Thoughts on long term care insurance?
This seems to be a huge area of confusion for almost everyone, even many CFPs! Defining what it is is easy, determining who needs it and how much is not so simple.
It's probably a good idea to get it but also put back your own nest egg just for long term care also.
I've been wondering if my wife and I (45, 50) should buy LTC insurance now or if we should self insure. The cost now would seem to be about $75-$100 per month each for a policy that pays $150 a day for 2 years, with a 4% annual inflation adjustment - not a whole lot when compared to the cost of long term care though. The total lifetime benefit would be only about $110000 maximum per person not counting the inflation adjustment.
If I were in your shoes, I'd wait a few years to purchase this if you decide to do it especially if you both are in good health.
As a disclaimer, I don't like insurance companies. At all. I know they're necessary but too many of them are in the business of leaving their insureds high-n-dry when the manure hits the fan & the chips are down. Their policies are laced with so many 'gotchas' that they make banks look good. As luck would have it, I married an insurance agent. Go figure.
And we are not insuring for health, we are insuring for nursing home care.
Very true. Have you considered the cost increase of nursing home care in the future in your computation? It's expensive now & I don't see it going down anytime soon no matter how much the Gov't might stick their nose in it.
I don't know...it doesn't seem like the math makes LTC insurance a good deal. And the 2-5 year restriction on collecting benefits means it is pretty useless for the feared 10-20 years in a nursing home that is often raised as a scare tactic.
I believe that is an insurance industry scare tactic too just to sell policies. As a rule of thumb though, many of these same people that do die a slow, horrible death in nursing homes for a couple of decades...excluding those with catastrophic illnesses...never took care of themselves during their lifetimes. They never dieted, exercised, or tended to their health while smoking two packs a day then woke up at 60 years old in a nursing home with no insurance, no money, & wondering how their family is gonna pay for it.