|
Post by smsmith on Sept 24, 2024 19:30:48 GMT -6
Given the site traffic here lately, I don't expect much but I'll throw it out there for discussion.
What are folks thoughts on LTC? I've eliminated purchasing an LTC insurance policy, but I am considering an LTC annuity. Seems like a person could buy an annuity for $100K, and get 2-3 times (depending on current health) that amount of coverage for LTC. The advantage of the annuity is that if the amount invested (in my example $100K) doesn't get used for LTC the heirs will inherit it. With traditional LTC policies you pay premiums (pretty high it seems) and if the policy goes unused...you or your heirs get nothing.
I was just on the Genworth site running various LTC costs. The closest site available to run numbers is St. Cloud. I was a bit surprised to learn the costs in St. Cloud are higher than in Madison, WI.
Seems common recommendations are to plan for 3 years of LTC costs (if they're needed). Highest level of care for this area was right around $160K annually in 2023, that'd be darn near $500K for 3 years of care in last year's dollars.
Downside to the annuity is that you've got a chunk of cash earning low interest rates (anywhere from sub 1% to around 4%) while if you left it alone it could be earning much more elsewhere.
A person can self insure if you're well off.
A person can get LTC for "free" if you exhaust your finances down to around $2K and get Medicaid.
From what I could find (from non-insurance policy selling sources) about 60% of people will not require LTC. Of the remaining 40%, most will require less than a year.
My folks both required more than 3 years of LTC, and my inlaws are well past the 3 year mark as well.
Anybody put much thought into the subject?
|
|
|
Post by Bwoods11 on Sept 24, 2024 20:34:07 GMT -6
We just dealt with LTC on my father in law. An annuity could be an option. I purchased a Life insurance policy with a Long Term Care rider. This should give me 3 years of Nursing home coverage if necessary. It’s not cheap, but I felt it was necessary.
My FIL cost was ($15k) a month, but he didn’t last long. So it was not a huge drain on cash . It’s a real shame how LTC devastates families.
|
|
|
Post by terrifictom on Sept 25, 2024 11:01:23 GMT -6
My wife and I both have LTC insurance. My wife worked for the school system in Wisconsin. She was able to get it for both of us thru WREA. It is not cheap but affordable.
|
|
|
Post by biglakebass on Sept 25, 2024 11:02:47 GMT -6
Just went over this with my CFP. When it was all said and done, I passed on getting LTC.
The cost was enormous and very limited benefits.
|
|
|
Post by smsmith on Sept 25, 2024 12:01:18 GMT -6
Just went over this with my CFP. When it was all said and done, I passed on getting LTC. The cost was enormous and very limited benefits. LTC costs are pretty crazy for something you may not use. An LTC annuity at least says your money gets used for its intended purpose or it gets passed to your heirs. The opportunity cost is what is keeping me from buying one right now. The other thing that keeps me from buying anything is my folks' experiences with their LTC policies. Dad's never paid a penny, even with a dementia diagnosis. Mom fought it all the way to the WI Insurance Commission...and lost. Mom's policy paid off and on, it was a constant fight. Even with Dr's writing up the necessary documentation every few months. The insurance company was always 6 months behind in paper work processing. Her policy did end up being beneficial, but it sure was a lot of work and frustration. If you don't have an advocate or full control of your cognitive skills you will likely get screwed. Your policy rates can also go up...even if your policy and agent say it won't happen. Insurance companies can lobby the state commission for such increases...and it happens. It seems LTC annuities are easier to get your money with the necessary documentation, but even they have plenty of "exclusionary factors" I'm leaning toward self insuring...but I hope like hell it doesn't bankrupt us.
|
|
|
Post by Sandbur on Sept 25, 2024 12:36:39 GMT -6
Just went over this with my CFP. When it was all said and done, I passed on getting LTC. The cost was enormous and very limited benefits. Our CFP suggested self insure. I have concerns like Stu.
|
|
|
Post by smsmith on Sept 26, 2024 11:45:31 GMT -6
Our CFP says to self insure also. He did say converting the cash value of my universal life policy to an LTC annuity would probably make more sense. If I take the cash value and go on a trip to Europe (not happening) it'd be a taxable event. If I convert it to an annuity its non taxable.
|
|
|
Post by Bwoods11 on Sept 26, 2024 14:12:13 GMT -6
I honestly think a politician should come up with a LTC plan . Maybe an idea would be to maximize the cap on LTC person at $250,000? That way families can plan for it, have the cap or gap paid for by insurance or by a set aside plan ?
