Is Long-Term Care Insurance Worth It?

I bought LTC insurance four years ago. I bought my LTC insurance through my credit union. They have a history of not raising premiums and there are other benefits too.

I tried to buy through penfed, but they denied me because of “memory” problems which went away after I was treated.

Are LTC companies counting on some of their subscriber dying quickly, or needing only STC? or are they expecting to have fabulous returns? If you’re going to be putting $500/month into LTC at age 47, shouldn’t you just put that into a financial vehicle you can draw on? Or is that just too easy? I guess that may work for disciplined people?

My parents had LTHI. My father worked through his after four years in assisted/ nursing care. My mother’s has come in handy for several surgeries. It paid for her rehab. Her premiums continue to go up- yearly. The helpful part is mom is used to the beat and her insurance covers what she expects.
It does not pay for independent living situations.
We do not have it yet. Haven’t wanted to part with the premiums yet. Hubby just turned 62 and I am 55.

I have long-term care insurance. I was really fortunate because my employer (a state U with over 10,000 employees) partnered with a company and if you signed up when it was initially offered they waived exams/medical history for everyone. Given some really horrible things that run in my family, I would probably not qualify if it weren’t for this deal, but since I was so young (31) when I signed up for it, the premiums are pretty reasonable.

I’ll preface my comment and say I sell LTCI

“Almost 70% of people over 65 need LTC” http://www.longtermcare.gov/LTC/Main_Site/index.aspx

You have stated most of the reasons to buy LTCI but I think the most important which you had mentioned is that you get to maintain your lifestyle as best as you can when purchasing it. No one especially parents want to rely on a nurse or child to help them in life. They dont want to cause burden with time or with money and LTCI can help the accomplish that. Does it pay off? I say 7/10 benefit monetarily and the other 3/10 benefit from having a peace of mind.

LTCI is changing. Many companies closed that part of their business because it wasn’t profitable enough. Either they paid out a lot of benefits suggesting its good to have, or they couldnt sell enough of it. Additionally you only looked at traditional LTCI which is “use it or lose it” Many companies now offer “asset-based” policies which are a form of LTCI in a life insurance wrapper. The policy I sell is called MoneyGuard. You can look into it but as you know not every product is right for every person. If my clients can afford asset based insurance they almost always move forward with it. I don’t see a lot of downsides with the structure of asset based LTCI when it fits within a persons abilities.

I am helping my parents, 89 and 92, age in place for the last year in a very active role. Mom has moderate to severe Alzheimer’s and Dad had a mild stroke last Christmas. I have watched her “change”, deteriorate a great deal the last 12 months. We do have caregivers [private paid] come in, up to 16 hours per week to give me respite and them respite from my cooking. Or to take one of them to Dr. or whatever.

They have Long Term Care Insurance – but reading it gives me a headache. And at one time I was in the Property/Casualty Insurance Business on the Commercial Claims side. So I have read all lot of legalese and Insurance verbiage. Once I finish up some other projects, will delve into it further.

But have found: there are “qualifying events” for it to kick in, it is bare bones – does not help with any aging in place costs, there is a waiting period [or "deductible"] before it starts paying and is time limited in years and there is a dollar limit per day.

It appears to be funded by an Annuity’s Proceeds that had been purchased from the same company that is providing the LTCI premium payments.

Looking at the file and correspondence in it, do not see that there have been any increases in Premium since it was taken out in 1995.

I can see a day that it will be worth it. It will not cover all the expenses of a mix of a Nursing Home’s Memory Care Unit and Assisted Living, but will take the edge off.

Hope this helps in some way – when I have spare time, have read up on the different LTCI Policies and have come away with the belief that one needs to look not only at the Premium and Coverage, but the fine print concerning what will be paid within the Policy as well.

I used to pay the bills for an elderly woman who was a retired teacher who had bought LTCI that had a 30 day waiting period for the policy to kick in and paid $150/day. She went into the nursing home at age 89 and the rate was $189/day to start and then rose to $220/day as her care increased. The nephew,who had power of attorney, was going to wait to apply for the policy to kick in. I said “Do you have history in your family of living to 100 that you want to delay activating the policy?” He chose to listen to me and she died 1 month after her 90th birthday. My dad just died of Congestive Heart Failure. The last two months of his life when he could no longer bathe, walk, or cook meals, Medicare paid for a nurse to come twice a week, and a home health aide to bathe him and change his bedsore bandages. Medicare would have paid for Physical therapy but he
declined it. We used Meals on Wheels to supplement frozen meals and us cooking for him. I went over every morning to cook him breakfast, weigh him, make sure he took his medicine correctly, run a load of wash when needed, do some household chores,and my brother went over every evening to see about dinner. Luckily we both lived nearby, and my job was part time. We were able to keep him in his home until the last week when he had to go to the hospital. Our mother will move in with me when the time comes because she does not have LTHI. I also worked for two years for an elderly neighbor who paid me $50/ 2 hours a day to come over to do chores, take her shopping, or prepare meals with her recipes that she could just reheat. She paid another neighbor to come over every morning and evening to oversee she took her medicine correctly. She died in her home of Congestive Heart Failure until the last week when she went to the hospital.

Thank you for tackling this practical topic. My sister and I have been wrestling with this exact issue as our 61 year old mother has been unemployeed for 3 years and drained her retirement during that time. While she is healthy now, both of her parents died from cancer and she has not taken care of herself very well during the last couple years.
I’ll be passing this on to our family.

Thank you for this post and the insightful comments. I just started doing some LTCI research in the last couple of weeks for my husband who will turn 60 in October.

I think this article was good because (1) the writing style was very good, (3) the topic was an important one that you don’t hear enough discussion about, and (3) it sparked a lot of good comments which were also very helpful. However, to say how much his mother’s bills were without the coverage, and then turn around and say that maybe you don’t really need it because he has some hunch that nursing homes won’t be around later and you can just use Medicaid for the payment seems almost negligent. You might want to research how much in assets you can have and still qualify for Medicaid, before making a blanket statement like that.