What's the consensus on LTC insurance?

[TexasHusker]

I am 50. My wife is 47.

My dad is in Assisted Living with Alzheimer's. His total monthly expenses are about $7K a month (I pay sitters to come and visit with him to the tune of about $3K a month) His LTC policy pays about $3500 per month, and pension and SS pay another $4000 or so.

So...he's somewhat set for two more years until his LTC policy runs out. Then we have a shortfall. I've got plans for that in the works, but my goodness the LTC insurance has been a blessing.

Today, we got a quote of $300 a month for a middle-of-the-road policy for both me and my wife. While it may be that we are fabulously wealthy at age 70 and it was the dumbest thing we ever bought, it also may be that we really need the benefit.

I suppose we could wait a few more years to buy this stuff (it gets more $$ expensive as you get older), but I'm kind of considering finding the money in our budget to buy it. The premiums are fully tax deductible as a business expense, which knocks the net down to around $220 a month.

Who wants to leave a mountain of ongoing health / home care expenses for their kiddos?

Am I on the wrong track here?

[scfr]

I am 50. My wife is 47.

Today, we got a quote of $300 a month for a middle-of-the-road policy for both me and my wife.

The premiums are fully tax deductible as a business expense, which knocks the net down to around $220 a month.

How is the premium fully deductible? I'm seeing max $730/year/person for the ages you mentioned. https://www.irs.gov/publications/p535/ch06.html

[creditcardfree]

I think if you can afford it now, that it would be very wise and appreciated by either one of you if needed for the other.

[TexasHusker]

How is the premium fully deductible? I'm seeing max $730/year/person for the ages you mentioned. https://www.irs.gov/publications/p535/ch06.html

I'm just going on what the salesman said

[greenskeeper]

buy it while you can. Healthcare as you age can be crippling, I deal with this everyday. "It pays to be healthy"

[QuarterMillionMan]

I have Genworth LTC, it gives me peace of mind to have it and I can afford it (thankfully) so I gladly pay the premiums every year of $1250 since I got it at age 45, now I'm 51. I will have to search through my files for pics of premiums and as soon as I locate it I'll post it here.

Photobucket's system is down.

[Outdoorsygal]

I am planning on buying it when I turn 54 years old. Right now I have it but thru our company who pays 90% of the premium. So it's very cheap at the moment.

It will be supplemental to the completely free healthcare we will be getting at age 65. Actually it will be first payer if we need LTC.

We will buy LTC insurance in 5 years after my 401k Is built up to 100K and I quit my job to go into fixing up houses for a living though we've already gotten our feet wet a little.
But it is first payer, so at least the taxpayers won't be funding the majority of the costs for our healthcare.

If it goes as planned which I see lots of cushion so that shouldn't be an issue. The LTC in my opinion is a gamble. After you re-search it, you see it is only good for a few years because it can expire and of course, if you are actually using it, the premiums will become so sky high or you'll just be booted off. Still, LTC is an integral part of our plan no matter what.

I say go for it because of your father, you are more educated on this topic than 90% of us here

[Fishindude77]

You know how insurance works. They are betting that they will get more $$ out of you and the rest of their insured pool, than you will get out of them. $300 a month for next 20 years = $72K, not a huge financial burden if it gives you peace of mind.

Personally, I'm not a huge fan of insurance and will use our net worth to insure for that sort of thing. If we get to the point of needing LTC insurance, it's not like we will have much use for our accumulated money, real estate, etc. anyway.

[Captain Save]

it's a tough decision to make, You'd need to have a plan with your kids involved. If you don't see the money going anywhere else.. then that's fine. But remember the reason you're saving for retirement is to spend it on things like this.. and if you're doing a great job with retirement , it is probably a good decision.

If you are worried about paying for something that you probably won't need.. you can go with the Asset based hybrid LTC.. they do it with annuities but ideally the best case is a single premium life insurance policy ..

an example is
you pay the insurance company $100k... your death benefit is about $200k ..
you have an LTC rider that will pay you if you need LTC. the total LTC amount is usually higher than the death benefit but there are maximum monthly and annual payout.

