12 Replies Latest reply on Aug 30, 2010 4:53 PM by MyR Community Manager

    long term care insurance

    Galitz

      We are considering Long Term Care Indurance (LYCI). Does anyone have experience with this?

       

       

        • Re: long term care insurance
          julietta
          I am doing alot of research--this is really tough. I understand that there is also a way to do a asset protection trust or a medicaid qualifying trust so that you may not necessarily have to do the ltc to protect your assets--do alot of research--talk to a lawyer--trusts are tricky things--i do not understand them....but there are some avenues to protect your assets--namely a asset protection trust--in case you do not want to do ltc.  remember---whatever the agent says the average nursing home care is--they are lowballing it--in new york the average is $400 a day and the agent said it was in the 300's--also unless you want to spend thousands and thousands on a policy to get the max--you will chip in some of your money-- i would rather do the latter than spend 4-5000 a year on a policy--i am 61 and am probably choosing a decent policy--with the new york state partnership program--for roughlyt $2400--I am just betting betting betting and praying that I wont' ever need ltc...
            • Re: long term care insurance
              Galitz

              Long term care insurance

              thanks for you input. We did some serious research, talked to a lawyer and finantial advisor and decided to apply for the insurance..

              The NY partnership will protect our assets. We are 69 so it is costly.

                • Re: long term care insurance
                  julietta
                  Let's hope we never need it.
                    • Re: long term care insurance
                      jkom51

                      Just so you know, the 'asset split' for Medicaid is quite a low limit, somewhere around $112K liquid assets excluding the home. This may sound like a reasonable sum, but try living 25 yrs in retirement on 3% distributions from a $112K portfolio and Social Security! It would barely pay property taxes and utilities in ten years.

                      If you live in a low-cost area, this is certainly doable; I know someone who did it when her DH became suddenly disabled and she was forced to find a nursing home for him. But she was eventually forced to get a job, any job she could find, because it's pretty much subsistance level income.

                      If you can obtain LTC insurance in your 60's at any affordable premium you are fortunate. Many Boomers can't. I know two people in my family and a neighbor nearby who would love to get LTC insurance but all three are ineligible due to existing medical conditions. Their premiums would be so high it's not worth it.

                      We bought it in our late 40's, and so the premiums were very low. Even though there have been two class-level premium increases, (which we expected and will probably see a few more in the future), we can still easily afford policies for both of us. It gives us a financial backstop should anything happen to one of us.

                      There are many "gotcha's" to buying this complex insurance product, but the two most important are to purchase options for both home healthcare services (the fastest-growing segment of healthcare needs)  and compound inflation protection (NOT simple compounded). Makes a big, big difference to have these, even though they will double your premium rate. Without it, in 10 or 15 yrs when you may need it in your 80's, the policy will have such low limits as to be virtually worthless.

                        • Re: long term care insurance
                          julietta

                          Just so you know, the 'asset split' for Medicaid is quite a low limit, somewhere around $112K liquid assets excluding the home. This may sound like a reasonable sum, but try living 25 yrs in retirement on 3% distributions from a $112K portfolio and Social Security! It would barely pay property taxes and utilities in ten years.

                          Hi there and thanks,

                          Needless to say I hate all this. stuff not sure of what you are saying up here....does this it apply to NYS state Partnership--I get to protect my assets this way from Medicaid.with the PArtnership..this is all so complicated I hate it......then there is also that Total Asset Trust you can do to protect your assets--my head is swimming--I applied --I am 61--I was on the phone for an hour with hancock--I disclosed my bi-polar condition--I did not see why I should hide it since they are not going to pay for therapy which is how it is treated anyway--now I am sorry I was so honest....is it really that hard for us boomers to get it...my premium is coming to $2400 a year--compounded 5 %--with circa $230 in the nursing home and $115 home health care---I know this is not alot for home health care--but I do not want to spend $3000-$4000 a year on an insurance policy--I am optimistic that I am going to stay healthy......thanks for reading my note and let me know what you think 

                            • Re: long term care insurance
                              jkom51

                              Anyone who believes they can hide their assets from Medicaid by using an asset protection trust either has more money than they know what to do with, or doesn't understand how such trusts work.

                              This is an IRREVOCABLE trust - once the assets have been transferred to the trust, you have NO CONTROL over them. An independent trustee must be in charge of the trust. This involves the actual transfer of assets to the independent trustee who will independently manage and actually own the assets for the benefit of all beneficiaries.

                              A partnership LTC policy allows you to 'shield' your assets according to what  your state of domicile allows: see URL http://www.ncsl.org/default.aspx?tabid=14490 for a more complete explanation. 

                              In summary, the partnership program couples the purchase of long-term care insurance with eligibility for Medicaid coverage for LTC services.  With the purchase of a partnership policy, a consumer can become eligible for Medicaid coverage after using the insurance benefits without having to exhaust his or her own assets to qualify for such coverage. Assets equal to the amount expended by the insurance policy are not considered countable assets for purposes of Medicaid eligibility and are exempt from the Medicaid estate recovery provisions.  (One significant caveat:  Those with home equity exceeding $500,000 are not eligible for Medicaid even with a Partnership policy, although states may increase that ceiling to $750,000.) 

