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October 06, 2009

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Did they say why they came up with that $500k asset threshold?

If you have fairly low income then you can't afford LTC. If you have very low assets then Medicare will give you benefits to pay for LTC.

A lot of people do need LTC in old age. 40% of Americans end up in a nursing home for some period.

Another important aspect about LTC is when is the best time to buy it. From everything I see it seems that the best age to buy it is around 60 years old. Earlier than that and you're wasting money on insurance you don't yet need and older than that the policy premium starts to get too expensive.

LTC is more than just for nursing homes. I'm 30yrs old and currently have LTC at an extremely low rate (wife and I combined pay $50/mo). This means that if either one is ever injured/disabled or something else that requires medical care or otherwise for more than 30 days the LTC coverage kicks in and gives us up to $300/day towards the cost. Plus my policy states that if I do not require care for at least 90 days that the limits reset back to zero...while I may pay a premium for that at $50/mo for both of us I think it is more than worth it.

You are more likely to become disabled or in need of critical care than you are of dying and which is more of a financial burden? Dying and losing the income or being injured and not having the income but having mounting medical bills to pay. Don't worry I do have life insurance...oh and we don't have anywhere near 500K in assets and only make (combined) a little more than the national median for household income.

I convinced my step-father to cancel his LTC policy when I pointed out to him that his daily coverage wasn't as much as the nursing home charges, so he'd have to come up with more money each month if he was to go into a nursing home. When he realized that he would have to go on Medicaid anyway he agreed to cancel his LTC policy. So he saved over $100 per month in premiums and lived a little more comfortably. He ended up dying without ever going into a nursing home. He was 85.

FYI. from what I've read the average nursing home stay is 24 months. If you can afford that, maybe LTC insurance isn't a good buy. Of course an average is just that.

Actually Medicare isn't going to pay for long term care benefits unless you've had a hosptalization of at least 3 days preceeding the long term care stay and then they will only cover to a maximum of 100 days. Maximum. Medicaid (medical assistance, title 19, etc.) does provide long term care benefits for thoe that have limited assets and income and the amount you can have varies by state. While it varies from state to state, medicaid generally only pays for nursing home care. There are other waiver programs out there that pay for assisted living and home based care, but those aren't always entitlements and might have a long waiting list. Thus, people can be forced into a nursing home level of care even though they could live in their home at a lower cost to the government if given the proper support.

Generally, when I recommend that people look into LTCI is if they have a spouse or partner. Otherwise you're really just paying premiums to preserve assets for your children or other beneficiaries. Your spouse may actually need that money to maintain them in their home or other community setting.

My partner and I are 50, and I've been thinking about getting some sort of LTC insurance for her. She's a smoker with a family history of heart attacks/strokes. I'd like to get LTC insurance that includes home care - I can't stand the thought of her in a nursing home. Any advice? (Other than getting her to quit smoking, which I can't do.) I on the other hand, am very healthy and won't think about this for myself until I'm at least 60.

Jennifer reminds me of another advantage of LTC insurance and that is that the right covereage will keep you at home rather than at a nursing home. LTC can give you options that you might otherwise not have, besides LTC just like any other insurance is something that you pay for hoping you never have to use it. Is the protection it provides worth the money you lay out...only you can really answer that.

Medicare does not cover long-term care! Neither will your health insurance.

Nursing care is extremely expensive and will leave you impoverished if you have to go into a home for any length of time at all. It also will leave your spouse impoverished. Do you really want your wife or husband to have to live the rest of her or his days in poverty because all of your assets went to keep you in a facility while you were dying?

When my mother was dying in a nursing home, my father met a woman whose husband had been turned into a vegetable by a stroke. He had been in that horrid place for two years. He was never going to recover, but the doctors told her he could live indefinitely. The couple's savings, however, would not live indefinitely: she was spending thousands of dollars a month on his care. When you reach a certain age, you simply are too frail to manage 24-hour care on a DIY basis -- it demands a surprising amount of physical strength -- and you have no choice but to turn to a nursing home for help.

There's also the possibility that you might recover enough to go home...but not, alas, if your home has been sold to cover nursing home fees and you're not even left with enough to cover rent on an SRO. In our state, to qualify for AHCCS (our answer to Medicaid) you must have already spent down ALL your assets, which includes cashing out all your investments and selling your home, your car, and all your possessions. If you have transferred any significant portion of your assets to your kids or to anyone else within FIVE YEARS before you fall ill, you are ineligible for AHCCS (Medicaid) here.

