My wife made me buy them. We bought policies for each of us in 2001. The first annual premium was just over $2000/year. Today (age 78), my policy premium is $8,400/year.
The initial coverage was $200/day, with a 5% yearly increase. Today, the daily rate is $614/day.
My wife is on a premium waiver as she is receiving benefits.
She fell in our home in April 2020 (age 73) and suffered a TBI. Medicare paid for hospitalizations and the rehab facility. It was a full six months before she came home.
Here’s the math. Out-of-pocket cost for the first 100 days of 24-7 care in the sub-acute rehab facility during COVID-19 was $72,000.00
When she came home, she needed 24-7 care as she could not do one ADL. TLCI paid for that, with me paying the shortfall.
To date (48 months), LTCI has laid out just over $400,000.00. Our policies have no limits other than $224,000 annually, which increases at the compounded rate of 5% annually.
Policies like ours are no longer offered. Both are unlimited in LIFETIME MAX and REMAINING BALANCE.
Her current care is 58 hours a week.
She has improved as much as she can. The caregiver is here 58 hours (@$34/hour) a week, and I care for her the other 110 hours per week. Her care plan calls for 24-hour care. Currently, LTCI pays just under $2000/week. Her coverage will never end, assuming the insurance company stays in business.
If you’re lucky, you can do without it. Costs are skyrocketing for in-home care if you can find it. We did everything we could to keep our parents out of nursing homes (warehousing for old people).
We expect, depending on my health, that she will eventually need 24-hour care again. Assuming rates are as they are today would result in out-of-pocket costs of about $75,000/year to make up the shortfall.
Long-term care facilities, such as group homes, nursing homes, or relatives, are options. They are cheaper than non-medical in-home care. We lived through the experience of having a parent in a nursing home for 4 weeks. It was awful. We didn’t want it for them and certainly don’t want it for ourselves.
I hope you find this “case” useful in determining whether or not LTCI makes sense for you.
I hear discussions on various retirement podcasts on buying LTC. Most the “experts” are salesman that give you little real information. My husband and I have a shared benefit rider on our policy and a 5% annual coverage increase. It is pretty robust coverage since we live in CT where care is very high compared to other places. But my question is not “Should I buy LTC?” (since I have it) it is “Should I keep my LTC policy?”. No one even discusses that. One thing no one mentioned here was that in order to self insure you have to set aside the money to cover LTC and that money should not be invested in any variable assets since you never know when you will need it. That does not appeal to me, so I tend to want to keep the policy even though the premiums continue to rise.
I think if you can afford it, then self-insuring is the way to go. The downside would be the downside, i.e., if your LTC costs exceed the actuarial expectations, then you’d be on the hook for possibly way more than what it would have cost for the LTCI in the first place.
However, whichever you choose, it’s not the only thing you need to do; you need to minimize your risks of needing LTC, so not just being “active” but actually regaining lost physical activities and range of performance that happened during your sedentary career. There is a slow decline in physical ability, such as with sarcopenia, but you can potentially shape the shape of the decline curve so that your “slow-go” years are minimized and you have a higher quality of life during those years. Once you start down that slippery slope, it can be hard to arrest that degradation, so the earlier you start to work on physicality and weight training, etc., the better off you will be.
My wife and I decided to self-insure. We were unwilling to pay into something with no idea where the premiums could go. Plus the fact is LTC insurance does not pay 100%. We have no children or close relatives and plan to leave whatever is left when we die to charity. We think we should be able to cash flow any issues and plan to stay in our home with home health care as long as possible. The main problem we have is making sure we have someone who is trustworthy when we can no longer manage our assets. Of course, children or relatives have no guarantee of being trustworthy either.
My wife made me buy them. We bought policies for each of us in 2001. The first annual premium was just over $2000/year. Today (age 78), my policy premium is $8,400/year.
The initial coverage was $200/day, with a 5% yearly increase. Today, the daily rate is $614/day.
My wife is on a premium waiver as she is receiving benefits.
She fell in our home in April 2020 (age 73) and suffered a TBI. Medicare paid for hospitalizations and the rehab facility. It was a full six months before she came home.
Here’s the math. Out-of-pocket cost for the first 100 days of 24-7 care in the sub-acute rehab facility during COVID-19 was $72,000.00
When she came home, she needed 24-7 care as she could not do one ADL. TLCI paid for that, with me paying the shortfall.
To date (48 months), LTCI has laid out just over $400,000.00. Our policies have no limits other than $224,000 annually, which increases at the compounded rate of 5% annually.
Policies like ours are no longer offered. Both are unlimited in LIFETIME MAX and REMAINING BALANCE.
Her current care is 58 hours a week.
She has improved as much as she can. The caregiver is here 58 hours (@$34/hour) a week, and I care for her the other 110 hours per week. Her care plan calls for 24-hour care. Currently, LTCI pays just under $2000/week. Her coverage will never end, assuming the insurance company stays in business.
If you’re lucky, you can do without it. Costs are skyrocketing for in-home care if you can find it. We did everything we could to keep our parents out of nursing homes (warehousing for old people).
We expect, depending on my health, that she will eventually need 24-hour care again. Assuming rates are as they are today would result in out-of-pocket costs of about $75,000/year to make up the shortfall.
Long-term care facilities, such as group homes, nursing homes, or relatives, are options. They are cheaper than non-medical in-home care. We lived through the experience of having a parent in a nursing home for 4 weeks. It was awful. We didn’t want it for them and certainly don’t want it for ourselves.
I hope you find this “case” useful in determining whether or not LTCI makes sense for you.
I hear discussions on various retirement podcasts on buying LTC. Most the “experts” are salesman that give you little real information. My husband and I have a shared benefit rider on our policy and a 5% annual coverage increase. It is pretty robust coverage since we live in CT where care is very high compared to other places. But my question is not “Should I buy LTC?” (since I have it) it is “Should I keep my LTC policy?”. No one even discusses that. One thing no one mentioned here was that in order to self insure you have to set aside the money to cover LTC and that money should not be invested in any variable assets since you never know when you will need it. That does not appeal to me, so I tend to want to keep the policy even though the premiums continue to rise.
I think if you can afford it, then self-insuring is the way to go. The downside would be the downside, i.e., if your LTC costs exceed the actuarial expectations, then you’d be on the hook for possibly way more than what it would have cost for the LTCI in the first place.
However, whichever you choose, it’s not the only thing you need to do; you need to minimize your risks of needing LTC, so not just being “active” but actually regaining lost physical activities and range of performance that happened during your sedentary career. There is a slow decline in physical ability, such as with sarcopenia, but you can potentially shape the shape of the decline curve so that your “slow-go” years are minimized and you have a higher quality of life during those years. Once you start down that slippery slope, it can be hard to arrest that degradation, so the earlier you start to work on physicality and weight training, etc., the better off you will be.
My wife and I decided to self-insure. We were unwilling to pay into something with no idea where the premiums could go. Plus the fact is LTC insurance does not pay 100%. We have no children or close relatives and plan to leave whatever is left when we die to charity. We think we should be able to cash flow any issues and plan to stay in our home with home health care as long as possible. The main problem we have is making sure we have someone who is trustworthy when we can no longer manage our assets. Of course, children or relatives have no guarantee of being trustworthy either.