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No, No, No. Did I remember to say, No? Lordy, I've been dealing with Mom and Dad's LTC insurance company for months. I've provided every single detail required on their claim form (which is A LOT). They then claim the caregiver, facility, home health care, etc. company is not responding to their need for more information.
Like all insurance companies, their main objective is to keep their money. There are SO MANY caveats to each claim. Plus, most have a 6 month waiting period before they'll begin payment. Many elderly folks die within 6 months of moving to a care facility.
So, to wrap up. NO, do not buy LTC insurance.
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@Ceecee65, when someone buys long-term care insurance they choose their waiting period. Most policies offer waiting periods of zero days, 30, 60, 90, 100 or 180 days. According to the most recent industry survey, 94.2% of policies have a waiting period of 100 days or less. Only 3.9% of policies have a 180-day waiting period.
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When my relative decided to file a claim on her long-term care policy a few months ago I did NOT handle her claim for her. Even though I’m a licensed insurance agent and I’ve specialized in long-term care insurance for over 20 years, 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 within 3 weeks.

They handled the claim for free because they wanted my relative to use their agency for her care.

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 and quickly process long-term care insurance claims.
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LTCShop: what a great service for the home health agency to provide! Is this common for hha's to do this? I finally secured benefits for my mom from her LTC. It took from March to August before benefits started. But I am grateful. I may have her taken off claim in about a month so because she's doing well & I want to preserve her benefits. Any tips for minimizing problems if I need to restart her benefits would be appreciated.
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Keep a copy of the letter from the insurance company stating that the elimination period was fulfilled. Most policies state that the elimination period only needs to be fulfilled once per life.
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Then again ours says if not in use for certain amt of days you start over w elimination period. Ugh! We've alz no chance of that. W/O it I would be a basket case. Keeps me w free hrs. Even tho nites arnt always perfect retired so can sleep during day.
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I am very dubious about this product. It is very expensive and I wonder is you save the amount of the premiums and they were properly invested there would be enough money to pay for your own care when the time came.
I have also done assessments for long term care and the slightest thing can get a refusal, plus I have also looked after patients who really needed the benefits and the insurers dragged their feet and the patient died without any help.
In my opinion it is a very two edged sword especially as we don't know now what will happen to medicare and medicaid. There is also the problem of many poliies being limited for number of years they will pay.
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The Long Term Care Ins. that came out in the 90's has changed sever times and is just not worth buying, even if you need it. Univ. Life has also changed, by adding Living Benefits that can be used for Long Term Care. Also if you don't use it, you can use, your beneficiaries will get it.
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If one is single and has no children, then it simplifies the matter somewhat. If I were forced to spend everything on a nursing home out of my own pocket such that I had to go on Medicaid, what difference would it make? (The only other family members I have are well-enough off that they don't need an inheritance from me.) Paying for the insurance is expensive and thus a guaranteed loss of money versus a need I might never have (or might have for only a short time) with a backup system (Medicaid) in place.
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Nobody needs an inheritance from me, either. I just decided to get LTC ins in event that something happened to me similar to what's happening with my husband. We decided years ago to "self insure" because we figured we had enough saved so we could afford a couple of years each in a nursing home. Well, we could have. But now we are going on 8 years with my husband needing 24/7 help with everything, but he just got kicked off hospice because he isn't sick enough (Parkinsons but decline is imperceptible). He could go on for years, he's healthy other than the dementia & parkinsons. I can absorb this for a few more years, but I didn't want to spend the rest of my life worrying that the same will happen to me. Plus, since I don't have anybody, who would see to it that I got decent care in a Medicaid facility? If I don't use my policy, it turns into life insurance. Admittedly, the LI benefit isn't much more than the premium I paid, but I was really only interested in the additional life time benefits and inflation protection, which made it expensive. As with any insurance, the idea is to be able to cover a DISASTER. One hopes not to have to use car insurance; I hope not to have to use my LTC insurance!
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CeeCee65, what insurance company are you dealing with?
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GET IT! My friend's parent's $2 million dollar estate was wiped out!!
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@WizerOne--How long were the parent(s) receiving long-term care, and what kind? If both parents are each in a nursing home for considerably more than a decade (or one parent for a quarter of a century), I could see that happening.
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It's a good deal , if the insurance company will pay the claim!
You all need to know that if you have planned on your long term care to pay for your needs in 30 years, withno plan B , then you are taking a big risk!
The insurance landscape will have changed, as will the different types of facilities available. Care offered in 30 years from now, will most likely be very different ,with different licensing from today. These differences greatly affect your ability to collect on a claim.
Collecting on any insurance policy is never certain. Long term care is no different.
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Badandy, please stop scaring people. 30 years from now care will be provided the same way it is today: by caring, loving human beings. Of the nearly 300,000 long-term care insurance claims filed this year, about 80% of them are for care that is received at home; care that is provided by home health aides. That's not going to change.
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LTCShop: thanks for the reassuring words & facts. With no children, LTC insurance is about all My husband & I will have in our later years.
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LTCShop, I'm not trying to scare anyone. I'm just stating facts. It is not a given that a LT claim will be paid. People should have a plan B .
LT companies prefer to pay the Home Care benefit as it a smaller payout. Moving to the next level, Assisted Living , can be difficult as many policies claim to be " Nursing Home" only, when in fact, the contract verbiage covers Assisted Living.
Policies purchased now will also have issues, as no one can foresee the future.
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I started searching morningstar.com for articles on LTC insurance. (I love that website!) I found out about a hybrid life insurance/long term care insurance policy. It's a single premium policy, so you give them a lump sum and don't have to worry about your premiums going up, and apparently, it can pay several times the original investment in the form of a long term care annuity. Some part of what's left will go to your beneficiary when you die. That sounded like a more predictable option than a policy you pay on over time. Thoughts?
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Had a family mtg this week to discuss mother's long term care. She's always had a LTC policy and has stated repeatedly that it was "more than enough".....big surprise, although she's kept up the premiums for 23 years, it will pay $35 maximum per day towards any kind of NH, ALF. SNF. $35. Wow.

