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Started By
Message
re: Long Term Care
Posted on 9/30/12 at 3:57 pm to GoCrazyAuburn
Posted on 9/30/12 at 3:57 pm to GoCrazyAuburn
Reading through my benefits statement, it looks like Long Term Disability is already provided with premiums paid by my company. It's amazing that I didn't even know this until I did some more digging and read the SPD.
Elimination Period: 180 days
Monthly Benefit: 60% of base monthly earnings to a maximum of $15,000/month (reduced by other deductible sources of income and disability earnings)
Maximum Period of Payment: Social Security Normal Retirement Age (67 years old in my case)
This sounds sufficient to me (~$7800/month benefit if disabled) and should also cover long term care, I think? Is there any reason for me to consider additional coverage?
Elimination Period: 180 days
Monthly Benefit: 60% of base monthly earnings to a maximum of $15,000/month (reduced by other deductible sources of income and disability earnings)
Maximum Period of Payment: Social Security Normal Retirement Age (67 years old in my case)
This sounds sufficient to me (~$7800/month benefit if disabled) and should also cover long term care, I think? Is there any reason for me to consider additional coverage?
1
Posted on 9/30/12 at 4:42 pm to Bayou Tiger
If it is paid by your employer, that 60% is taxable to you. Also, LTD and LTC are very different things. Ltd doesn't cover LTC, it just protects lost income.
This post was edited on 9/30/12 at 4:49 pm
Posted on 10/1/12 at 9:11 am to GoCrazyAuburn
gocrazy auburn,
where do u ive?
where do u ive?
Posted on 10/1/12 at 11:03 am to cbtullis
Bham. Why?
Posted on 10/1/12 at 11:04 am to tirebiter
Also, haven't forgotten about your link. Just haven't had enough time to really analyze it yet.
Posted on 10/1/12 at 8:47 pm to GoCrazyAuburn
No thanks on the LTC insurance for me. If I ever need long term care,I would rather be dead. I don`t want to drag out my death any longer than necessary.
Posted on 10/1/12 at 11:21 pm to TIGER2
quote:
No thanks on the LTC insurance for me. If I ever need long term care,I would rather be dead. I don`t want to drag out my death any longer than necessary.
Interesting. I wish I could control the quality of my life. 25-30 years from now, we probably can call the shots. I would rather die than be a burden on my only child. I don't feel like I have to "fully" insure, I'm just going to do the "something is better than nothing" approach, considering the chance that I won't use it for more than 6 months (maybe?)
Posted on 10/10/12 at 2:46 pm to DanglingFury
WSJ LTC
The Long-term Care Insurance Gamble
Link in article to study on the LTC market.
The Long-term Care Insurance Gamble
quote:
Researchers have identified long-term care as “one of the largest uninsured financial risks facing the elderly in the United States.” Yet only 10 percent of people over age 60 were covered in 2000 – surely, some of the 90 percent simply couldn’t figure out what to do.
Here’s why it’s so difficult to decide whether to buy long-term care coverage: There are so many unknowns. What’s the long-term care insurance you’re paying for now going to buy you in the future? If you do need it, how long will you need it and at what age? Will the premiums go up so much you’ll be forced to drop the policy?
Premiums are already going up – between 6 percent and 17 percent last year, according to the American Association for Long-Term Care Insurance, a trade group for insurance agents. Prudential and MetLife are among 11 of the top 20 insurers that have stopped selling individual long-term care policies in the past five years, according to the trade organization, Limra. Others are paring back products: Genworth, for example, is suspending sales of lifetime policies and will instead offer long-term care policies with 10-year limits on benefits.
For middle-income Americans, good reasons to get long-term care coverage may include preserving your hard-earned savings to bequeath to your child, niece, or the spouse who may out-live you. People without children may have more need for coverage than do parents who may move in with their offspring; on the other hand, a single person is free to sell the house to pay for assisted living since there’s no spouse remaining at home.
Link in article to study on the LTC market.
Posted on 10/10/12 at 6:53 pm to tirebiter
thanks for the articles. Unfortunately, the vast majority of the LTC players grossly underpriced their products when they first came out, to try and gain market share. That is why so many have had to either drop out of the market, or greatly increase their premium rates.
Looking at that 25 page document on the last page, there are still some issues with that study. Mainly how old some of the data is. Furthermore, I still haven't seen it talk anything about assisted living facilities or home nursing care. It is a good read, however unless I am reading the graph wrong on the 2nd or so page, does it not say the average stay back then was 1.8 years and 2.7 years within the few studies done?
This post was edited on 10/10/12 at 10:43 pm
Posted on 10/10/12 at 9:37 pm to GoCrazyAuburn
We might as well hash out the differences between traditional LTC insurance and life insurance with LTC riders in this thread.
