Long Term Care

[VincentVega]

A lot of folks paid into a policy for years to find coveraged capped/limited and/or rates go up so much it was unaffordable. I dont think its a requirement, but worth looking at. It sounds so much simpler to put the $$ into better health now, if it was only that easy.

[Sooner or later]

Originally Posted by Baz

Absolutely.

And even when you have a plan in place - things always change and you have to re-think things.

I'm sorry you had to go through all that - but much respect for being a good son and doing what you could do.

It was hell but I was lucky to have two great sisters to share the load. The worst part was watching dad die a slow 6 year death.

[Sooner or later]

Originally Posted by VincentVega

A lot of folks paid into a policy for years to find coveraged capped/limited and/or rates go up so much it was unaffordable. I dont think its a requirement, but worth looking at. It sounds so much simpler to put the $$ into better health now, if it was only that easy.

Honestly, better health now only puts you into higher risk of care later on.

The longer you live the greater chance of dementia, Alzheimer's, mac degeneration, etc.

As we live longer disease of the aged will only increase

[id10t]

My grandparents on mom's side were very long lived (99 and 100) and mom is doing well at almost 83. In grandparents case, long term care assist let them stay in their W. Hollywood home of 60+years with full time in-home nursing care. Mom has a similar policy, for the exact same reason.

[tdw28210]

Originally Posted by Baz

What I was thinking instead --- is to take the funds you would have used for LTC insurance --- and invest them instead into construction of a living "area" for your loved ones. Either as an addition to your existing residence or the property next door.

It could even be a separate structure on your property such as a carriage house or maybe garage/shop/living quarters combo.

There's also the option to re-locate to a property that already has what is needed - because there usually are plenty around.

I realize in some situations it's better to have your loved ones in a facility run by someone else.

But in many case, being the one who cares for them, maybe with a weekly visit from housekeeping/nurse/etc., I don't think you could do better - including on the financial aspect.

Not a bad plan if you and your loved ones stay on good terms. Friends of a friend recently built a house near the shore and put in an elevator. I thought it was a bit extravagant, but they saw it as a way to stay in their "forever" house longer than if they only had stairs.

I tell my wife half jokingly that we need to build a "cool house" when we retire or our family members won't come over and change our diapers when we are really old. Again, only half-joking.

[Noah930]

Had the meeting with my CFP and the insurance guy today. Interesting plan they offer. You pay fixed premiums for a set number of years.

They ran a 15-year scenario, but the length of time (and amounts) can be adjusted if desired. The benefits, though, continue until your death. So if I pay for 15 years, but then don't need any long term healthcare benefits for another 45-50 years, the plan will be there for me. My premiums are capped/locked. They pay a maximum amount monthly (indexed to rise with time). So for example if I need this plan within the first year of signing up, at first it will pay a max of $3K per month; but if I wait for 45 years before tapping into it, it will pay $11K per month at that time. The plan will pay out for 6 years (each subsequent year also indexed).

There are 3 ways to pay out. Obviously, the long term care part. But there's also a death benefit, so if I die without ever using the policy, my heirs will at least get the money I put into it back. And there's also a cash-out option, where I can get back about $0.80 on the dollar, if I opt to leave the plan at any time.

The only shortcoming I can see in this plan is that actual total cost of care can be greater than the benefits. Though I'm sure the plan can be upscaled to fit whatever I desire (because the premiums will similarly increase). $3K per month is not a lot, when assisted living/SNF/nursing home (or if I just want round-the-clock home nursing ) can cost two or three times that amount.

[Sooner or later]

Good research. What is the basic annual cost? How old are you?

[nb6179505]

Right, they have these hybrid policies for people that want to leverage assets as opposed to parking it for use (possibly as long term care events aren't guaranteed)

Benefit if you need long term care, typically 4-5 times your basis, benefit if you die and never use it equal to premiums you paid in passing on tax free, and cash back 80%

Now the question is how long you'll need the benefit, often times they are capped to protect the solvency of the company

It's a movement of assets, consider your life policy, if you don't need the cash value, you can 1035 tax free exchange into these long term care policies that are built on life policy chassis

Either way you cut it, it's a leverage...now the only thing to consider is, do you trust the insurance company, as they are purchased in good faith these companies will pay out...transferring the risk...

Sent from my Pixel 2 using Tapatalk

[wdfifteen]

Noah,
What are you protecting with long term care insurance? If it is your assets, you might consider giving them to your heirs now. If you're not preserving assets, then when the time comes spend them on your care until they are gone, then let medicaid pay for your care.
My parents never had a pot to piss in. When dad went into the nursing home, rated one of the best places in the state, medicare and medicaid paid the bills. When he died, medicaid had what amounts to a lien on the asset he had left (the house my mother lived in). My mother lived there until she died. The sibs all pitched in to help her out. When the estate was settled, the state of Ohio (which administers medicaid here) was first in line. I bought the house from the estate for $60k and the money went to the state. My dad was in the nursing home for 10 years and it cost the family essentially $60k.
YMMV in Cali, but it's something to consider.

[Noah930]

I'm in my mid-40s. Our kids are still in elementary & middle school, so we can't pass anything onto them yet. Mrs. Noah and I could potentially live another 40-50 years. (Or far less.). I suppose the goal is to protect our assets (home, retirement, kids' college savings) from being liquidated in the event of a severe health misadventure. Would be nice to pass the 930 on to the kids, as opposed to having to sell it. ��

The proposal from the insurance rep was for $4000 premium (for me) for 15 years. So effectively $60K. (Mrs. Noah's quote was for $4700 x 15 yrs.) But if I were to choose a shorter timeframe for payment, the overall cost comes down. 10 years comes out to $53K, 20 years $66K.

[VincentVega]

Add up what that premium would be using a 7-8% return then compare to the max payouts from the policy. Gets a bit complicated with taxes, depending on if you qualify for a roth... but its pretty straight forward to build a plan to get at least part way there yourself.

[Sooner or later]

As I stated earlier about 5% of 65+ old folks are in nursing homes or assisted living. 2/3 of that 5% are women.

[wdfifteen]

I’ve had bad experiences with insurance companies and insurance sales people. I don’t trust them.

I understand the sense of security you get from giving your money to someone who has gained your trust to take care of for you vs managing it yourself. There is so much to know about money management, it’s boring, who has the time? You could make mistakes.
IMHO it is Better to make a few inexpensive mistakes that you can recover from as you learn than to make one colossally expensive mistake that you can’t recover from.

In your shoes I would put the $4k/year in a trust for the kids (you CAN pass assets on to them now), invest it in a simple index mutual fund for them, and buy term life insurance until they are adults. That’s just me.

[Baz]

Little off topic but - insurance has it's value - but I'm not sure most people understand it.

Like I said once before in a different thread:

In a perfect world the policy should read:

You pay $100/month for the rest of your life and we take care of all your expenses if you ever end up in assisted living.

(or insert different amount/month)

It really should be that easy. Just one line.

[VincentVega]

ha, give me some of what you are smokin Baz!

[Racerbvd]

I am a life member of The Loyal Order of Moose , since I have no children, when get old & drooling on myself and can just sign over what I have left and be taken car of at Moose Haven, which is right on the St. Johns river and right down the street from me as well. I have other options as well, being a Mason, I have the Masonic home in St. Pete.