She is never going in to care. Brother will NOT ALLOW IT. She's with him until she dies. The mtg simply established what the rest of us sibs needed to know--was there really any money there for her care. Answer, no.
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Midkid,

At least 50% of the seniors in the United States should NOT own long-term care insurance because they can qualify for Medicaid. Your mother is one of them. She doesn't need long-term care insurance, she has Medicaid. Today, when someone buys long-term care insurance, there's a form they have to complete regarding their income and assets. The form is designed to prevent people from buying long-term care insurance if they can easily qualify for Medicaid. It's a very important form and it's been required in most states since the late 90's. If that form had been required 23 years ago, in your mother's state, the insurance company would not have issued her a policy.
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@Christine,

A Life/LTC "hybrid" policy is usually a great choice for someone who buys it in their forties (maybe early 50's). They are usually not a good value for someone older than that. Be careful because not all hybrids have guaranteed premiums or benefits. Don't judge the policy by the "projected values". Judge the policy by the guaranteed values. Also, keep in mind that most hybrid policies do not have any inflation protection.
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@LTCShop,

Thanks for making the distinction between projected values and guaranteed values. I'm curious about why you say they're not a good value for someone in their 50s or older. Can you point me to a resource or provide more information?

I was thinking it could be a good thing to purchase around age 60 when you have a good idea of what your available retirement funds will be.
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@Christine,

The insurance companies love it when people buy these single-premium hybrids.

1) They earn money on your money for a very long time. The investment return on your deposit is usually less than zero. When you look at the guaranteed surrender value, if you cancel the policy you usually get back less than what you put in.