The only way to protect a retired surviving spouse from a lifetime of poverty is to engineer a divorce. Cheering, eh? End a 40-year marriage while one partner is on a deathbed and the other is in a state of agonized grief because we don't have a decent healthcare system to care for people in sickness.

You do not have to possess assets of $500,000 or more to have LTC insurance. My premiums are $75 a month. Obviously, I'd like to spend it on something else--it would, for example, take me out to two dinners a month at a mediocre chain restaurant. But it's not enough to break me up in business, and certainly not such a major expense that it will go to the top of the elimination list when my job ends this December.

As Harry points out, LTC insurance may not cover the entire cost of a nursing home. However, while a single person is in a nursing home, the regular costs of running her house or condo are hugely reduced, automobile costs stop, and the cost of her food is covered in the nursing home fee. Thus most of her Social Security and investment income can go to supplementing the insurance payments. In my case, this will make up the difference handily. My policy, too, can be applied to the cost of in-home care, which is much lower than nursing home care; if I'm lucky enough to avoid institutionalization, the insurance very probably will cover the care I would need in my home.

Both points I wanted to mention were already brought up but I'll say it anyways. The LTC policy give you the option to stay in your home and pick where you go. Those are key. It allows for in-home care and then you can pick the type and quality of facility instead of having the state tell you when and where you will be going. Trust me the quality varies a ton between different places.
Also, you don't necessarily need a huge policy to cover how bad things could get. You might split the risk with the insurance company and say I don't mind paying for some care, I just don't want paying to blow through all my assets. So I'll get a policy with lower limits and share the risk. It's not an all or nothing thing.

LTC isn't just for the married. I got a real good policy at age 54, a Connecticut Partnership Policy, and I'm paying only $77.00 per month.LTC is about choice and quality of life, and my policy gives me choices. Your $500,000 limit is ridiculous.

If you're thinking of getting LTC insurance, do it while you're young and it's cheap. By young, I'm thinking mid-fifties at the latest. My sister in law tried to buy it when she was 56. She'd just had an episode in the hospital with dizziness which they never found a source for. Otherwise, she's very healthy, and after getting out of hospital, never had more dizzy spells--3 years ago. LTC companies ALL declined her application, because no cause was found for her dizziness! Once you have the insurance in place, it won't be cancelled unless you stop paying. But if you wait, you will likely be turned down as soon as any health concerns sprout up.

Medicare might pay for care depending on the circumstances.

http://www.medicare.gov/Nursing/Payment.asp
"Under certain limited conditions, Medicare will pay some nursing home costs for Medicare beneficiaries who require skilled nursing or rehabilitation services."

My understanding is that you have to spend all your own money before medicare will step in to help pay. Its definitely not a preferable alternative, especialy for a married couple.

I used another criteria for myself rathr than ones you mentioned. I was able to obtain it thru m cimpany as a group plan. My thought was that since I am single without children, nieces or nephews, I will need help when I am old. I would like to use some of this to perhaps keep me at home. Other people have a spouse or child.

My parents have both had LTC policies for about 10 years, which brought peace of mind that neither parent would have to leave the house in the event one needed care. Depending on the policy, relatives or friends can provide what's called "informal care" while the insured is living at home. We just used this option on my mother's policy during the last three weeks of her life. I was in the process of hiring in-home care (which is paid at a rate between "informal" and "nursing home" care), when my mother passed away from breast cancer. Because of the coverage the policy provided, my father received about $2500 plus the return of June's premium, for caring for my mom at home for 3 1/2 weeks before she died. This amount doesn't come close to what they paid for her over 10 years, but as with all insurance, you pay with the hope that you won't need to use it. If she had needed nursing home care, they would have recouped the amount paid in premiums within 3-4 months. Nursing homes are incredibly expensive.

My dad is still paying for his policy, and if he runs low on funds, I'll pay the premium so he can go to a nice assisted living or nursing home, if necessary. My grandmother (his mother) was in a nursing home for 3 years for Alzheimer's care before she died, and if Medicaid is your only payer, you don't end up in the best facilities. His mother lived to be 95, so it's possible that my dad could live for another 20 or more years, in which time, he may have spent down his assets and the only option is to sell the house. The LTC policy will help pay for care until the house can be sold to cover the remainder of the monthly costs. Also, in 20 years, I'll be in my 60s, and I may not be able to care for him on my own, and I'm the only child. I don't want the burden of caring for their grandfather to land on my children, who will be in their early 30s then.

There are many considerations besides the cost of the policy. Having options helps the whole family get through difficult situations.

Travis's comment has me confused...it sounds like he is talking about long term disability, which is different from long term care, yes?

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