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GoCrazyAuburn 
Auburn Fan
Member since Feb 2010
9069 posts
| Long Term Care (Posted on 5/11/12 at 4:28 pm)
Curious to the Money Talk board's position on LTC. Don't see it discussed here, really ever. Possibly because it's a relatively young community on here. Regardless, it's a very interesting topic that is going to becoming very prevelent in the next few years, especially with the new laws allowing 1035 funds to pay for it.
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Poodlebrain 
LSU Fan
Way Right of Rex
Member since Jan 2004
12685 posts
| re: Long Term Care (Posted on 5/11/12 at 5:09 pm to GoCrazyAuburn)
When I advise clients regarding LTC planning it is pretty evident to them that LTC insurance makes good financial sense. It is not difficult to illistrate that if LTC is required, then your LTC insurance benefits plus retirement income minus your LTC costs will be greater than retirement income without LTC benefits minus LTC costs. And the likelihood of an individual requiring LTC is rising with developments in health care and evolution of families.
Converting a life insurance policy to LTC insurance will change the equations I use for illustrations. The conversions may allow people to get out of life insurance policies that had horrible returns on investment and into something with the potential to be much more beneficial. It is an avenue that will make a lot of sense for those who were late to the game in purchasing LTC insurance and now face higher premium costs.
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Bigsike
Nicholls St. Fan
Member since Jan 2009
1332 posts
| re: Long Term Care (Posted on 5/11/12 at 5:13 pm to GoCrazyAuburn)
LINK
Long Term Care can be very expensive.
My wife had a fairly well off grandma. After many years of assisted living upon her death she had barely any assets left.
I don't currently have LTC insurance but I plan on getting some as soon as I move some of my investments around.
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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
9069 posts
| re: Long Term Care (Posted on 5/11/12 at 5:42 pm to Poodlebrain)
haha, I probably should have worded my post better. I know all about LTC and work in Financial services. What's the most recent statistic, 52% or so are going to need LTC in their life? I don't see why you would convert your entire Life policy, unless it is just complete garbage and won't last. Just 1035 cash each year to pay premiums.
I was more curious from the rest of the crowd that doesn't work in insurance.
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greenhead11
LSU Fan
Member since Feb 2012
608 posts
| re: Long Term Care (Posted on 5/11/12 at 10:00 pm to GoCrazyAuburn)
LTC, as any insurance is a gamble. I'm convinced that it is the right measure to ensure your financial security and the health of your relationships with your family. From personal experience it has been very difficult to have (for me a grandparent) live with my parents and I during high school.
My grand pa is 104 and did well in his life but is now reliant on my parents as he ran out of reserves. But who plans to live that long (especially back then). Now he receives a good pensions for 1970 standards when he retired from IP (who is just waiting on him to pass after paying for 40 years) and that helps pay for his care. But its a drop in the bucket to total monthly costs. I've seen the toll it's had on my parents as they refuse to accept mediocre care for a family member, and thus are withdrawing from their savings.
Especially if you get a policy at a young age and are relatively healthy it makes sense for at least you or your spouse to have one.
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TortiousTiger
Baton Rouge
Member since Jan 2007
12658 posts
| re: Long Term Care (Posted on 5/11/12 at 10:36 pm to greenhead11)
quote:
I've seen the toll it's had on my parents as they refuse to accept mediocre care for a family member, and thus are withdrawing from their savings.
that's just dumb.
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lsufan1971
LSU Fan
Zachary
Member since Nov 2003
1938 posts
| re: Long Term Care (Posted on 5/12/12 at 4:54 am to TortiousTiger)
My mom was diagnosed with early onset Alzheimer's at 54. She is now 59 and in a Nursing home. It cost $3900 a month. LTC is very expensive. This doesn't cover medical expenses either. Most people in LtC are in Medicad so the family doesn't realize the cost.