From what I can tell, traditional LTC insurance:
Pay a premium, insurance pays benefit when you fail at some activities of daily living. You can add an inflation factor so your benefit increases over time to account for rising health care costs Ex). A policy that pays $150 per day in today's dollars will pay $450/day 15 years from now. You lose it if you don't use it.
Life insurance with LTC rider: you deposit a lump sum and if you need it for LTC then it pays 5 times or less of what you deposit for your care. You always have access to your deposit but you don't earn interest on it. If you die, you get a little more than your deposit as a death benefit if you don't use it for LTC. Usually can't account for inflation with these but if you don't use it for LTC, you don't lose it. In that case, you do lose out on potential investment earnings.
What would you rather?
From what I can tell, traditional LTC insurance:
Pay a premium, insurance pays benefit when you fail at some activities of daily living. You can add an inflation factor so your benefit increases over time to account for rising health care costs Ex). A policy that pays $150 per day in today's dollars will pay $450/day 15 years from now. You lose it if you don't use it.
Life insurance with LTC rider: you deposit a lump sum and if you need it for LTC then it pays 5 times or less of what you deposit for your care. You always have access to your deposit but you don't earn interest on it. If you die, you get a little more than your deposit as a death benefit if you don't use it for LTC. Usually can't account for inflation with these but if you don't use it for LTC, you don't lose it. In that case, you do lose out on potential investment earnings.
What would you rather?
Posted on 10/10/12 at 9:56 pm to Breadcrumbs
very good point.
That is a situation that would be different for each individual and their financial state. Myself personally, I would go with the traditional LTC policy because it does have the inflationary protection (LTC costs are going to be going up drastically for years to come), as well as a lot of other benefits as it is designed to truly help with a LTC claim. The Life Insurance w/ Rider is really there to help provide just a supplemental amount of funds if somebody doesn't want to fully self-insure (thats how I see it anyhow).
Furthermore, the potential discounts involved if you and your spouse purchase policies (usually 30%), as well as different tax deductions applicable to different people are very advantageous. If you are an S-Corp owner, you get ridiculous amounts of deductions & tax benefits. You can pay premiums through the business, deduct the full premium for you and spouse (if married), then exempt a certain amount of the premium as well off of your personal income tax. I just did a case for a 53 year old, and he could write off $1310 from his and his wife's personal income taxes, after deducting the full premiums as a business expense.
Also, traditional LTC policies can have Survivorship benefits (if you or spouse die, the survivor's policy is paid up) and Non-Forfeiture benefit a few companies have (you can stop paying and money sits in an account that grows with inflation waiting on claim).
Some of the Life Insurance w/ LTC riders i have seen have had some limitations on what the money can be used for (one I saw was just Nursing Home). That I especially don't like.
Just my two cents
That is a situation that would be different for each individual and their financial state. Myself personally, I would go with the traditional LTC policy because it does have the inflationary protection (LTC costs are going to be going up drastically for years to come), as well as a lot of other benefits as it is designed to truly help with a LTC claim. The Life Insurance w/ Rider is really there to help provide just a supplemental amount of funds if somebody doesn't want to fully self-insure (thats how I see it anyhow).
Furthermore, the potential discounts involved if you and your spouse purchase policies (usually 30%), as well as different tax deductions applicable to different people are very advantageous. If you are an S-Corp owner, you get ridiculous amounts of deductions & tax benefits. You can pay premiums through the business, deduct the full premium for you and spouse (if married), then exempt a certain amount of the premium as well off of your personal income tax. I just did a case for a 53 year old, and he could write off $1310 from his and his wife's personal income taxes, after deducting the full premiums as a business expense.
Also, traditional LTC policies can have Survivorship benefits (if you or spouse die, the survivor's policy is paid up) and Non-Forfeiture benefit a few companies have (you can stop paying and money sits in an account that grows with inflation waiting on claim).
Some of the Life Insurance w/ LTC riders i have seen have had some limitations on what the money can be used for (one I saw was just Nursing Home). That I especially don't like.
Just my two cents
This post was edited on 10/10/12 at 9:59 pm
Posted on 10/10/12 at 10:20 pm to GoCrazyAuburn
quote:Out of curiosity, are there any crazy types of insurance that you sell, just because the market demands it?
GoCrazyAuburn
Examples may include Alien Abduction Insurance, Spooksafe Insurance, Fantasy Football Insurance, Paternity Insurance, Magician's Insurance, Robot Insurance, Dog Bite Insurance, Pirate Insurance, etc
(FYI I did not make up any of those examples)
Posted on 10/10/12 at 10:21 pm to GoCrazyAuburn
Thanks. So what is your version of a middle of the road (not Cadillac policy)? I think I saw you prefer traditional policy paying between $3-5,000 per month plus inflation for 3-5 years. What age to buy? Should someone with less than $1 mil saved pay about $5000/yr premium for 2 or less than that? What percent of annual budget should the premium be?