                              julietta, no one on the web should be advising you on your particular financial situation! To determine to what extent your LTC policy will affect your estate planning, you should find and hire, preferably by the hour, an independent CFP (Certified Financial Planner) or CPA with a Personal Financial Specialist (PFS) certification. You need someone with fiduciary duty to you, not the loose (and useless) suitability standard that non-certified financial advisors follow.

                              Bring all your financial information: legal, medical, financial - and have it analyzed. This will take some time/cost, but being penny-wise and pound-foolish about something as important as your future LTC scenarios will hurt no one but yourself.

                              You can Google for the Garrett Planning Network which is an association of independent CFPs who work hourly with clients. Although TIAA-CREF offers CFP help, I don't believe they will produce a custom financial plan and analyze future needs, which is what you need to have.

                              I'm glad you think you are going to stay healthy. But that is not a determination over which any of us have a lot of control. Jim Fixx, the man who did more to get American off their couches and into running shoes, died at age 52 from cardiac arrest while out jogging.

                              LTC insurance is not cheap. You can do an analysis of whether the cost of risk mitigation (which is what insurance is) is worth the after-tax outflow of funds, or you can have someone else to do it for you. Either way, it is a decision only you can make. A good fiduciary advisor can help clarify the details, but the decision is always yours.

                              I recommend you find an advisor because it sounds to me as though you need someone to act as your 'sounding board' in making this important financial decision. Hiring a pro, instead of depending upon strangers on the Net who have no knowledge of your risk profile or personal finances, would be a sound decision.

                              Good luck to you with whatever you choose to do.

                    • Re: long term care insurance
                      hrmpro2

                      I got it about 8 years ago.  I'm single, age 72, and don't want to burden my young children in their 20s now.  Eventually I'll need ltc.  My premium is $1318 per year, and the benefit started at $100/day, to last three years.  That benefit grows 5% each year, with no increase in premium.  John Hancock, God bless 'em, is now on the hook for about $150/day, and growing annually, for 3 years incase I need the care.

                      I got an elimination period of 6 months, I believe.  I can get cared for somehow during that 6 months.

                      Anyway, I consider it a wise investment for me.  Everyone needs to evaluate for their own situation.  But letting someone explain it to you would help you make a decision that is right for you, I'm sure.  I'd get a couple or more products from different companies to explain their products; then compare.  They will be happy to have opportunity to make a sale, but you don't have to buy on their first visit, of course.  I would not have them out for a second visit unless you are either confused or really are ready to do business.  That's only fair, I think.

                        • Re: long term care insurance
                          W_joseph
                          Good morning.  I am working diligently to esnure I have no debt when I retire in three years.  I have a Consulting Association; which I plan to do some consulting sessions; just for fun, and to keep engaged when I retire.  I have retirement from AT&T, Social Security and my TIAA-CREF Retirement to depend on.  The extra funds on the side....that will be my play money.  To God Be the Glory.
                            • Re: long term care insurance
                              NoleusMaximus
                              Good topic. I must admit that at 57 it isn't one that I've spent a lot of time considering. I am presently working in the regulation of the health care industry and I have seen the devastation to savings caused by health issues. I have a tremendous amount of respect for the Mayo Clinic but there must be alternatives to the scheduling of expensive tests such as MRI's. The cheap alternative is not the answer either. Smaller doctor-owned hospitals often lack the skills to properly diagnose uncommon illnesses. I think that a long-term care plan must address the issue of your expected quality of care. If the appointed care-giver cannot handle the task-the next step may be a teaching hospital. However, you must not allow the process to stop there. The teaching hospital is a "value" alternative for the reinsurer. There should be a clear path for treatment when this value-care is ineffective. A visit to a high-quality medical center like Cleveland Clinic, Johns Hopkins, or Mayo may be the only way to maintain a satisfactory quality-of-life. 
                                • Re: long term care insurance
                                  jkom51

                                  Unfortunately, teaching and specialty hospitals are not options for many. My DH was a union member, and to hold the line on costs the negotiated contracts charge a lot more for PPO than for HMO membership. So unless we want to pay a lot more - hundreds of $$ monthly - for healthcare, we must use an HMO. Fortunately it's a fairly good one, but still, the level of care is well below PPO. It puts more responsibility on the consumer, which is not necessarily a bad thing, in the end.

                                  I have always considered the prospect of needing healthcare services. My father developed Parkinson's when I was 11 and for a few years in high school, I took care of him when his disease was still in the early stages. As he declined I saw the tremendous toll it took on my brother and aunt, who took over his care until he finally died. It made me very aware that living without many relatives nearby and having no children, made it crucial to plan for disability and old age.

                                  No one can plan for you. Everyone's circumstances are unique, physically and financially. If you don't plan, you risk being unprepared when bad things happen.