing through my Employer? Serious question because I have life, LTD and STD through companies my company has partnered with.
Whitetail
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The insurance that goes away if you lose or leave your job you want to avoid.

It would suck to pay in to life insurance and leave your job when you got older and a term life insurance policy would be much more expensive.
Harkrider 93
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A lot of places allow you to keep it after separation. It is a good question to ask. Also find out how they price it after you leave.
The Original AG 76
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Harkrider 93 said:

A lot of places allow you to keep it after separation. It is a good question to ask. Also find out how they price it after you leave.
THIS. The odds are astronomical that you will NOT need LTC while you are working or even for a few decades after you retire. While working you need LT and ST disability plus life.
LTC in general is a risky and expensive gamble. They still are developing their actuarial tables as the policy holders are just now starting to use this relatively new product en-mass. Several insurance companies are getting out of the business as they have found that the expenses had not been covered by their already LARGE and growing premiums. My own agent and also a cousin in the business have warned their clients ( in private) that they feel that there is a good chance that policies bought a few years ago or by people in their 50's with all sorts of guarantees about future caps on premiums an such are finding out that EVERY policy have microscopic fine " get outa jail" clauses that the insurance companies will use to seriously jack up the premiums as they discover that aging boomers LTC is a lot more costly than they allowed for in 2005....
BE CAREFUL and use that money to build a retirement portfolio where you can provide for your future via you assets .
Bird Poo
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The Original AG 76 said:

Harkrider 93 said:

A lot of places allow you to keep it after separation. It is a good question to ask. Also find out how they price it after you leave.
THIS. The odds are astronomical that you will NOT need LTC while you are working or even for a few decades after you retire. While working you need LT and ST disability plus life.
LTC in general is a risky and expensive gamble. They still are developing their actuarial tables as the policy holders are just now starting to use this relatively new product en-mass. Several insurance companies are getting out of the business as they have found that the expenses had not been covered by their already LARGE and growing premiums. My own agent and also a cousin in the business have warned their clients ( in private) that they feel that there is a good chance that policies bought a few years ago or by people in their 50's with all sorts of guarantees about future caps on premiums an such are finding out that EVERY policy have microscopic fine " get outa jail" clauses that the insurance companies will use to seriously jack up the premiums as they discover that aging boomers LTC is a lot more costly than they allowed for in 2005....
BE CAREFUL and use that money to build a retirement portfolio where you can provide for your future via you assets .
Gotta say, this makes a lot of sense and it's the kind of background information I'm searching for. Many Thanks Original Ag 76.

I was leaning against it due to my age. The agent had trouble answering my questions about rising premium scenarios and it seems like they have every intention of raising those costs the older you get. I'm covered in the LT and ST department and have a good 401K.
dlp3719
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Only good for 3 years?

Average stay in an assisted living facility is 2 years. Cost is $7k to $10k per month for a nice place.

However memory care residents can live in a facility for 20 years. This would be where you really want the insurance to work. If they limited it to 3 years of payment, I would look elsewhere.
The Original AG 76
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dlp3719 said:

Only good for 3 years?

Average stay in an assisted living facility is 2 years. Cost is $7k to $10k per month for a nice place.

However memory care residents can live in a facility for 20 years. This would be where you really want the insurance to work. If they limited it to 3 years of payment, I would look elsewhere.
I went thru many many years of assisted and then memory care facilities with my mom and in Texas the costs are from $5k to $7k per month all inclusive in a top end place. Full blown Alzheimer's is a lot more expensive and that is what could last for 20 years.
Bird Poo
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At that point wouldn't you want to take advantage of Medicade?
Stive
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kayakag said:

At that point wouldn't you want to take advantage of Medicade?

That only kicks in if the person needing care has virtually zero assets left.
AggieT
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Might be a stupid question, but here goes:

Husband and wife both retire at 65, and he is shortly thereafter diagnosed with Alzheimer's and needs 20 years of care. What is the best way to protect the assets and retirement savings of the wife if Long Term Care Insurance is not a good option (at this time)? Will all money have to be spent on the care of the husband, leaving them both broke in short order? Is there some way to separate assets so that the wife still has money for her own care in retirement?
Casey TableTennis
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Medicaid has a 5 year look back on gifts. Any planning to get rid of assets would ideally happen well in advance of a need. This is an area that elder care attorneys or special needs attorneys would be highly recommended.
histag10
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Medicaid also has estate recovery, which can be a HUGE shock to loved ones after you pass if Medicaid has been paying for your long term care/nursing home.

It's never fun for a loved one to open a probate, begin dealing with your assets and settling all accounts, and then get a 200K claim against the estate for medicaid reimbursement.
histag10
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AggieT said:

Might be a stupid question, but here goes:

Husband and wife both retire at 65, and he is shortly thereafter diagnosed with Alzheimer's and needs 20 years of care. What is the best way to protect the assets and retirement savings of the wife if Long Term Care Insurance is not a good option (at this time)? Will all money have to be spent on the care of the husband, leaving them both broke in short order? Is there some way to separate assets so that the wife still has money for her own care in retirement?


Talk to an attorney. Maybe a trust?
AggieT
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Fortunately, I gave a purely hypothetical situation. Just curious.
Stive
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Happens a lot and there are attorneys that specialize in it and can help, but it's not easy and it isn't cheap.

It can also be cumbersome for the remainding spouse/heir. LTC insurance is cheaper and easier in almost every way than going through some of those headaches.
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