I am trying to educate myself on LTC insurance for me and my wife. We have term life and whole life for our needs. We don't want to use those riders and want the DB to be there for the beneficiaries. Do stand alone LTC policies make sense for us, how do they work and what would be the premium/how much would they pay out? Any help is much appreciated. Thanks
LTC Insurance
- Thread starter pk001
- Start date
- 2,291
Generally, you pay a premium for a set level of coverage. If cost of care is expected to be 80K per year and average life expectancy in LTC IS 3 years, you would insure for 240K. Once you reach a level of disability defined as ADL's, meeting 2 ADL's, you could start a claim against your policy. Newer policies are hybrid LTC and Life products. The difference is standard policy may never pay if no LTC need before death, hybrid pays LTC costs or a death benefit. Rates are based on age and health
- Thread starter
- #3
- 2,291
The hybrid plans usually want 100K as a buy-in. What ages are you and your wife? How is your health
Traditional policies can absolutely make sense for you. With a traditional stand-alone policy, you elect your benefits at the outset:
- Monthly Benefit ($3,000-$12,000)
- Benefit Period (2 years, 3 years, 4 years, 5 years, 6 years, Unlimited) (Individual or Shared)
- Inflation Protection (3%, 4%, 5% Compound)
- Waiting Period (30 days - 90 days)
Your premium is guaranteed renewable, meaning that the insurance company may not cancel your coverage as long as you pay your premium. Your premium is not guaranteed, however. Your insurance company may request a rate increase if needed. Rate increases on current policy series issued in past 10 years have been very infrequent, if not non-existent for the most part. Premiums are typically paid on a monthly or an annual basis.
While most companies require annual premiums for life, there are 1-2 companies that will allow you to pay up your premium over 10 years and there is 1 company that will offer you as a single premium payment option.
As long as you pay your premiums, you will have coverage in-force.
Traditional long term care insurance policies are similar to your auto insurance, homeowners insurance, and health insurance. There is no cash value.
As with your auto or homeowners insurance, if you do not make a claim on your policy you will not receive any benefits (actually a good thing).
Traditional long term care insurance premiums are often affordable and attainable through this “pay-as-you-go”. approach.
Traditional LTC policies are able to be completely customized. You may elect from a multitude of benefit periods, elimination periods, & inflation protection options.
If inflation protection requirements are met, traditional policies will also offer you Medicaid asset disregard benefits through state LTC partnership programs.
Traditional "pay-as-you-go" policies are just one avenue for you to explore when you are considering your long term care planning needs.
You may also consider hybrid long term care insurance policies, which are extremely popular today.
Hybrid long term care insurance policies combine your long term care benefits to a cash value policy such as a paid-up life insurance policy or an annuity, for example.
Unlike traditional policies that generally have a "pay-as-you-go" approach, hybrid insurance policies often are funded with a one-time single premium up-front such as $50,000 or $100,000, although the policies are becoming increasingly more flexible today with their funding options. With many policies today you can also make installment payments over 5 years, 10 years, 20 years or to Age 95 or 100.
Similar to the design of traditional LTC policies, most hybrid long term care policies will provide you the ability to elect your long term care insurance benefits at the outset, i.e. monthly benefit, benefit period, and inflation protection. The elimination period will be typically be fixed by the insurance company, however, usually between 0 days to 90 days.
The appeal of the hybrid policies is that your premium may be guaranteed to be returned to you should you never need to receive long term care.
You avoid the inherent "use it or lose it" nature of the traditional LTC policies.
Also, your hybrid policy premiums are fixed, and are guaranteed to never be increased. This may be important for you if you want to be able to control the cost of your plan.
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The cost of a long term care claim can be significantly more than $250 -$300k and can last much longer than 3 years. You can buy Lifetime unlimited LTC benefit periods to address the catastrophic risk if you are inclined to do so.
kpbdy99
Super Genius
- 160
The most EFFICIENT way to buy LTC protection - every time, hands down - is stand-alone LTC insurance. By most efficient, I simply mean the fewest premium dollars in will get you the most true LTC protection out. Additionally, with stand-alone LTCi, you have access to LTC Partnership protection in a worst case scenario. The Partnership program will give you additional asset protection if you need to apply for Medicaid financial assistance after your LTC policy benefits are exhausted. Hybrids are excellent products, but they cost more, they give you less LTC protection, and you already have life insurance.
Find a good, independent agent who can help you understand all this stuff.
Find a good, independent agent who can help you understand all this stuff.
- 10,695
Go to LTCAdvisers website ( Long Term Care Insurance Reviews, Ratings, Quotes & Expert Advice - LTC Partner ) and give him a call. He is an educator, not a salesman. (yes he is an agent) Imo, he is an expert among experts when it comes to LTCI.
His website is also a wealth of information. As an agent I've used it a few times to find various info myself.
- Thread starter
- #9
I am hoping that we can self-insure this need(fear, if you will). All insurance needs are based on fear. At this rate, all our money will not be enough to buy insurance for all needs. There's disability insurance, critical illness insurance and I think, even separate cancer insurance. Latest trend seems to be tie up everything to the S&P. Imagine health insurance also being like this. You go to the doctor on one day and the insurance will only pay for that visit, if the stock market rises that day, lol!
Maybe, I am missing something but I just started looking into this. Thanks for your posts.
Maybe, I am missing something but I just started looking into this. Thanks for your posts.
