Ltc < 60 ?

[scagnt83]

There are statistics, damn statistics, and lies.

Saying claims for ages under 59 make up only 5-6% of claims is not much of a statistic without knowing what percentage of policies are sold to those under age 59.

I do know 16.7% of new nursing home admissions in Arizona are under age 65.

Now I'm not advocating anyone should buy LTC at any age. I'm just saying that throwing out statistics without all relevant data is pointless.

The facts are these. There are plenty of permanent chronic illnesses that can strike people at any age. I know plenty of people with MS in their 40's, one that recently turned 30 who was diagnosed 5 years ago. I also know a couple of parapalegics and one quad. Everyone of them could have used an LTC policy.

I think I clearly stated that the decision shouldnt be based on statistics alone, and that the clients overall situation should be taken into account when making recommendations. This is why I stated that I would not go find the studies I speak of, because im not getting pulled into a statistics debate on this, especially when there are other, just as important (if not more) aspects to consider.
You want to pick apart one aspect of my argument and ignore the rest? ... ok.... whatever..

All I know is that as a financial planner I would have a very difficult time recommending LTC for such a young person unless there was some unusual factor involved. The lost opportunity cost isnt worth it.

Deciding to buy LTC is about more than just what are the statistics of a claim going to be at this age. DI and CI are much more important at younger ages and coverage on these generally should be maxed out before purchasing LTC... generally
- - - - - - - - - - - - - - - - - -

I do know 16.7% of new nursing home admissions in Arizona are under age 65.

I dont doubt it. And im well aware of the use of statistics to manipulate an outcome. Which is why I have said multiple times on this thread that the decision should not be based on stats alone...

Interestingly enough, the 6% that I spoke of that are under 60 are based off of group policies.
Individual policies only have around a 2% rate for people under 60; which could mean that they are not being marketed to consumers under 60 as much as worksite plans are.
Basically this means that advisors feel there is not as great of a need for it under 60, but the consumer obviously feels otherwise.

 

[billlacombe]

They are two different animals. Disability replaces part of your income if you can't work. LTC pays for assistance if you can't perform the activities of daily activity (dressing, bathing, eating, mobility, etc.)

You actually need them both but disability comes first during your working years.

One of the threads you read that in was my post about explaining Dave Ramsey's plan to a client. I explained it the way he does (Buy LTC after age 60) which I disagree with. People should buy LTC as young as they can afford it IF they have their other insurances in place first (health, life-if needed, disability).

Absolutely agree. Sign them up as young as possible, if you can. Beware though, young people are tough to convert.

 

[Mr_Ed]

A combination of claims history for carriers, statistics from independent studies, and common sense about the reality of the majority of clients. But ultimately its a case by case call.
The OP was a generalized question, so it can only receive a generalized answer...

There are so many different studies out there Im not going to go find one and give a link, just google it if you want something specific, there are tons of them out there from insurance companies, the government, and independent research groups.
Read the research and make your own conclusions. Or take a CE course or two on LTC, there are plenty of statistics on LTC in them if you pay attention.

Major carriers claims history shows that age 59 or younger claims only account for around 5%-6%. I have been told this from carriers and wholesalers many times before.

Both independent and government studies show that the majority of LTC claims are over age 60.

Time value of money , compounding interest, and the proper allocation of a clients income plays a huge part in the decision as well; and is the most important thing to consider along with a clients current health and any unusual family history.
ex:
- At age 35 a client might spend $200/month for a LTC policy.
That $200/month invested for 10 years (until age 45) at 6% would be $33K in 10 years, $107K in 30 years at age 65 (if LTC was bought at 45 and the $200 was switched to LTC premium).

- At age 45 a client might spend around $240/month for a LTC policy. So If you had bought at 35 instead you would only have saved around $40/month.
This $40/month invested at 6% would only be $40K in 30 years.

Thats a lost opportunity cost of $67,000. And thats only by age 65, it keeps growing exponentially..

Because of compound inflation and the time value of money the younger years are the most important times to save for retirement. Most clients are already not saving enough for retirement.
The majority of 45 year olds are still insurable for LTC, to purchase so early for such a small price difference is irrational in the majority of cases.

LTC would only be appropriate for someone under 45 if they had sufficient LI (term & permanent), DI, HI, is contributing at least 10% of their income to retirement savings, and has a CI policy. Only then would I usually start to recommend LTC if there was money left over.... unless there was some unusual situation with a clients health or family history.

Again, this is all speaking in generalizations. Insurance is a case by case evaluation process.

your argument is ludicrous.

1) What freakingly expensive company are you showing that would charge a 35 year old $200/month for LTC insurance? You've got to be kidding me! Most of my clients who buy LTCi policies under the age of 45 spend less than $100 per month.

2) If this company that you say costs $200 per month for a 35-year old and about the same premium for a 45-year old, you're not comparing apples to apples. Even with just a 3% compound inflation benefit, the 45-year would lose out on 34% growth in the policy over that 10 year period that he/she waited to buy a policy. So, the 45-year old would have to spend AT LEAST 34% more premium to get comparable coverage.

3) If a 35-year old comes to me and wants to buy LTC insurance, I tell them flat out NOT to do it UNLESS they have little to know high-interest debt, they are fully funding their retirement accounts each year, they have long-term disability, they have enough emergency savings, and they can comfortably afford the LTCi premium.

 

[ltcadviser]

If a 35-year old comes to me and wants to buy LTC insurance, I tell them flat out NOT to do it UNLESS they have little to know high-interest debt, they are fully funding their retirement accounts each year, they have long-term disability, they have enough emergency savings, and they can comfortably afford the LTCi premium.

