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re: Long term care insurnace policies
Posted on 1/19/24 at 1:48 pm to Shepherd88
Posted on 1/19/24 at 1:48 pm to Shepherd88
quote:
It’s about leverage and having access to a pile of money before I can accumulate that amount of money.
Ah yes, leverage. The ole I can loan money from myself arguments?
How do you have access to a pile of money before its grown to become a pile of money?
FWIW I'm not against any of these, I just have yet to see one argument where it makes any sort of sense to not self insure. Statistically speaking your chances of a stay in LTC if you are married and/ or have children for over a year is very low. As in, likely not to be expensive.
1
Posted on 1/19/24 at 2:02 pm to baldona
No dude I’m not talking about cash value loans.. let’s say I have a $500k G-VUL policy with a chronic care rider and my premium is $12k per year.
Say on year 5, I’ve put $60k into the policy in premiums and now I go on claim. I can now access up to 4% of the death benefit of $500k (so $20k/mo) for LTC purposes. That’s a lot to access even in today’s terms but that would last 2.5 years before the policy exhausts itself.
But say I pass away on year 3 having drawn out only 2%/mo or $10k/mo for a total of $300k (this is more realistic terms). There’s still a $200k life insurance death benefit left over.. and I only put $60k into the policy. Again there’s are hypotheticals but you can see how the insurance works.
Edit: on top of that, a lot of these policies, Prudential specifically has their chronic rider as an indemnity rider. Meaning if I go on claim then I can use that money for whatever I want, it doesn’t have to “reimburse” the healthcare provider.
Say on year 5, I’ve put $60k into the policy in premiums and now I go on claim. I can now access up to 4% of the death benefit of $500k (so $20k/mo) for LTC purposes. That’s a lot to access even in today’s terms but that would last 2.5 years before the policy exhausts itself.
But say I pass away on year 3 having drawn out only 2%/mo or $10k/mo for a total of $300k (this is more realistic terms). There’s still a $200k life insurance death benefit left over.. and I only put $60k into the policy. Again there’s are hypotheticals but you can see how the insurance works.
Edit: on top of that, a lot of these policies, Prudential specifically has their chronic rider as an indemnity rider. Meaning if I go on claim then I can use that money for whatever I want, it doesn’t have to “reimburse” the healthcare provider.
This post was edited on 1/19/24 at 2:12 pm
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