Long Term Health Care Insurance Pitfalls?

[StillStanding]

Does anyone have advice about long term health care insurance? Is it a good investment? I'm hoping that someone can advise me if this is a wise way to go! Thanks!

[ForeverBlessed]

Originally Posted by Pianoman

Does anyone have advice about long term health care insurance? Is it a good investment? I'm hoping that someone can advise me if this is a wise way to go! Thanks!

Pianoman,

I don't handle the finances of my mom, but I know that her illness has really drained her in the last year or so... My sister who was in insurance for years highly recommends it. My mom has alzheimers and she is in assisted living home that doesn't come with individual care. She has part time help that is paid to care for her. We have just been told she needs full time or will have to relocate...her care is just too much. That is a large sum of money that will be going out now.. I have heard my sister say several times that she wished they had gotten it for mom, and that she thinks its important...

After seeing a parent that required long term health care.... I think it would be worth it if you have the money.

[Ron]

Originally Posted by Pianoman

Does anyone have advice about long term health care insurance? Is it a good investment? I'm hoping that someone can advise me if this is a wise way to go! Thanks!

Up in Canada, contrary to what people think it ain't as Socialist as you think.
While we do have basic universal health care, long term care "costs."

So if one has a home, it has to be sold to pay for "long term assisted living care"
only those who have no money get the Government to pay!

If you can afford it-get it!

[Rico]

Originally Posted by Pianoman

Does anyone have advice about long term health care insurance? Is it a good investment? I'm hoping that someone can advise me if this is a wise way to go! Thanks!

Pianoman, it all depends on your assets, whose name they are in, and how willing you are to take the chance on ending up in a nursing home.

[CC1]

Pianoperson,

I did a little research a couple of years ago and the policies I saw did not look like very good deals. Not what I was expecting.

However it was not an exhaustive research so I could have just been looking at the excpetions and not the rule.

I am interested in this subject also so let me know what you find out!

(My goal had been to secure a policy for my wife and myself that would pay for either of us to be in a nursing home if something catastrophic happened. Otherwise they want you to sell everything you own and be destitute before Medicaid will pay)

[True Believer]

Yes, you should get long term care insurance. But not until you are 60 years old. It is basically used for your old age. I had to put my father-in-law in a medicad nursing home. While they did take care of him it would have been nicer if I was able to pick which one he was able to go to. A private nursing home would take the long term care insurance. Check out Zander insurance for some good quotes.

[StillStanding]

Thanks for the advice folks!

Just as True Believer mentioned, I had a financial consultant tell me not to get a policy until age 60. I'm now 52, so I think I'll wait a few years at least.

After researching, I found some interesting statistics.

• The most important concept to understand is that long-term care insurance policies will not protect a person's savings.
  
  
• Despite the claims of sales personnel, most policies are so flawed that if agents were honest about the policies' limitations, many customers would probably not purchase them at all.
  
  
• Assuming my policy is purchased at age 52 and remains in effect until age 80, the age by which 50% of all seniors will need a nursing home, I will have paid in the neighborhood of $84,000, which is the cost of a year of nursing home care! Since 65% stay shorter than a year in a nursing home, to me the best bet is to put the monthly payment amount into a special savings account or mutual fund to draw interest. By age eighty, I would have approx $217,157 in that savings account which should be enough to pay for well over a year in a nursing home.
  
  
• The National Association of Insurance Commissioners reports that 16% of all nursing home insurance buyers drop their coverage each year because they can no longer afford it. Insurance companies know that of those who buy coverage at age sixty, 95% will have cancelled the coverage by age 80! The reason: After retirement, the payments are too high to absorb with their limited income.
  
  
• Many policies cover only "skilled" care. "Skilled" care is insurance language meaning services provided by a doctor or a nurse. Most "skilled" care is already covered by Medicare and most Medicare supplemental insurance, making policies covering only "skilled" coverage absolutely and totally worthless. Nearly 50% of people receiving nursing home services do not require skilled care.
  
  
• Most policies have coverage that only start when there is inability to perform three or more Activities of Daily Living (ADLs). The commonly recognized ADLs are: bathing, dressing, toileting, transferring (getting in and out of a chair or bed), and continence (voluntary bowel and bladder functions). Approximately 2.9 million U.S. citizens need assistance with only one or two ADLs. A policy that requires assistance with three or more ADLs is designed and intended to rarely offer benefits to the policyholder.
  