Scott, I am with you. Every time a 25-35 year old has contacted me about long term care insurance I make them SELL ME on why they feel they should have an LTC policy. Because I am sure not going to recommend it or SELL them.

 

[scagnt83]

your argument is ludicrous.

1) What freakingly expensive company are you showing that would charge a 35 year old $200/month for LTC insurance? You've got to be kidding me! Most of my clients who buy LTCi policies under the age of 45 spend less than $100 per month.

2) If this company that you say costs $200 per month for a 35-year old and about the same premium for a 45-year old, you're not comparing apples to apples. Even with just a 3% compound inflation benefit, the 45-year would lose out on 34% growth in the policy over that 10 year period that he/she waited to buy a policy. So, the 45-year old would have to spend AT LEAST 34% more premium to get comparable coverage.

3) If a 35-year old comes to me and wants to buy LTC insurance, I tell them flat out NOT to do it UNLESS they have little to know high-interest debt, they are fully funding their retirement accounts each year, they have long-term disability, they have enough emergency savings, and they can comfortably afford the LTCi premium.

Scott, you are a master of selective reading. Why dont you reread the overall intent of the post, specifically the last paragraph; and tell me how it differs from your conclusion one bit... (LTCI for young people is only appropriate if they have all of their other financial priorities in order.)

You nitpick over premiums for a 35 year old, and cause drama by digging up a 4 year old post.

But all you have done is selectively highlighted portions of a post to misconstrue the actual intent of the post.

Get over yourself.

It doesnt matter if a 35 year olds premiums are $200, or $100.
If they dont have sufficient LI, DI, HI, Retirement Savings, Emergency Savings, etc,; then LTCI is not right for them.... just like the last paragraph of the post you quoted says.

----------

Scott, I am with you. Every time a 25-35 year old has contacted me about long term care insurance I make them SELL ME on why they feel they should have an LTC policy. Because I am sure not going to recommend it or SELL them.

I dont think you bothered to read the entire post that he quoted... if you had, you would realize that he his twisting the point I was trying to make.

 

[ltcadviser]

I dont think you bothered to read the entire post that he quoted... if you had, you would realize that he his twisting the point I was trying to make.

Actually, I did bother to read it. And I may get your point. Yet, Scott can reach his own conclusions.

 

[scagnt83]

Actually, I did bother to read it. And I may get your point. Yet, Scott can reach his own conclusions.

Scott's conclusion was the same as mine except for what he considered a valid LTCI premium for a 35 year old....

He just tried to highlight a few lines to make it seem that I was saying something that I was not.


So I guess you failed to understand what I said; just like Scott did. Because my conclusion was the exact same as what you told Scott you agreed with.....


But Scott has a very long history of selectively quoting people to make himself be seen as "correcting" a post.

He also has a very long history of ignoring facts once presented with them.


Scott has always been an instigator on this forum (especially when he went by NDM). I expect him to selectively read/quote, and to fail/refuse to comprehend what I say.

But you failing to comprehend a very simple post; and furthermore, insinuating that post was incorrect by confirming Scotts post.... is surprising. I have always thought higher of you Jack.

----------

your argument is ludicrous.

1) What freakingly expensive company are you showing that would charge a 35 year old $200/month for LTC insurance? You've got to be kidding me! Most of my clients who buy LTCi policies under the age of 45 spend less than $100 per month.

I most likely used Mass for those rates. But since it was 4 years ago I have no clue... I very well could have picked a halfway sensible number out of thin air... either way the point is still valid (if they do not have other financial issues in order, they do not need LTCI)


But using Genworth:
35yo married couple
$5k/m for 5 years
5% inflation
90 day elim

It is right at $350/m

So $200 per person isnt that far off.



So Scott... do you have any more bs comments to post in a feeble attempt to inflate your ego?

 

[Mr_Ed]

Scott's conclusion was the same as mine except for what he considered a valid LTCI premium for a 35 year old....

He just tried to highlight a few lines to make it seem that I was saying something that I was not.


So I guess you failed to understand what I said; just like Scott did. Because my conclusion was the exact same as what you told Scott you agreed with.....


But Scott has a very long history of selectively quoting people to make himself be seen as "correcting" a post.

He also has a very long history of ignoring facts once presented with them.


Scott has always been an instigator on this forum (especially when he went by NDM). I expect him to selectively read/quote, and to fail/refuse to comprehend what I say.

But you failing to comprehend a very simple post; and furthermore, insinuating that post was incorrect by confirming Scotts post.... is surprising. I have always thought higher of you Jack.

----------




I most likely used Mass for those rates. But since it was 4 years ago I have no clue... I very well could have picked a halfway sensible number out of thin air... either way the point is still valid (if they do not have other financial issues in order, they do not need LTCI)


But using Genworth:
35yo married couple
$5k/m for 5 years
5% inflation
90 day elim

It is right at $350/m

So $200 per person isnt that far off.



So Scott... do you have any more bs comments to post in a feeble attempt to inflate your ego?

scott who?

 

[ltcadviser]

So I guess you failed to understand what I said; just like Scott


But you failing to comprehend a very simple post; and furthermore, insinuating that post was incorrect by confirming Scotts post.... is surprising. I have always thought higher of you Jack?[/B]

I said I got your point. I was not trying to insinuate your post was incorrect. My comment was actually really a response to billlacombe's post about signing people up early and often. Hey, I read some of these posts very quickly often when I am watching college hoops or something. I got ADD too, most likely. Sometimes squirrels run by me. Jeez.