Is long-term care insurance worth it?

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Is long-term care insurance worth it?

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My parents bought LTC insurance in the 1990s. The policy they purchased is awesome but (from what I hear), new policies are not as good. It has no lifetime limits. I had to place my dad in an ALF this year at a cost of $5,500/month. The policy pays 100% of that (after a 90 day elimation period). The claims process for the policy was lengthy and detailed. It took a LOT of leg work. But the policy began paying and we are so grateful.

As I stated, the claims procession took a lot of work. I had to run around town with various forms to be filled out by different medical professionals that had seen my dad during the past year. It took at least three months to before my dad's care was approved. Therefore, it seems to me the policy is useless unless you are sure that you have someone to designate to prepare all of the paperwork and submit the claim for you down the road. Also, I have to submit monthly bills and occasional forms to the insurance company to keep this policy paying out monthly. They do not pay the ALF directly, but send a check to me, that I have to deposit and then pay the ALF. Do not buy a LTC policy if you don't have someone you are sure will be there to do the leg work for the claim.

I don't see the point in getting a LTC policy that is not very comprehensive. If it only pays a portion of the cost of care, you will still drain your assets down. My dad's sister went into an ALF a year before he did. She is on Medicaid and honestly I think there were less hoops for her to jump through and all of her costs are paid for, no questions asked and no follow-up work on her part.

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SelfishSiblings is right ... IF you can be disciplined to put the same $$$ the LTC would charge as a premium, and you keep it invested at "average" market returns (near 5%/year), you should come out ahead. Like any savings plan, if you fall off the boat, it won't work. Even better ... keep tabs on what premium increases would be and increase your savings contributions to match. In spite of the statistics on need for LTC, there are still plenty of anecdotes of people dying quickly. The insurers count on the averages, so people who die quickly make up for the ones who live longer. There are so many restrictions and requirements on opening an LTC claim, I'd rather be in control of my own money.
One more benefit to LTC is that the assets held by the insurer are outside the control of the beneficiary, so the money can only be used under the terms of the policy - i.e., you can't be sued and have it taken away, a single extraordinary expense cannot deplete the policy. For the most part, you are at the greatest risk if you are in the no-man's-land between poor and wealthy. Poor enough, and you'll get whatever Medicaid will cover. Wealthy enough and you buy whatever you want. In the middle, we roll the dice and take our chances, hoping it will work out reasonably for us in the end.

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I have to say YES so worth it. Of course, depending on the company the LTC is with and the actual policy that was drawn. I am DPOA for my mom who has dementia and if she didn’t have her LTC that my dad had set up for her years back it would have been awful for her as the standpoint of qualified care for her rapidly declining health. The idea here is reputable company! Check out a few then ask questions! I know Thrivent is extremely reputable and although some may disagree, it boils down to what you sign up for in your actual agreement. It’s worth a look into and I know with Thrivent (and no, I do not work for nor do I have family that does) they worked with us even when we decided to get our own policies as far as monthly payment, payouts, increase caps, etc. Ask all those questions. Plus they don’t harass with phone calls which was a plus for me and they answer any and all questions right away.

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I echo everything Upstream wrote. My Mom paid $149/mo. for LTC insurance for many years. When she became seriously ill I tried for 18 mos. to convince the co. that she was entitled to benefits. So many hoops to jump through. When they finally approved her I was completely overwhelmed at all the documentation they were telling me to submit. Luckily my sister is an accountant and she handled filing the claims. I had bad-mouthed LTC ins. for quite some time but it ended up paying for itself many times over. But I can’t overemphasize that it would have been completely worthless without a dedicated person (not a senior with dementia) to handle all the paperwork.

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I am a member of the Knights of Columbus. They have been offering LTC for about 17 years. Our policies were purchased just shy of 20 years ago. We pay about $65.00 a month with $8000.00 a month benefit with guarantee purchase options every two years which we exercise about every four years, on my wife's policy. The math says over thirty years we'll pay out about $21000.00 in premiums. We live in the National Capitol Area, currently in our area, that amount of money would be eaten up in two and a half months. We bought in when there was no cap on the number of years, and amount will pay out on policies. New policies have a max five year cap now. I'd say it is the best investment that could be made, and the smartest thing I've ever done. Buying LTC from an insurance company with as high of ratings as the KofC has is a good way to spend your money when purchased when you are still in great health and young. No, I don't work for them, I am retired from the travel industry and do not work. My wife is in the field of education.

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amott, that's GREAT!! Who is your long term care policy with?

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While expensive, it provides peace of mind knowing that these needs will be met if we need them down the road without depleting all of our resources. We are protected for 3-4 years, which we viewed as average nursing home stay. Much longer stay could still be devastating financially. The hope, as with most types of insurance, is that we stay healthy enough to never need it.