It’s just a number, maybe it’s $500,000. The system now rewards those that have nothing, or spend down . That’s a poor strategy, but it’s reality on what is happening. You’re better off having either 0 left when you go in, or you probably need a large sum of money …. There is no in between!
|
|
|
Post by smsmith on Sept 26, 2024 14:36:39 GMT -6
What's really crazy is that the care you get for $8-20k a month sucks for the most part.
|
|
|
Post by nhmountains on Sept 28, 2024 4:48:54 GMT -6
Serious question. What did people in this country do before the long term care option came about? It seems like only 10-15% of Americans can afford it. I what happens to the other 85%?
We sat through a lengthy Amway type LTC presentation. It honestly felt like what happens at the funeral homes when they give the options on buying caskets for your loved ones. Do you buy the cheapest? Do you buy the mid range? Or do you splurge because you want the best casket available?
The financial advisor went through all of the long term care costs and the caveats. Then said how we could get there to reach a goal. It was going to cost about half our income over the next 5 years. I thanked him for being thorough but, told him we couldn’t afford it. I Thomas turned the tables and asked him what happens to the other 85% of Americans that are worse of than myself and what will happen to them? I said it was kind of scary. He didn’t have much of a reply. Our plan will be to invest as much as we can and see where it takes us down the road knowing that the eventual plan of the government will be to take 401k’s and other investments. The tide will turn that when when the current block of young Voters gain a majority over the older farts. Once they happens they will want to take what the smaller group of wealthier Americans have because they won’t have it. Remember the American dream was built based on each generation doing better than the previous generation. That’s kind of headed down the toilet with the Gen-X Millennials and the new Gen-Z offspring. The polls I’ve seen on the subject of being better off show my theory.
|
|
|
Post by Sandbur on Sept 28, 2024 5:57:02 GMT -6
Serious question. What did people in this country do before the long term care option came about? It seems like only 10-15% of Americans can afford it. I what happens to the other 85%? We sat through a lengthy Amway type LTC presentation. It honestly felt like what happens at the funeral homes when they give the options on buying caskets for your loved ones. Do you buy the cheapest? Do you buy the mid range? Or do you splurge because you want the best casket available? The financial advisor went through all of the long term care costs and the caveats. Then said how we could get there to reach a goal. It was going to cost about half our income over the next 5 years. I thanked him for being thorough but, told him we couldn’t afford it. I Thomas turned the tables and asked him what happens to the other 85% of Americans that are worse of than myself and what will happen to them? I said it was kind of scary. He didn’t have much of a reply. Our plan will be to invest as much as we can and see where it takes us down the road knowing that the eventual plan of the government will be to take 401k’s and other investments. The tide will turn that when when the current block of young Voters gain a majority over the older farts. Once they happens they will want to take what the smaller group of wealthier Americans have because they won’t have it. Remember the American dream was built based on each generation doing better than the previous generation. That’s kind of headed down the toilet with the Gen-X Millennials and the new Gen-Z offspring. The polls I’ve seen on the subject of being better off show my theory. LTC is insurance. I look at the mess we have in health insurance and am very skeptical of the whole thing. Companies can go bankrupt. As far as health care, procedures have a fee, but the fees are all over the place based on agreements between different insurance companies and providers. Now we have had the government step in to straighten it out. What a joke. Is the same BS in LTC? Signed, Old and Grumpy
|
|
|
Post by nhmountains on Sept 28, 2024 6:40:42 GMT -6
^^^^ I haven’t heard of anyone with LTC insurance getting taken care of without a fight. All the people that I’ve spoken with that have had relatives with it have been denied claims because they didn’t meet the insurance provider’s thresholds. You can appeal of course which some do and some don’t but, it’s not the bed of roses they sort of imply when push comes to shove. At least if you have the money invested in your control you may have a chance.
|
|
|
Post by smsmith on Sept 28, 2024 7:11:12 GMT -6
Insurance companies can also decide they are no longer going to offer certain products. AAA is no longer offering watercraft coverage. We had a policy with them for over a decade. "Poof" goes the coverage.
ETA...as far as what most do for LTC - I'd guess many folks rely on their children. I know that a great number of Hispanic and Asian families provide for their aging parents/grandparents. I'm pretty sure most white folks did the same thing until the relatively recent past. I still see a good number of homes around here with inlaw suites/separate living quarters.
|
|