Posted on 10/10/12 at 10:34 pm to Breadcrumbs
Well, depending on age and financial situation, the answer to that questions is vastly different.
I would focus first and foremost on figuring out the amount of coverage you desire. Generally when I show a 50-60 or so age person. I'll show them what a $6,000 Monthly Limit policy is and a $4,500 monthly limit policy, both for 6 year benefits. (If they don't use the maximum each month, the benefits will last longer than 6 years or whatever the policy states). I have also sold policies to people in their mid 40's. I always include Non-forfeiture benefit & inflation protection. The client will have to force me to take those off
I would say that $5,000 number you gave for two is definitely a good place to work from (depending on your age and situation), if it is a doable amount. Unfortunately, LTC premiums get expensive real fast if you wait too long. There is a such a high demand for care, that costs are increasing at rapid rates.
The hardest thing about discussing LTC here, is that there is so much uncertainty and variables with the the market itself. When/if will I need the policy? How long will I need care? How much will it cost?
That is why is it is really hard to give specific recommendations on here, without really getting into the acute details of a situation. However, hopefully this has helped a bit. If not, i'll try and get a little more detailed if I can.
I would focus first and foremost on figuring out the amount of coverage you desire. Generally when I show a 50-60 or so age person. I'll show them what a $6,000 Monthly Limit policy is and a $4,500 monthly limit policy, both for 6 year benefits. (If they don't use the maximum each month, the benefits will last longer than 6 years or whatever the policy states). I have also sold policies to people in their mid 40's. I always include Non-forfeiture benefit & inflation protection. The client will have to force me to take those off
I would say that $5,000 number you gave for two is definitely a good place to work from (depending on your age and situation), if it is a doable amount. Unfortunately, LTC premiums get expensive real fast if you wait too long. There is a such a high demand for care, that costs are increasing at rapid rates.
The hardest thing about discussing LTC here, is that there is so much uncertainty and variables with the the market itself. When/if will I need the policy? How long will I need care? How much will it cost?
That is why is it is really hard to give specific recommendations on here, without really getting into the acute details of a situation. However, hopefully this has helped a bit. If not, i'll try and get a little more detailed if I can.
This post was edited on 10/10/12 at 10:36 pm
Posted on 10/10/12 at 10:39 pm to Bayou Tiger
quote:
Bayou Tiger
No, I don't get into any of that. I'll do some health insurance every once in a while, but that is as wild as I get. As far as the insurance side of planning goes, I focus on Life, Disability, and LTC for individuals and businesses. Then, of course, there is the offensive side of things as well.
Now, if you want some pirate insurance, i'm sure I can find a guy... just send me your email and we can get together
Posted on 10/12/12 at 11:52 am to GoCrazyAuburn
My wife and I have LTC with Farm Bureau. My mother in law had Alzheimers for 11 years and I watched her disease drain every penny that they saved all of their lives.
Posted on 10/14/12 at 10:35 pm to Nissanmaxima
I bought LTC through Northwestern in my 40's at a premium of roughly $1,000 a year. A decade later I was diagnosed with a terminal illness with a 3-5 year life expectancy. I am in year 3 and am disabled and have nurses aids and caregivers that come to my house. My policy pays roughly $200 a day for such services. This buys me roughly 10 hours a day of such services. This means my wife and family don't have to be burdened with my care all day. This is extremely important to me. I do not anticipate going into a nursing home type facility and think I will end my days at home. I also have a LTD policy from my former employer that protects 60% of my income. Did I ever think I would need these type of policies? No, I had no history of anything like this in my family. But, both of these policies have been instrumental in keeping my family's finances in a fairly stable position. They were insurance against a catastrophe , and I experienced one. If you can afford it, I would highly recommend LTC and LTD policies. Catastrophes happen and LTC and LTD policies can be instrumental in determining whether one catastrophe is contained , or whether (without these policies) multiple financial catastrophes ensue. I'm glad I have these policies. Life can be tough, do things if you can , that can make life easier for you and your loved ones during the toughest of times. To those posters who have said they would rather die than be in a position where you have to use LTC; you might be surprised if you are in that situation how precious every day is and how thankful you will be for each extra minute you have to spend with your kids and family. Life is truly to be cherished as it is a gift.
This post was edited on 10/14/12 at 10:46 pm
Posted on 10/15/12 at 10:14 am to tiger7882
Sorry to hear what you are enduring at an early age and wish you the best of luck. You're fortunate in that you planned well and have good coverage that is alleviating stress on you and your family. I was diagnosed with cancer in April this year @ 48, and yes, it can be shocking with no symptoms and makes one reevaluate things. No guarantees in life, that is a certainty.
Posted on 10/15/12 at 10:31 am to tiger7882
Sorry to hear that. I'm glad to hear however your planning has served you well.
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