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I've done a fair amount of research on long term care insurance. I'm sorry, I do not have any personal experience. One recurring theme I've found is the premiums increase frequently, to the point of being prohibitively expensive, and the insured simply has to cut their losses and drop the policy. Of course, no one can predict that, and you can't know that before it's too late....

It's certainly a gamble and YES!!!--the insurance company's *real job is "not to pay"--always. But what are the other viable options? Only Medicaid or a Continuing Care Retirement Community. CCRCs also have to "medically" accept you. If you have any kind of diagnosis, they won't take you, even if you're healthy. So, that brings me back to my previous point: the job of any "insurer," however that insurer may be disguised, is "not to pay." Good luck to all of us. I am a married mid-40s person with no kids in a high cost of living area and I have no idea what I will do when the time comes. I'm grateful that I have no interest in leaving an estate.

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My dad had long term care insurance that he purchased at a young age.
He had been in a beautiful assisted living facility for 2.5 years. The rent was approximately $5000. I believe the policy paid him $2500 a month. He had to pay the difference. Fortunately he was a very smart man and also had savings. Long term care also provides in home care but pays very little for it. Dad had in home care for awhile but it was only 4 hours a day. They pay more if in a facility. Yes, there is alot of paperwork
and appointments. You have to submit the billing yourself. I would say long term care insurance is good to have. It worked out great for my dad.
But I don't know all the details of these kind of policies. I would investigate throughly before getting one.
Have a blessed day.

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I convinced my folks to buy LTC insurance in the early 2000's. They bought a modest policy with 90 day waiting period & lower per day limits. The policy is difficult to interpret, but I managed to get mom's claim approved. It took from March 2017 to July 2017 to provide documentation before benefits began. They recently moved to assisted living & she gets $1650 per month. My husband & I bought policies in the 1990's & will continue to pay on them. We have no children (no guarantee kids would help you anyway!) so I believe this is the way to go. Of course, I don't know who's going to help me get the "necessary documentation" when I'm ill & debilitated. Someone needs to create a cottage industry by gathering & providing this documentation! Anyway, since we're all living longer, it makes sense to look at LTC as an option & have a non-biased elder law attorney help review policies & interpret them.

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I have sold this product over the years, but since January 2015, Life Insurance has changed substantully, Check Out the Universal Life Policies. They now have Living Benefits that will take care of LTC needs

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I have no personal experience with it. We don't have it, neither my husband or I could afford the premiums when we were working. My Aunt who is 90 and in assisted living has it and she is happy with it. My girlfriend and her husband got it and it paid for him in memory care for 3 1/2 years. She is happy with it. I don't know details.

My aunt got hers through the military many years ago, and that policy might make a difference in benefits. My girlfriend told me it is like an insurance and it would pay up to $200,000. that was the option they purchased.

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My understanding is that long-term care is in trouble, as an industry, and that it's no longer possible to buy policies like those that were bought years ago. Howard Gleckman is a wonderfully sensible columnist who writes about this and other aging issues, and also works with think tanks on this issue:
howardgleckman.com/2017/09/stand-alone-long-term-care-insurance-continues-fade-away

Hence one probably can't rely on how well LTC insurance worked for one's parents, and anyway, it seems that people end up with quite variable experiences, depending on the policy, the carrier, and their personal circumstances.

If you are concerned, consider learning more about policy and advocacy. Caring Across Generations (caringacross.org) is one newer organization trying to advocate for caregivers. As a society, we need to pull together, because left to their own, many people are getting clobbered by the cost and complexity and sheer workload.

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Years ago, Dad purchased a LTC policy from a well-known provider for Mom. She entered AL-Memory Care last April. I Initiated a claim with the insurance company, really didn't expect much in way of return, but we are now receiving a bit less than $1900 in monthly benefits. This benefit will continue for 3 years before "running out". Granted, the payment doesn't come near covering the (nearly) $8000 monthly bill, but every little bit helps. We'll take it!

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My spouse served during the war and now has ALZ but if you have over Ninety thousand in assets including your house you pay 90 percent of all your income. It's not easy but he could not be getting better care than the VA facility he is in. It is clean, bright, and the staff could not be more caring to all the patients. When my funds run out they will put a lien on the house but will not make me move. When I move or pass on they will take what is owed and the rest will go to my family. My sister and I are still wondering who will fair better with LTC or me who did not sign up years ago.

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I have heard it was a blessing for some people. I truly don't know that much about it. However, other people have paid a fortune into it and found it devastating to find out all the hidden requirements where it did NOT pay or paid very little. I suggest if you are interested and can afford it, hire an expert to look it over and tell you if it is right for you.