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Janky
LSU Fan
Team Primo
Member since Jun 2011
2514 posts
 Online
| re: Long Term Care (Posted on 5/12/12 at 6:56 am to lsufan1971)
I don't like the traditional LTC polices. I almost always use the hybrid life policy with LTC. That way if they need it, it is there but if they don't their heirs get a leveraged payout in the form of a death benefit.
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Ric Flair
LSU Fan
Charlotte
Member since Oct 2005
6349 posts
| re: Long Term Care (Posted on 5/12/12 at 1:06 pm to GoCrazyAuburn)
For me, I only insure against catastrophic situations (early death before age 65, long term disability). LTC will not bankrupt you. It could make you broke and dependent on Medicare, but you won't go in debt. I view it as insurance your kids will want to to have, but it is not necessary.
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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
9069 posts
| re: Long Term Care (Posted on 5/12/12 at 1:32 pm to Ric Flair)
quote:
LTC will not bankrupt you. It could make you broke and dependent on Medicare, but you won't go in debt.
You realize Medicare doesn't provides for LTC right, just nursing home? Once you've run down those assets to make you broke, you will more than likely have to rely on Medicaid, which is even worse. I guess you have never known somebody that needed LTC.
Could you afford $4500-$6000 a month for 3-5 years with no income coming in except for retirement income?
Do you have home and car insurance? Why? The likelihood of needing them is drastically smaller than needing LTC (I realize buying LTC when you aren't even close to retirement is foolish).
I guess I just don't understand how it's not considered a catastrophic event.
This post was edited on 5/12 at 1:59 pm
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Bayou Tiger
LSU Fan
The Woodlands, TX
Member since Nov 2003
2938 posts
| re: Long Term Care (Posted on 9/26/12 at 9:11 pm to GoCrazyAuburn)
I've just been researching the Long Term Care/Disability, and I'm on the fence. The following article hits some of the pros and cons: WSJ Articlequote:
It may be more useful to learn that 67% to 70% of seniors who do go into a nursing home are discharged within 90 days, and that after two years, less than 6% of those admitted will still be there. Actually, out of 40 million American seniors alive today, approximately 1.5 million currently live in nursing homes, about 3.7%.
quote:
Another important point: Most long-term-care policies don't pay anything until the person has been in a nursing home for more than 90 days. If more than two-thirds of those going into nursing homes leave before 90 days are up, it is unlikely that most consumers will receive any benefits at all.
Also, what is the maximum lifetime benefit (time or money) that these policies cover? That would definitely make a difference. Overall, I am leaning towards not purchasing it.
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JWS3 
Purdue Fan
Baton Rouge
Member since Jun 2008
2502 posts
| re: Long Term Care (Posted on 9/27/12 at 1:14 am to Bayou Tiger)
quote:
Also, what is the maximum lifetime benefit (time or money) that these policies cover? That would definitely make a difference. Overall, I am leaning towards not purchasing it.
If you are incapable of caring for yourself medicare only covers one option, the nursing home, with LTC coverage, you can have in home nursing care, assisted living residences, 24/7 sitters in your home etc.
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tigeryat
LSU Fan
God's Country
Member since Oct 2005
2399 posts
| re: Long Term Care (Posted on 9/27/12 at 7:10 am to GoCrazyAuburn)
Screw that!
The government is going to take care of us cradle to grave. Why would I want to pay a LTC premium? I'm going with the 54% of the population.
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tigerrocket
LSU Fan
Member since Aug 2008
59 posts
| re: Long Term Care (Posted on 9/27/12 at 7:48 am to GoCrazyAuburn)
I think the more important discussion is whether or not you have a long-term care plan. LTC insurance is just one way to fund it. Some people have enough assets to pay for it out of pocket (self insured), and that can be their LTC plan. Others may use life insurance that has a LTC rider. Some people will choose to take the risk on their own, and they need to know the consequences.
Just have a LTC plan and know how it will work. Run the numbers.
