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Long Term Care Insurance


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Every couple years during open enrollment my company offers long-term care and an agent comes out for a session if you want to hear. I've gone a couple times and what sounds like "just sign up" on the blurbs turns out to be much more complicated and with all sorts of restrictions. And it was much more expensive than it sounded like it would be. I lost interest and figured my family mostly drops dead one day, I'll probably be OK.

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In my experience i think i really lucked out.

I had previously paid into a Life Insurance product (that essentially acted like you were investing in a bond with a death benefit), but have decided without dependents no longer needed it. I was able to convert it tax free into a different Life Insurance product with a LTC "rider".

It's not cheap but a portion of the premium pays for a typical death benefit that is always good. A different portion get's invested that grows the Policy value and cash surrender value with market based returns. (So there is that risk but the policy is intended to be invested in for decades.)

The policy is very flexible in that you can also borrow against the cash surrender value and it's locked in at a very favorable rate. ( Part of the luck because i happened to get the policy when rates were rock bottom a few years ago), and you just pay it back to yourself.

If you happen to meet your maker the death benefit covers any outstanding loan amounts and the surplus balance goes to your designated beneficiary.

Also though let's say if we're lucky and healthy into our 70's and 80's you can opt to start withdrawing from it like any other brokerage account.

Or alternatively if you think at that time you might need it as monthly LTC insurance you can use it that way up to the maximum amount of the death benefit.

Again it is expensive but i look at the policy acts as a forced savings and investment account, which has the flexibitly to be used as a long-term retirement market based asset.

Or if I meet a really lucky sugar baby he can have a lot of fun at my expense and demise as a life insurance policy hahaha, or as I age can use it a quasi self-bank loan, and/or as nearing end of life could opt to use it strictly as a LTC insurance policy if needed.

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WIsh I could get it.   My grandmother was doing good financially on her own but when she had to go in a nursing home, it wiped her out in a few years.   I'm a type 1 diabetic and even though I don't smoke and take care of myself better than most non-diabetics insurance companies won't even consider covering me 

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My LTC insurance policy premiums have been increasing astronomically. I've had to limit coverage to 5 years to keep it affordable. I suppose LTC for over 5 years is pretty unlikely. 

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  • 3 weeks later...

The best form of LTC insurance is to take care of yourself and eat healthy when you're in your prime. A nursing home should be something you're actively trying to avoid in your old age.

It's possible that you may need a nurse to visit you at home a couple times a week or maybe even daily but that's something you can anticipate and invest for decades in advance.

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On 2/18/2023 at 8:47 PM, Quincy_7 said:

The best form of LTC insurance is to take care of yourself and eat healthy when you're in your prime. A nursing home should be something you're actively trying to avoid in your old age.

It's possible that you may need a nurse to visit you at home a couple times a week or maybe even daily but that's something you can anticipate and invest for decades in advance.

LOL, not all of us around here HAVE decades.

edit: wasn't trying to insult anyone else, but I just passed the same age at which one of my parents died of cancer and, weirdly, I had some basel cell removed this year.  Fate is pretty weird.  Luckily the other parent lived for another 20 years.

Edited by Jim_n_NYC
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22 hours ago, Quincy_7 said:

The best form of LTC insurance is to take care of yourself and eat healthy when you're in your prime. A nursing home should be something you're actively trying to avoid in your old age.

It's possible that you may need a nurse to visit you at home a couple times a week or maybe even daily but that's something you can anticipate and invest for decades in advance.

I can surmise that you've never had to take care of a parent or spouse who really required long-term care. A person can have dementia and really require someone to be present 24 hours due to behavioral issues such as sundowning. This is the most common, but certainly not the only condition which requires a caregiver be present almost all of the time. Other such conditions include hip fractures, visual loss, some strokes, Parkinsonism, Lewy Body Disease, ALS, and so on. 

Edited by Unicorn
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On 2/18/2023 at 8:47 PM, Quincy_7 said:

The best form of LTC insurance is to take care of yourself and eat healthy when you're in your prime. A nursing home should be something you're actively trying to avoid in your old age.

It's possible that you may need a nurse to visit you at home a couple times a week or maybe even daily but that's something you can anticipate and invest for decades in advance.

Nursing homes are FULL of old people who took care of themselves and now linger from dementia, Alzheimer's, and Parkinson's.  

I would gather that the ones who didn't take care of themselves, generally died quicker and earlier.  

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  • 6 months later...

According to this article, CA wants to waive asset verification for the Medicaid program (Medi-Cal), which apparently means no 5 year look back period or anything.   Nursing home care to be covered by Medicaid no matter what your assets are.  Wow.  This is going to be costly for the taxpayers.

 

Edited by augustus
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On 9/19/2023 at 5:13 AM, augustus said:

According to this article, CA wants to waive asset verification for the Medicaid program (Medi-Cal), which apparently means no 5 year look back period or anything.   Nursing home care to be covered by Medicaid no matter what your assets are.  Wow.  This is going to be costly for the taxpayers.

 

But this begs the question:  why would a wealthy Silicon Valley magnate settle for Medicaid-financed long-term care when they could afford to provide themselves mucn better long-tem care?  

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5 hours ago, Rudynate said:

But this begs the question:  why would a wealthy Silicon Valley magnate settle for Medicaid-financed long-term care when they could afford to provide themselves mucn better long-tem care?  

True.  But the majority of families have a few hundred thousand up to maybe a couple of million they get to keep now.  You know granny is gonna get dumped in a facility asap since the family gets to keep the money.   