  
• "Service based" not "disability based" coverage. According to Consumer Reports "the most liberal coverage would be provided by policies that allowed policyholders to obtain services wherever they wish when disabled." This is known as disability-based coverage. No long-term care policies have been discovered that meet this standard for nursing-home care. Instead, current policies are "service-based," so that regardless of the type or level of disability, policyholders are limited to receiving particularly defined services at specific facilities.

[Ron]

Originally Posted by Pianoman

Thanks for the advice folks!

Just as True Believer mentioned, I had a financial consultant tell me not to get a policy until age 60. I'm now 52, so I think I'll wait a few years at least.

After researching, I found some interesting statistics.

• The most important concept to understand is that long-term care insurance policies will not protect a person's savings.
  
  
• Despite the claims of sales personnel, most policies are so flawed that if agents were honest about the policies' limitations, many customers would probably not purchase them at all.
  
  
• Assuming my policy is purchased at age 52 and remains in effect until age 80, the age by which 50% of all seniors will need a nursing home, I will have paid in the neighborhood of $84,000, which is the cost of a year of nursing home care! Since 65% stay shorter than a year in a nursing home, to me the best bet is to put the monthly payment amount into a special savings account or mutual fund to draw interest. By age eighty, I would have approx $217,157 in that savings account which should be enough to pay for well over a year in a nursing home.
  
  
• The National Association of Insurance Commissioners reports that 16% of all nursing home insurance buyers drop their coverage each year because they can no longer afford it. Insurance companies know that of those who buy coverage at age sixty, 95% will have cancelled the coverage by age 80! The reason: After retirement, the payments are too high to absorb with their limited income.
  
  
• Most policies cover only "skilled" care. "Skilled" care is insurance language meaning services provided by a doctor or a nurse. Most "skilled" care is already covered by Medicare and most Medicare supplemental insurance, making policies covering only "skilled" coverage absolutely and totally worthless. Nearly 50% of people receiving nursing home services do not require skilled care.
  
  
• Most policies have coverage that only start when there is inability to perform three or more Activities of Daily Living (ADLs). The commonly recognized ADLs are: bathing, dressing, toileting, transferring (getting in and out of a chair or bed), and continence (voluntary bowel and bladder functions). Approximately 2.9 million U.S. citizens need assistance with only one or two ADLs. A policy that requires assistance with three or more ADLs is designed and intended to rarely offer benefits to the policyholder.
  
  
• "Service based" not "disability based" coverage. According to Consumer Reports "the most liberal coverage would be provided by policies that allowed policyholders to obtain services wherever they wish when disabled." This is known as disability-based coverage. No long-term care policies have been discovered that meet this standard for nursing-home care. Instead, current policies are "service-based," so that regardless of the type or level of disability, policyholders are limited to receiving particularly defined services at specific facilities.

Interesting facts Pianoman, and I don't dispute that.
What about this scenario, you turn 65 & retire, within a few years (God Forbid) your healthy deteriorates & the decision is to put you in the Care home & there you live amother 8-10 years before passing on?

What then?

My Aunt had a massive stroke when she turned 72 it left her paralyzed & unable top talk again.

She survived for another 7 years before passing away.

Guess where thier kids inheritance went?

I am not disputing your points they are good, but consider all scenarios first.

God Bless!

[StillStanding]

Originally Posted by Ron

Interesting facts Pianoman, and I don't dispute that.
What about this scenario, you turn 65 & retire, within a few years (God Forbid) your healthy deteriorates & the decision is to put you in the Care home & there you live amother 8-10 years before passing on?

What then?

My Aunt had a massive stroke when she turned 72 it left her paralyzed & unable top talk again.

She survived for another 7 years before passing away.

Guess where thier kids inheritance went?

I am not disputing your points they are good, but consider all scenarios first.

God Bless!

I guess it's a roll of the dice.

There are legal ways to protect half of one's inheritance for purposes such as this. We are talking with a financial expert and lawyer now about protecting some of my mother's assets. It's not because us kids want the money! It's because we want our mother to be able to have extra money for clothes and food when needed!

Hopefully, I'm putting enough money back for retirement to cover a catostophic senario such as the one you mentioned. If it cuases my children to not get any inheritance money, so be it!

The special savings account that I mentioned could help a little. This is over and above my retirement savings.

If I live to be over 80 years old, there is a 50% chance I will need a nursing home at some time.

[CC1]

Pianoperson,

I am not surprised at the results of your research as it is essentially what I discovered in my limited research also.

The premiums were very high and did not cover much.