My wife and I - both mid 50s - have been making some decisions re: our investments and future work/retirement plans. One topic that came up was whether we want longterm care insurance. I haven’t really looked into what it involves or what it costs, but realized I hadn’t really thought about it before.
I assume we could afford the premiums w/o any significant sacrifice. I have a comfortable, secure job, decent income, and decent savings. While I have no short or longterm disability insurance through work, I have nearly a year’s accumulated sick leave. I’m not really planning on retiring until 67.
So what are your thoughts about longterm care insurance? My initial thought is that I’m comfortable self insuring. Philosophically, I’m not a huge fan of decrepit folk being warehoused. Not sure how much I want to live if I need significant ongoing care. I’ve already asked my kids to help me kill myself if I become mentally incompetent. No desire to be a burden/expense on them or my wife.
You need to get “decrepit folk being warehoused” out of your thinking.
Some people will use their LTC in end-of-life scenarios, but it’s much more common that you’ll use it for something that is long-term, but still temporary: cancer, stroke, heart attack, hip surgery, car accident, etc. LTC will cover things like in-home nursing care that your health insurance probably won’t cover. (Your policy will define the details. It’s quite common for benefits to not start until you’ve needed benefits for 2-3 months, and the benefits don’t last forever.)
Your disability insurance through work probably covers lost income, not medical expenses, and it may be unavailable after you retire. LTC is available as long as you keep paying for it, even into your 70s and 80s.
Whether it’s a good deal is up to you, but I’d definitely recommend looking more closely at the details before you make a decision.
Beyond the insurance, if you’re concerned about medical decisions in the future–make a Living Will & look into Power of Attorney. “Telling the kids” is not enough. Sorry–it’s possible they may have quibbles about killing you. Even beyond fear of prison.
Yes, you don’t want to live if your mind is gone. What if you’ve got physical problems but your mind is still fairly sharp? Different care arrangements–at home or in non-warehouse settings–are possible.
That was the message we got at a recent workplace seminar. The coverage available to us (I’m a federal employee) is limited in duration and amount. Basically, chances are that the LTC insurance will be exhausted long before you’re done needing to be warehoused. Think of it instead as a form of catastrophic insurance.
It’s also very expensive. But then again, so is the actual long term care.
I realize I have to do some more research into what types of situations this insurance would cover, and how much it is worth to me to provide what sorts of care should such bad luck befall me.
Have living will w/ power of atty. Obviously not going to write anything having my kids off me. But we recently went thru my MIL’s protracted demise, and spoke openly w/ my kids about me never wanting to exist like that, or be such a burden on them. 2 of the 3 kids expressed their willingness to help me out. Hell, if I misplace my keys, I suspect my son of looking around for a convenient pillow! If I have the physical ability to handle it myself, I hope I do so.
Perhaps a significant part of my confusion is the cheap part of me, not thinking a great deal of $ should be spent on me if I am not working. If I had to retire today, I’d be able to survive in some degree of comfort. Will get a pension and SS in my 60s. Could even draw on them early at reduced rates. And I have pretty simple needs/wants.
But if I need huge amounts of ongoing care - not intended at returning me to some productive - or at least independent- state, well, personally I’m not sure I want that - or think I am worth that. I’m often somewhat surprised at average folk who have something unpleasant happen to them, and think they ought to receive hundreds of thousands if not millions of dollars worth of care. Should the time come, we’ll see if I’m willing to “walk the walk.”
One situation to consider is if you don’t need a lot of care, but you need some relatively small amount of assistance over a very long period. The dollars can add up if you “just” need somebody to help you with bathing, some physical therapy, and meal preparation/housekeeping over a period of ten years. They may be happy and productive years, and still cost a hundred grand or more.
I don’t have a ton of details about costs, but my parents’ LTC insurance has helped pay for caregiver visits for my dad, who has mobility problems due to Parkinson’s disease. It is a big relief to my mom (and by proxy to me) to have someone there to help him wash and get dressed every weekday, drive him to appointments, and so on. He’s still very much all there mentally, but he needs physical help to maintain a healthy and happy lifestyle.