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LSUAfro
LSU Fan
Baton Rouge
Member since Aug 2005
8595 posts
Online
| re: Long Term Care (Posted on 9/27/12 at 7:52 am to GoCrazyAuburn)
I've seen what can happen to an individual's life savings in only a few years. It may pay off and it may not, but I got my mom, step-mom, and my aunts all carrying it now(the men don't last in my family). I did quite a bit of digging around, and really found it to be something I thought was a good purchase.
I don't want my parent's living with me(even though I love them very much  ), and I don't want them in a run down nursing home because they went broke, or I went broke.
With their coverage they also have the option to have in-home care, so if they want to spend their last days in the comforts of their own home, they can.
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tirebiter
LSU Fan
ATL
Member since Oct 2006
4459 posts
| re: Long Term Care (Posted on 9/27/12 at 10:08 am to GoCrazyAuburn)
quote:
Could you afford $4500-$6000 a month for 3-5 years with no income coming in except for retirement income?
You are being disingenuous given that most that end up in LTC environment rarely stay more than 6-months. There is no guarantee that people that opt to buy LTC policies now will be able to afford the premiums up to the point that the policy is needed. If one bought a policy 8-10 yrs ago they got a good deal, enough so that many companies writing policies have exited the business and new policies can have significant premium increases.
Those who have little in the way of assets have no means to pay LTC, those say at $1.5-3M can likely afford a policy but may have no need, those with greater assets can self insure.
Like an earlier poster I had a family member that had a LTC policy and suffered from early ALZ. The facility close to home did not provide quality care, so she was brought back home to live at which point LTC refused to pay, although the cost of care was less expensive and higher quality, and cost was paid out of pocket. Some may think that is a stupid economic decision, but a lot more goes into decision making at that point than merely $'s.
My FIL had a LTC policy which he paid for years, suffered acute leukemia and did not make it out of the hospital and did not spend one day in a LTC facility, and, knowing him, was probably pissed he wasted his money. Alternatively, some people may choose to take matters into their own hands when threatened to be taken from their own homes.
LTC is a crap shoot, that is what it is.
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tirebiter
LSU Fan
ATL
Member since Oct 2006
4459 posts
| re: Long Term Care (Posted on 9/27/12 at 10:15 am to GoCrazyAuburn)
quote:
Do you have home and car insurance? Why? The likelihood of needing them is drastically smaller than needing LTC (I realize buying LTC when you aren't even close to retirement is foolish).
Because those that don't live in hurricane areas are able to purchase HO insurance at very low cost to protect what may be their largest asset which they can't afford to take a hit on nor replace out of pocket (and, if they have a mortgage coverage is mandated), and most people with assets buy vehicle insurance for the liability coverage, not replacement of the vehicle.
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tigeryat
LSU Fan
God's Country
Member since Oct 2005
2399 posts
| re: Long Term Care (Posted on 9/27/12 at 12:24 pm to greenhead11)
quote:
My grand pa is 104
A LTC Policy may have saved your grandfather some assets, it probably would have maxed out a decade ago, and he would still be dependent on his family.
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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
9069 posts
| re: Long Term Care (Posted on 9/27/12 at 12:56 pm to tirebiter)
quote:
You are being disingenuous given that most that end up in LTC environment rarely stay more than 6-months
Alabama average is 3 years. quote:
Like an earlier poster I had a family member that had a LTC policy and suffered from early ALZ. The facility close to home did not provide quality care, so she was brought back home to live at which point LTC refused to pay, although the cost of care was less expensive and higher quality, and cost was paid out of pocket. Some may think that is a stupid economic decision, but a lot more goes into decision making at that point than merely $'s.
Sounds like a bad policy then. I know plenty that cover home healthcare plus caregiver training. Sorry to hear that though. Like all insurance, there are crap products out there.
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GoCrazyAuburn
Auburn Fan
Member since Feb 2010
9069 posts
| re: Long Term Care (Posted on 9/27/12 at 12:59 pm to tigeryat)
quote:
A LTC Policy may have saved your grandfather some assets, it probably would have maxed out a decade ago, and he would still be dependent on his family.
Up until a few months ago there are plenty of good policies that have lifetime and unlimited benefits.
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