Tonight on NBR – July 31, 2013


When is the best time to get long-term care insurance?

Don’t miss our special series tonight on NBR.

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  1. Astrid Berkson says:

    The person who said that if we didn’t have 250,000 in assets we didn’t need long term insurance was wrong. without long term care insurance, the first spouse can use up all the assets pretty quickly, leaving the second spouse penniless

    • That was exactly my point, Astrid. If you have less than $250,000, you arguably don’t have enough in assets to justify the rising LTCi premiums. Instead, you could rely on Medicaid to fund your long-term healthcare needs after your net worth is (quickly) exhausted. Of course, if you can’t stand the idea of being on Medicaid, by all means, pay for the insurance. That’s a completely justifiable emotional decision, but the economics struggle to justify the decision to pay LTCi premiums when you don’t have enough assets to protect.

      • S.Wright says:

        Looking at long term care insurance solely as protection for assets is very short sighted. Writing off or invalidating reasons as an ’emotional decision’ is disingenuous.
        People do many things for many valid reasons. Actually most people purchase long term care insurance for independence and to retain some dignity – not to protect assets. Perhaps you should visit a Medicaid facility… may better understand the importance of not letting that be an option.

  2. Sally Greene says:

    My mother, now 91, bought long term care insurance in 2003. Annual premium is approx $6,000/yr. She’s been living in assisted living for 4 years. In order for her LTCI to kick in, she must lose the ability to perform 2 ADLs, and the elimination period she chose when she bought the policy was 90 consecutive days. Currently she needs assistance with medication, only. That’s not an ADL. Even after a mild stroke, she didn’t qualify to file a claim.

    Did she buy a lousy policy? I don’t think so. I think most LTCI policies are based on losing your ability to perform ADLs. People don’t understand that. I know my mother didn’t understand that when she bought the policy and I’m sure the agent who sold it to her didn’t overly stress how her policy would work. She just thought that she’d be “covered” once she moved into an assisted living facility.

    I liked the comment from the man interviewed last night who said people need to have a long term care PLAN, not necessarily long term care insurance. I think many people are buying policies or think they should buy a policy without really understanding how hard it is to collect any benefits.

    • You are absolutely right, Sally, that the receipt of a LTCi benefit is predicated in the vast majority of LTCi policies on your inability to perform at least 2 of the 6 activities of daily living (ADLs). Frankly, I’m afraid you’ve seen exactly how expensive LTCi can be–after all, your Mom was 81 when she purchased her policy. The optimal value in LTCi is typically found when the insured is in his/her 50’s. It can still make sense in your 60’s, but it starts to becoming increasingly cost prohibitive when you’re in your 70’s and beyond.

  3. S. Wright says:

    There is another focus that has not been mentioned and that is the flexibility having a
    long term care policy provides. If you get it when you are in your late 40’s,50’s, or early 60’s it is ‘part’ of your retirement plan. You look at that premium payment just like you look at your 401(k) contribution. That pool of funds when you need it, does not need to cover all your expenses, it can be part of the larger picture – for example a $100 a day benefit provides $3000 a month, and that premium might fit in your budget just fine. Even in expensive California residential care facilities are between $4000-$5000 a month. (Not institutions but nice homes in normal neighborhoods, providing care). So with $3000 from a LTC policy ,social security income and savings it is very possible. Also to consider is where the care is – most people I know get coverage so they do NOT have go to an institutional place to live with hospital beds and linoleum floors and a room mate. Long Term Care insurance can help keep you in your home. That I think is the best feature- the flexibility to actual be in your home for as long as possible. Another issue not even addressed regarding Medicaid is you go where there is an opening, IF there is an opening. The shortage of facilities is a whole other conversation.

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