2) When you need care, they use your money first. If, for example, the single-premium is $100,000, they’ll use that money to pay for your care FIRST before they use their own money. If the single-premium is $100,000, essentially you’re buying a long-term care policy with a $100,000 deductible.​

3) When you need care, you'll have to use even more of your own money.
A $100,000 single-premium “hybrid” policy will probably pay less than $4,000 for each month that you need long-term care. From the very first month you need long-term care you’ll have to use your own money in addition to the $4,000 the insurer gives back to you each month. Most “hybrid” policies have no inflation protection. Twenty years from now, if care is costing $12,000 per month, you’ll have to pay $8,000 per month from your own money to make up the difference.

I do this type of analysis for my clients every day. 99 times out of 100 these single-premium products are a bad deal for the consumer and a great deal for the insurer.
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@LTCShop,

That's a real eye-opener. Thank you.
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You're very welcome.

Your concerns about rate increases would be valid if long-term care insurance companies were allowed to price their new policies, available for sale now, the same way they priced their policies 10 to 20 years ago.

Fortunately, insurance regulators do NOT allow any policy purchased today to use the old pricing assumptions. To protect consumers purchasing LTC policies today, 41 states have passed strict pricing regulations. The new regulation has helped curb long-term care insurance rate increases because it forces long-term care insurance companies to lower their profits if they seek a rate increase. Even if a rate increase is approved, due to this new regulation, the result to the insurance company is less profits. Which insurance company wants to lower their profits?

Now that’s good news and that’s bad news. The bad news is that a policy purchased today costs more than a similar policy that was purchased 10 years ago.

The good news is that since today’s policies are priced more conservatively they are less likely to have a large premium increase in your lifetime.
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I very much doubt that someone already needing care would be accepted for LTC ins. The older you are the more difficult it is to obtain coverage and the more expensive.
I don't have the skills to work out comparisons but if I was single woman with no children I would feel my best course would be to set up an account as early as possible and keep it for this purpose only.
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I would like to add a few comments. One is that numbers are spouted about that "X% of people will need long-term care, so one had better buy LTC insurance". However, that means (100-X)% do NOT need long-term care, so if that's the case the money just goes to waste. Furthermore, not everyone who is in a facility is necessarily there for a long time--some might just spend their last month or so of life there, so this is obviously a lot less expensive than spending years there--but I doubt any of these companies provide a breakdown of this. Third, many people who don't have considerable assets end up getting support by Medicaid, so they receive care even if they don't have the funds (or insurance) to cover it. Finally, if one doesn't have children (such as in my case), I don't really worry about the possibility of "my last check bouncing"--I'd rather use the cost of LTC insurance while I'm younger and healthy to enjoy life as well as for investing (with the idea that some of this might be needed for long-term care), and if anything is left it can go to causes I choose, and if I don't need long-term care than there is that much more available to give when I'm gone.
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A huge percentage of elders prefer to die in their own homes. So, NO, LTC insurance is a waste of money in those cases.
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Teri4077 Dec 2018
ah, yes, they prefer to die in their own homes. But the data actually indicate that few of us are able to do so.... :(
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From my understanding of long term care insurance, once a person is diagnosed with any dementia, he/she is no longer eligible. Premiums for eligible folks are pretty high if you are past age 50 when you apply. I was told if you are going to get this insurance that you should get it at the youngest age possible. Premium quote for me at age 53 was $6000 a year and that was almost 3 years ago. However, one year in a facility is easily $60,000. It’s basically a crapshoot because you don’t know how long you will be needing to live in a facility. We were told the average time spent in a facility is 2 years. So let’s say I got the insurance at 53 and needed a facility at 73. I will have spent $120,000 on premiums and care at today’s rate for 2 years would be approximately $120,000. In my case, no it wouldn’t be worth getting.
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www.wsj.com/articles/millions-bought-insurance-to-cover-retirement-health-costs-now-they-face-an-awful-choice-1516206708
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