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My two friends for whom I was made their POA each had LTC insurance. The wife's policy was for a higher amount as she was 17 years younger than her husband and they assumed he would go first and she would need a higher amount later in time as costs rise. They each had a yearly step-up increase built in. As it happened, the wife developed frontal temporal dementia and the husband short term memory problems. The wife's condition was more serious and I got them into a memory care apartment in June of 2015. There was a 90 day waiting period before any pay out, so the wife got one month of coverage before passing. All those extra dollars went away. The husband's policy for a lesser amount each month did get used up. We just got the last check last month. It covered about 1/4 of the monthly cost, so it helped. I just finished selling their town home and the money from that will pay for another 14 months or so. He gets half of his wife's retirement check each month, plus his retirement and social security. And they had money in an IRA that will get tapped when these other funds run out. He is also eligible for veteran's benefits when he becomes poor enough. This facility said they would take public financing after 18 months of regular pay for their apartment and care and we are well past that now. They assured me they would never have to leave as they provide care to the very end. And from all that I have seen, their care is quite good. They are attentive and watchful for changes and new needs with this aging process and loss of mental acuity. My wife and I just took out LTC and we are 74 and 73 respectively. It will be paid for our of our investments, not our monthly living money. For the two of us, it is around $5200 a year. We looked into it, weighed the pros and cons and decided to do it now that I am more familiar with care costs because of taking responsibility for my two friends. I assumed we could pay for care costs out of our monthly income, around $5,000 a month, but that wouldn't even pay for one person, let alone a couple. Selling the house would bring in a big chunk of cash, but we are trying to have an estate to leave our children, too, if we can. The LTC policy might make that more possible. I think the insurance companies count on people not living in a care facility all that long once they get there. As more of us live longer lives, though, it is putting pressure on the companies and they have to raise rates. Your policies can have a built in inflation clause that increases the amount each year. You pay extra for that, of course. It is tricky to weigh the pluses and minuses in this. For my friends, the husband got all his benefits, while the wife got one month's worth. Some LTC policies have a guaranteed pay out to the estate, too, like a life-insurance policy. That makes it a little more attractive to me.

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Don't be fooled into thinking that a Medicaid funded facility is going to be anywhere near what most of us would think would be acceptable. Unless you do as one person noted above and make sure that you save money every month so that you can pay the FORTUNE that long-term care costs, I have found that you're better off with a long-term care policy. I agree with everything noted above -- it kept going up every year, my mom paid a TON into it, it was a nightmare and took forever to get it going (and I was out-and-out LIED to by the insurance person who was supposed to process it for us; she had been fired by the time I figured it out), and it doesn't pay enough. But it is the ONLY way that I've been able to get my mom into a nice community. I live 11 hours away and have not yet been able to change my job so that I can be with her; my siblings provide almost no help for her. Things are tough, but they would have been much worse if she hadn't been smart enough to begin a LTC policy at age 62. She didn't realize that it only covered 3 yrs of care, but it has been better than any other option for us. Some of the other people in her community were able to get plans that cover them until death -- I don't know what we will do when my mom's 3 yrs are up. I'm hopeful that I will be able to retire and move to where she lives by then. She can then live with me, altho' I have no delusions that this will be easy. Her friends who do not have LTC policies are in Medicare-funded communities that are not nearly as nice as her's. It was a huge fight to convince her to move at all. Insurance companies are not our friends, but unless we're independently wealthy, excellent savers, or die early we're really dependent on them. My mom's LTC payment combined with her SS currently cover the costs of her facility, and she's only at Level 2 of care. I'm heading toward 64, so really have to get a policy for me, too.

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My wife and I faced this issue earlier this year. We were looking at facilities in our area for a relative. We were told that there was a long waiting list. When we explained that our relative would be using long-term care insurance to cover the full cost of care, we were told that there was no waiting list. The waiting list only applied to those who were relying on Medicaid because the facility had reached their Medicaid limit. If the availability of Medicaid "beds" is this limited now, how long will the Medicaid waiting list be after the proposed cuts in Medicaid?

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When my relative decided to file a claim on her long-term care policy I did NOT handle her claim for her. Even though I’m a licensed insurance agent I didn’t handle her claim.

We contacted one of the national home care agencies and they handled it for us. This particular home care company processes thousands of long-term care insurance claims every year. All we had to do was sign a couple of HIPAA forms and they took care of the rest. The claim was approved in about 3 weeks.

They handled the claim for free. It makes sense. The home care agencies get paid by the long-term care insurance companies. They have a financial incentive to set up a system to successfully process long-term care insurance claims. They know all the ins and outs of getting a claim approved quickly.

