LTC Insurance

[Pilsy]

Can anyone here offer advice on long-term care insurance? 

If you have it, how old were you when you purchased it? Can you recommend a good provider? 

[shortstax]

Anecdotal advice- I purchased a plan for myself and my husband two years ago. It was through an employer plan with Unum, and I could take it with me when I left that employer. However it looks like Unum doesn't sell it anymore: www.unum.com/employers/employee-benefits/long-term-care-insurance

I found navigating the LTC insurance process difficult, but I'm happy to share what I can. My purchase was probably more emotional than what a rational person would do, but my father has early-onset Alzheimers and was starting to decline when I purchased the policy.

I set up my plan to front-load the premiums over 10 years. So, in short, I pay monthly premiums for 10 years, and after that there are no more premiums. I figured that we'll both still be working for at least 10 years, so might as well pay them now and then hope that we'll never have to use the policy--but time will tell. Would I be better off investing that same money? Probably. Perhaps certainly? lol

We are both relatively healthy nonsmokers. I was 37 when I purchased it (DH 41) and we pay combined total of $202/month for a plan that includes this for each of us:

6 years of 100% costs for professional home care (lifetime max for this is 36k and rises at 5% inflation rate, can be used with a minimum of 1hr of homecare/day)
LTC Facility - $6k/month (which wouldn't pay for it all even now, but to supplement our savings for future LTC) for 6 years

Perhaps I'll update in 40 years to let y'all know if I still think it was worth it.

[bee20]

WA State had a weird LTC mandate/tax put in place, so my employer offered free verrry basic LTC insurance. Then I left that employer and have opted into keeping the insurance while the LTC mandate/tax is worked out in the legislature. Mine is a truly useless amount of insurance, something like $40k total, for $20/mo. If you do not have private insurance, it is a .6% income tax for a $36.5k benefit. Around here a nursing home is thousands per month so this wouldn't cover many end of life situations.

It was passed and then there are modifications and the whole thing is currently stalled. I'm pretty annoyed with it because I had planned to self-insure with retirement savings and now I have to pay a 3rd party or a decent chunk of money annually as tax. As an added bonus the percentage is slated to go up in the future. Essentially WA is trying to deal with the income inequality brought on by tech salaries, wants to do a regular income tax but can't for various reasons, and is now adding in all these social services income...surcharges? I'd personally be fine with an income tax in WA to get rid of all the random extra fees we have, but it's what we're working with, unfortunately.

Anyway...I would generally recommend self-insuring by setting aside the money yourself.

[Pilsy]

Thank you both! shortstax bee20

[jlt19]

My mom bought some years ago and she’s been complaining how it’s going up so much (she’s in her early 70’s). I don’t get why she started 20+ years ago if it was just going to get more expensive as she aged, but she’s not one to reason with.

I just hired a fiduciary and one of the things I’m going to talk to him is about LTC.

[niq]

We're also in WA, I'm using whatever the default LTC from my employer is.

It's very hard to find an LTC policy that's reasonably priced and actuarially fair. And they generally have some cap on how much they pay out. You can get AD&D insurance to cover things like a car accident or rare debilitating disease that strikes in your early 50s, or find a life policy that has an AD&D rider.

Other than AD&D, the nightmare scenario is getting to your late 60s/early 70s and being
(1) too unhealthy to be on your own
(2) too healthy to qualify for nursing home care (the bar here is REALLY unhealthy)
(3) not enough income or savings to pay for independent living or even help around the house
(4) living a long time after that.

That's not an rare situation (ask me how I know), but it's not exactly common. If you retire with mid-five figure income (US median is $47K) and mid-six figure net worth (US median is $300-350K or so), you can afford to start paying for housecleaners, handymen, maybe even someone to help with cooking or washing dishes once in a while. It's reasonable to "self-insure" for this by just saving more, and then choosing how much you want to spend on your own day-to-day quality of life (up to and including private pay independent or assisted living) vs other priorites (travel, giving money to grandchildren's 529s, etc.)

EDIT: lots of people in WA are mad about the LTC tax thing, but as someone living through the other end of it, forced savings that guarantees everyone home aides in retirement would be a very very good thing. I don't care if some asset managers make good money on the float, that's money well spent!