My mom is very happy they got the LTC insurance. So, anecdata, but keep in mind that some LTC insurance can be used while you’re still living in your home.
Well, again, you might want to think in terms of a stroke that will require perhaps a year of re-learning how to walk and talk. This isn’t necessarily you as a doomed vegetable on a ventilator forever, it’s you needing substantial amounts of treatment and physical therapy to return to full function.
I wrote above about my dad - I’ll add that he sometimes says things along the lines of what I think you’re saying here: calls himself a waste of resources, worries about being a drain on society, etc. (He means Medicare - not talking about the LTC insurance here, because he paid those premiums all those years.)
But most of the time he’s happy to be alive and able to do what he wants to do for the most part.
And I’m happy he’s around, too! He has ridiculous (to me) hobbies and projects to work on, and the LTC insurance allows him to do that stuff while being much less of a burden on his immediate family. (It also keeps a number of young people - the caregivers - gainfully employed so they can contribute to society!)
I’d say that the LTC insurance leaves your options open, and making the call that you won’t get/use it closes those doors. Who knows how you’ll feel when push comes to shove?
I wouldn’t touch LTC “insurance” with a 10 foot pole in today’s environment. Unless there are policies out there with a fixed premium and an inability to be cancelled (which used to be possible, but I doubt are now). An insurance policy where the rates are not fixed as you age means it is no insurance at all IMO, beyond each yearly renewal or whatever. And the rates are far too high for the risk most people have of needing long-term care starting in the next year.
Edit to add, in the past LTC insurance was a good deal, but insurance companies lost a bundle so it isn’t much of a deal now. And what happens if a martin shkreli or similar takes over the insurance company you have chosen ? When they simply don’t raise rates out of the goodness of their hearts/because they still want new business, that means if either of those things change, you are super screwed.
I generally don’t recommend LTC to my clients. I despise ‘use or lose’ policies and most of them are like that. When necessary, I either recommend a hybrid policy - the amount not used turns into life insurance - or a early access rider to an existing life insurance policy that provides for LTC as a part of the policy.
The challenge here is that you don’t have a choice about “walking the walk.”
The choice can become draining your money as slowly as possible (which can be darn fast) or killing yourself. But you probably can’t / won’t kill yourself, nor be able to get your doctors to do it for you. Most hospice stays are short, but that’s only because most folks wait until real late to start down that path.
In general insurance of any form is a money-loser. You’re not choosing it to make a profit. You’re choosing it to ameliorate a small likelihood of an intolerable loss. My high-mileage car has no collision insurance. My house has fire insurance. Why is the more likely risk the uninsured one? Because of the size of the potential loss.
My very aged MIL has an LTC policy I bought for her back when she was merely aged. At 91 she lives alone in a regular apartment and has a visiting helper come in a couple times a week to clean, help her bathe, drive her to shopping, etc. She has consumed $140,000 of services over the last 15 years at $17/hour. There is no way she’d have paid that out of her own pocket even though she has the money. Had she not had the help all along she’d either be dead or long since in a facility. IOW, it’s been a good bargain.
A funny thing about the “use it or lose it” feature is she’s scheming on a way to use every last penny before she dies. God forbid a child of the Depression should waste something! Bless her penny-pinching heart.
A couple can face the devastating choice that the first to become chronically ill sentences the second to abject poverty in their end years. That’s a problem worth trying to avoid.
As government retirees, we are eligible for the government’s LTC coverage, which is a menu of options. We factored in our savings and chose a lower-per-day rate, which dropped the premiums significantly.
It might shock you to find out how minor an incident can run into hundreds of thousands of dollars of care. Surgery and rehab for a broken leg did that for me, and that was 20 years ago. My boss’ wife ran up a bill like that with 2 weeks in the hospital for an impacted bowel. We are both more or less fine now.