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If you're relative has a policy that can run out of benefits in 3 years or so, check to see if the policy is a "long-term care partnership" policy. These policies will allow your relative's assets to be protected from "Medicaid spend down" and "Medicaid estate recovery" even though the policy has run out of benefits. 44 states have approved these programs. CT, NY, IN, and CA started their "LTC Partnership Programs" in the early 1990's. Other states started offering these programs around 2005.

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I bought a policy for myself in 2011, one day before my 64th birthday (when the premium would have gone up). Hubby had been diagnosed with dementia one year earlier, and care was costing $6K/mo for a single caregiver at home. Fortunately he was a good earner & saver so we were able to pay this but it occurred to me that although we might be able to cover one person's extended illness we'd be in deep doo doo if the same thing happened to me. I went to a presentation (not by an insurance person!) that explained that if you could afford it the way to go was a single premium policy with an inflation rider and a lifetime payout benefit. I consulted a Dave Ramsey ELP insurance guy and a couple of others and settled on a policy which starts at $6K/mo for the first $150K paid out. It's also a life insurance policy--anything I don't use goes to my heirs. Then I added the lifetime benefit and the 5%/year inflation rider (which about doubled the premium!). It's supposed to pay for a facility or home care and is pretty comprehensive. It did cost me $138K, which I know is prohibitive for most people, but in the worst case it's just expensive life insurance, and in the "best" case (if you want to call it that!) it will subsidize my care for the rest of my life. As I watch our net worth dwindle with the now $15,000/month I pay for my husband's care (and it's worth every penny--his caregivers are wonderful!), it gives me a great deal of relief to realize that I've put something in place that should help a lot if I need the sort of care he requires. I'm also seriously considering a CCRC for myself when the time comes (don't plan to move hubby). I've just started my research but have determined that some of them work with existing LTC insurance, and I had a "free" lunch and a tour of one which has a good reputation and is quite attractive. My parents made a "life-care" deal, where they paid a lump sum "endowment" into one of these places and their monthly fee ("rent") remained the same (with COL increases of course) when my dad required care in the onsite facility for FOUR YEARS and mom stayed on in the apt, and then she was in the LTC facility herself for a year a while later. Five years of LTC cost would have definitely wiped them out! We had decided years ago that we could self-fund but we weren't thinking of more than a couple of years each. As hubby goes on and on and shows no sign of dying any time soon, I am glad I did what I did.

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My mother benefited greatly from her LTC policy for it protected her investments and other money.

My dad is currently benefiting from a LTC policy but it will end next May.

Since, I inherited quite a bit of money from my mother, I looked into LTC for myself. I learned that you can't buy it if you are on disability which I am.

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Sorry Srimble B but having a reputable company does not assure you anything. My Dad did his due diligence and paid more than avg in the 80's for a great company in good standing and that company formual did not pan out. So dad pays more and more and is is saving his. No guarantee on ANY company large or small. The company is just as much a gamble as wheter you get to use or not.
Folks if you have it use it.

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thank you everyone for sharing your experiences. You've given me much to think about that I had not considered. Good luck to all of us.

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The answer will vary with each individual.

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My husband has Alzheimer's and has been in a nice memory care assisted living for one year. Thanks to a LTC policy I don't worry about money and know that he is safe and well cared for. Yes LTC is expensive but though we made payments for 15 years that amount was recovered after 4 months. No additional payments made to his LTC insurance after he entered AL and prescription medicine covered also. Yes, my LTC insurance monthly costs have increased dramatically but I still think that it is worth it.

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We took out LTC in 90's w alternative care. This allows me to have a private caregiver in our home not to exceed daily $ & years we subscribed for. I suggest you take someone using LTC w you when inquiring. There was so much I didn't think or know about but found out when wanting to use it. We were blessed to get what we have as cheaper to have caregiver at home to give relief & adult day care so I stay healthy & can provide rest of daily hrs. As long as possible. It also extends money longer than 5 yrs. Hubby w alz. I continue to pay on mine & pray never use it. It is a lot of paper work but have retired. I understand much more expensive now. My advice if rich get high coverage if not don't get it. If I must put hubby in memory care will get half paid of cost till $ subscribed to runs out. Who knew we'd ever use it but blessed to have the agent present it to us many yrs ago.

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My game plan. Putting everything in a trusted family members name. Then can do a spin down if needed. Doing this 5 years before care is needed protects the house and such. LTC can run out too fast! Would much rather put that money in a whole life policy where cash could be pulled if needed. However the owner of the policy also needs to be in another name too.

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From both my mother's and my dad's LTC, I know that it did not and does not cover 100% of expenses. Plus, I had to pay the nursing home first, send the bill in and the LTC reimbursed me their percentage which I believe was 80%. I'm not sure how you are going to predict when to start the 5 year spend down?

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Is long-term care insurance worth it?

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