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  • 1 month later...

I've looked at the eligibility criteria and to actually benefit from the policy you have to be in really bad shape in terms of not being able to perform the activities of daily living. We're talking not being able to make a bowel movement independently. Most old folks are not and will not be in that situation, and thankfully so. 

My view is that it's best to self-insure by investing. In addition to standard retirement money, have a separate bucket set aside for elder care. You likely won't need the money until your 70s or 80s so it should be 100% stocks and no bonds.

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14 hours ago, Quincy_7 said:

I've looked at the eligibility criteria and to actually benefit from the policy you have to be in really bad shape in terms of not being able to perform the activities of daily living. We're talking not being able to make a bowel movement independently. Most old folks are not and will not be in that situation, and thankfully so. 

My view is that it's best to self-insure by investing. In addition to standard retirement money, have a separate bucket set aside for elder care. You likely won't need the money until your 70s or 80s so it should be 100% stocks and no bonds.

And you often have to hire a lawyer to get the insurance company to pay benefits.  Hopefully we won't need long long term care.  Maybe a year or less.  

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My LTC plan: either I go to Thailand and hire staff to take care of me or I blow all my money and then get on Medicaid or I just blow my money in an orgy of debauchery and then end it on my own terms.

FYI - I am single and have no one; just first cousins whose kids I don’t know well.  So there will be no one who gives a damn about me. 

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  • 4 weeks later...
On 4/28/2022 at 7:01 PM, Luv2play said:

My brother and his wife bought long term care insurance in their 40's as he was self employed and she didn't work. They paid about $3000 per year in premiums.

Now he is 79 and she is 84 and has dementia. She went into a facility last summer that costs $9000 per month and the insurance pays half.

Whether it was worth it depends on how long she lives. Otherwise she is very healthy and could live another 5 years or more. She gets excellent care. Even has an exercise bike set up in her room. He gets to take her out to a restaurant or even home for a meal on her good days. Other days she's in a complete fog and doesn't recognize him.

In my case I have a great pension and that would cover me if I had to go into ltc. So I never bothered to buy a policy.

Here it is a year and a half later. My sister-in-law is now 86 and stays in her suite now full time except when she wanders at night, sometimes going into someone else’s room. She is living in a fog but is still relatively healthy and gets excellent care. My brother goes to see her most days.

He is 81 but not in great shape. Conceivably he could die before she does. I don’t think my nephew will go to see her in that case except occasionally. He has two teenagers in school, a working wife and lots of work on his hands bringing  in the bread..

Getting old with Alzeimers is one of the worst ways to go, not just for the victim but their family as well.

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On 10/26/2023 at 7:29 PM, BonVivant said:

or I blow all my money and then get on Medicaid 

You are correct. The average person spends 3 years in Assisted Living (which Medicaid does not cover) until going into a nursing home (which Medicaid DOES cover).  As I age my plan is to give my money away to family until I am left with $400k to cover Assisted Living.  Medicaid will kick in when I'm transitioning to a nursing home.  An irrevocable trust is also something to look at since a nursing home cannot touch those assets.  You just need a very trustworthy person to control the trust

Edited by sutherland
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On 4/28/2022 at 8:17 PM, jeezifonly said:

In America, long term skilled nursing works for two classes: the Uber-rich and the indigent.

I have been on my soap box regarding this for years.  Let's look at two guys in adjoining rooms at our local nursing home.  Guy #1 sacrificed for years to save money and leave if for his children -he has to deplete it all for nursing home costs. Guy #2 (who earned the same salary as Guy #1) squandered all his money recklessly and now has a net worth of $5 - taxpayer dollars pay for the nursing home.  Is that a fair system?

Edited by sutherland
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2 hours ago, sutherland said:

An irrevocable trust is also something to look at since a nursing home cannot touch those assets. 

An irrevocable trust is still subject to the 5-year lookback period.  Also, once the money is in such a trust you lose total control of it.  You can't get it back.

Edited by augustus
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On 11/19/2023 at 8:52 PM, augustus said:

subject to the 5-year lookback period

Are there solutions to the 5-year lookback period?  Let's say I withdraw my savings in cash and give it to my family in cash.  There is no paper trail between me and the recipients. If questions are asked from Medicaid staff about the withdrawn money I respond "I went to Las Vegas and I lost it on gambling and hookers".  How can they prove that is not true? and my family keeps the cash and I get Medicaid

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On 11/19/2023 at 8:48 PM, augustus said:

Once they get the money you won't ever see them again.  I've seen it over and over again.

I don't think that leaving money to family is a way to snare them into visiting you.  It sounds like an employer/employee relationship - "do xyz or you don't get paid".  My nephew and his family live in Great Britain and I don't expect him to come and visit me when I am 100 years old. The fact is I value my nephew a great deal and I want to give him this money as a gift.

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5 hours ago, sutherland said:

Are there solutions to the 5-year lookback period?  Let's say I withdraw my savings in cash and give it to my family in cash.  There is no paper trail between me and the recipients. If questions are asked from Medicaid staff about the withdrawn money I respond "I went to Las Vegas and I lost it on gambling and hookers".  How can they prove that is not true? and my family keeps the cash and I get Medicaid

They will know about your savings. They have access to IRS computers and the 1099's that financial institutions send out.  

There is no solution to the 5-year lookback period, except to give your money away and wait for 5 years to pass.

As far as blowing your money at casinos (they won't believe it), I guess they can't do anything except put you in the worst rated and cheapest facilities around.   

 

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