I was once offered “Cancer Insurance”. Really. Great marketing ploy - use the biggest, baddest fear-inducing word to sell shitty insurance.
I have no knowledge of Long Term Care Insurance.
My immediate response is "somebody has found a new bogeyman to sell insurance - a decrepit old person in a warehouse with no life and no prospect of ever living again.
That kind of image will certainly motivate people.
I’d look real closely about what is required to trip payout - if you have to be determined “disabled” - who is doing that determination?
How long do you have be how disabled before they’ll pay?
I have kidney failure, for now it is stable on the cusp of Stage III and IV (out of 5 - which is “kidney replacement” - dialysis or transplant).
I will never be on the kidney transplant list, so it would be a huge chunk of life consumed by a disease with no end in sight.
I think we’re even on images of “People we never want to be”.
I have at least 5 ways to kill myself should I decide “This far and no further”.
People aren’t supposed to think these thoughts - you can find yourself in an insane asylum if you say this to the wrong people.
My mother died in a warehouse (at least it was in the area she loved) - I don’t remember if it was Medicare or Medicaid (I’m thing Medicaid) would not pay for the warehouse until she was impoverished - the staff knew the “Spending Down” dance very, very well.
I’m guessing that we boomers will change the nature of the warehouses just as we caused a huge expansion of Elementary School, High Schools, Colleges (regional campuses became a thing).
We also caused the huge spike in house prices as we (eventually) started nest building.
Americans are the most over-insured people on Earth. We insure simply everything against everything.
LTC is a bridge you may now say you will not cross. I wonder how brave we will be when it comes down to that self-checkout.
If you find that the insurance only covers an eventuality you will not consider, it is a waste of money.
If you think you might want to go where it requires you to be, it may be a wonderful product.
Sorry, but I can never reconcile these two positions:
“I don’t ever want to be a burden” and, “I’m gonna make my children complicit in offing me.”
Yeah, because that’s not an onerous thing to live with at all! It might be burdensome to have to help you shower but it’ll be a breeze for them to smother you with a pillow?
Tell us, could you have smothered your Mother? Remember you made an agreement, it’s what she wanted! And even if you could, how does one convince oneself that this will somehow be easier than providing her with care?
First, of course, is that most don’t ask their kids to smother them with a pillow (despite the phraseology used when people are giving it a humorous bent), but instead ask their kids to help them commit suicide - by obtaining drugs or some such and the child may not even need to present for the event (distance does tend to make things like that easier). They are asking their child to help them end their own suffering/decline. The decision lies not with the child, but the parent, and the child can know that they didn’t force their unwilling parent to suffer needlessly. Also if dementia is involved, the pain of seeing their parent lose themselves and forget their kids and such is averted. I’m not saying it’s necessarily easy, but it is, I think, very reasonable for that child to not suffer emotional damage because they know they were only fulfilling what was asked of them. And, of course, each person is different. Some would have no emotional distress over having assisted (even if they are distressed over death), some would have temporary distress, and some, no doubt, would have permanent distress - I think it’s up to the planning individual to be considerate and ask those they think are more likely to be okay with it, who can put the responsibility on the deciding party.
Secondly, emotional isn’t the only kind of burden. Even if it hurts to help a suicide, it does mean the child isn’t spending years, sometimes decades, providing time and care to the parent. That can cost a fortune, some retire early to take care of ailing parents (hurting their own retirements), and it can be a huge physical burden to care for someone 24/7, depending on their condition, and lead to their own health declines.
Of course, the burden of prison-time is also one you should want to avoid your kids having.
Well, for the policies I’m in a position to know about the function is either 2, 3 or 4 of the 6 functions of daily living. If your doctor certifies that you can’t perform them yourself then the policy - depending on which one you had - would kick in and start making payments.
If I have the physical ability to handle it myself, I hope I do so.