As far as that $100k that you're paying them,
- you can access via withdrawal or loan (that will decrease your face amount and your LTC benefit) ...
- you can also cancel the policy and get your $100k back (with a Return of premium rider)

if you need LTC .. you will get the benefit, more than you put .. the younger you are the higher the benefit per $1
if you die without needing LTC .. your heirs will get a higher death benefit than what you put in.
It's not a great policy for growing cash because the ROP and the LTC rider is eating all the cash the company is insurance company is making.

withdrawals for LTC I believe is taxable because it's not considered life insurance policy as far as the IRS goes.

[QuarterMillionMan]

I have more images to post but photobucket is doing weird things.

[QuarterMillionMan]

This thread was started by none other than your's truly that contain specific premium amounts for myself when I was 45 yrs old, I'm 51 now.

http://www.savingadvice.com/forums/general-discussion/69998-what-age-should-one-get-ltc-insurance.html

[bennkar]

I know I am in the minority on this, but I am not getting LTC insurance. I looked into it, and given my health, the GF's health, how we take care of ourselves, our finances, general family health history, etc... etc... and then add in the various deductibles, limitations, etc... etc... I figure self insuring is better. As pointed out above, insurance companies do this to make money, as it mostly works out for them in the long run. If you need that peace of mind, then sure go for it. For me I will invest the premiums, and if I don't need it in the next 20 or so years I will most likely come out ahead. Even if I do need it, the money saved and invested will pay for months and months of care, so its not like I will lose out totally.

(PS: Yes, long ago I did take actuarial exams, never went all the way to be certified, but I do understand the odds and how to estimate them, so I am very much at peace with my choice.)

[MonkeyMama]

I know I am in the minority on this, but I am not getting LTC insurance.

Same Here.

LTC is VERY expensive, but the median stay in assisted living is less than two years. Between family history and personal experience, I don't see the point in buying insurance. I may be biased being in a family who can far out-save any LTC costs they have had (or could possibly have). & I deal with this all the time with elderly clients, but living in a high-cost region, even the non-savers can easily cover with the sale of their home.

I would certainly adjust for family history and individual situation.

[TexasHusker]

Same Here.

LTC is VERY expensive, but the median stay in assisted living is less than two years. Between family history and personal experience, I don't see the point in buying insurance. I may be biased being in a family who can far out-save any LTC insurance costs they have had (or could possibly have). & I deal with this all the time with elderly clients, but living in a high-cost region, even the non-savers can easily cover with the sale of their home.

I would certainly adjust for family history.

I was actually in this mode until my dad was diagnosed with Alzheimer's three years ago.

"Very expensive" is relative. I was pleasantly surprised that LTC insurance for both me and my wife is "only" around $300 per month. And watching my dad burn through $7K a month for the last 18 months has been quite an eye-opener too.

He has about a $230K estate. Were it not for the insurance, subtract about $67K from that, with who knows how many more years to go.

Daunting.

[bennkar]

I was actually in this mode until my dad was diagnosed with Alzheimer's three years ago.

"Very expensive" is relative. I was pleasantly surprised that LTC insurance for both me and my wife is "only" around $300 per month. And watching my dad burn through $7K a month for the last 18 months has been quite an eye-opener too.

He has about a $230K estate. Were it not for the insurance, subtract about $67K from that, with who knows how many more years to go.

Not to be critical, but the bolded above is one big reason I am not going with LTC insurance. Most plans seem to have a 3 year max in benefits. Since if you take the premiums and invest them you will come out ahead somewhere in the range of 1 year to 3 years of benefit usage. Go much over 3 years (say 5?) and most people will still be bankrupted anyway. And needing it over 5 years isn't unreasonable. Add in all the other problems (getting the insurance to actually agree LTC is needed, company could go bankrupt 20 years down the road, and so on....) and I am uber leery of getting LTC insurance.

Its strictly a comfort choice (based on your health and family health of course). It can benefit many people, but I'll be passing on it.