WSJ Article Sort of Slams LTC

[supersupps]

As an agent thinking of doing LTC, Ellen Schultz's article on LTC Can you afford to get older? seems to nail a coffin in the ltc world.
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appeared this weekends WSJ B9

 

[Mr_Ed]

As an agent thinking of doing LTC, Ellen Schultz's article on LTC Can you afford to get older? seems to nail a coffin in the ltc world.
- - - - - - - - - - - - - - - - - -
appeared this weekends WSJ B9

The WSJ wrote a bad article about it.
The LTCi industry is over.
Time for me to sell final expense.

 

[Arthur Rudnick]

Here's the article.....

Can You Afford to Get Older?
​

As long-term-care insurance costs spiral higher, you might wonder if it makes sense to keep your coverage.

Premiums for many policyholders have doubled over the past three years. Depending on a policy's features and your age, long-term insurance can cost $4,000 to $6,000 a year or more.

Yet dumping an existing policy is painful. You will lose perhaps tens of thousands of dollars in premiums paid over the years. And as you get older, you are statistically more likely to need long-term care.

At the same time, the business is becoming less lucrative, causing more insurers to walk away. Genworth Financial, GNW +1.97% the largest seller of long-term care insurance in the U.S., said Wednesday that it plans to stop writing new individual policies in California later this month.

Given what is going on in the overall market, it is more crucial than ever to be sure your policy is worth what you are paying.

The appeal of long-term care coverage is undeniable. Medicare covers skilled nursing care but doesn't pay for continuing care in nursing homes or assisted-living facilities. Nor does Medicare pay for home attendants, who provide personal care, such as dressing or bathing, which can easily cost $400 or more a day.

A spouse or parent recovering from an illness or injury or suffering from dementia could quickly drain his or her savings by paying for help performing essential daily tasks.

A good long-term-care policy can cover a significant percentage of those costs. A bad policy could cost you a small fortune in premiums for coverage so limited it is essentially worthless.

It can be hard to find unbiased advice when shopping for a new policy. Some insurance agents push "hybrid" policies that combine long-term care with life insurance as a way to lower costs. But after fees and commissions, the costs could be the same or higher.

Here are some questions to ask about coverage:
What does it pay for?
Make sure the policy covers care at a range of facilities, including nursing homes, assisted-living facilities, adult day-care and hospices. Newer policies reimburse for at-home care, even if not from a certified health-care professional, while old policies might require the home-care attendant to be a certified nurse.
How is eligibility defined?
An individual might be unable to live independently, but that doesn't mean his long-term-care coverage will kick in. Depending on the policy, a person must be unable to perform certain critical activities, such as eating, bathing, dressing and getting from a bed to a wheelchair. Some policies require that a person be unable to perform six functions; others might require only three.

How much does it pay?
Many people overestimate what their policy will pay. It might cover a percentage of certain costs or a percentage of "usual and customary" charges.
Even if it pays a fixed amount, such as $10,000 a month, the insurer could say that many of the expenses aren't covered and end up paying for only a few thousand dollars of care a month. Also, make sure you understand the "elimination" period—that is, how long you must be receiving care before benefits kick in, generally six months to a year.
For more information on what to look for in policies and questions to ask agents, see the Guide to Long-Term Care, a comprehensive oci.wi.gov/pub_list/pi-047.pdf">report issued by the state of Wisconsin.

Can you afford coverage?
Insurers can't refuse to renew your coverage. But as premiums rise, the policy might become unaffordable. One rule of thumb is that if premiums consume more than 7% of your income, you can't afford them. One way to reduce the cost is to choose a policy that pays for one to three years of care, since most stays in care facilities last no longer than that.

For help in estimating costs, see the U.S. Department of Health and Human Services' long-term care information site.

Should you replace your coverage?
If you decide your current insurance doesn't stack up, make sure you are able to get a new policy before dropping your old one. Insurers can't exclude pre-existing conditions, but they can require waiting periods—and can refuse to cover you in the first place.

For many people, the coverage won't pay off, says Deborah Senn, Washington state's former insurance commissioner. Her uncle bought a policy in his 70s. By the time he needed long-term care in his 80s, he had paid more in premiums than the policy would have paid out for care.

The issue was moot, because the insurer disagreed with his doctors that he had Alzheimer's and denied his claim. He died shortly afterward.
"He never got a dime from the policy," Ms. Senn says.
—Email: [email protected]

Comment:
There have been a lot worse articles over the years than this one. This article (and others like it) means absolutely nothing to policyholders who have gone on claim and received payments. And, those policyholders are the greatest proponents of LTCi.

 

[bluemarlin08]

I read the article and agree with Arthur. Most folks really don't know what LTCi costs. If one thinks the premiums are high, wait till someone needs care and those costs. There is a reason few folks lapse their policies, they see value, they see friends and relatives that need care, some with insurance, most without.

 

[Norwayguy]

I read the article and agree with Arthur. Most folks really don't know what LTCi costs. If one thinks the premiums are high, wait till someone needs care and those costs. There is a reason few folks lapse their policies, they see value, they see friends and relatives that need care, some with insurance, most without.

X2 I am really interest in a former Insurance Commissioner who says her uncle paid more in premiums than he could ever recieve in benefit...I mean assuming 6k per year with costs easily at 100k just leaves you wondering if she is commenting on the fact of had it paid benefits from diagnosis to death it would have been less than premiums paid but that's the same for most insurance types.

 

[ltcadviser]

The Wall St. Journal let this be written? Wow. Just awful reporting. Moronic. Uneducated. Inaccurate. Sophmoric. "Some policies require that a person be unable to perform six functions; others might require only three. Also, make sure you understand the "elimination" period—that is, how long you must be receiving care before benefits kick in, generally six months to a year."

 

[TriciaS]

And the alternative is????????

BTW - I've paid more in home owners, auto & disability insurance than I've gotten in benefit. Should I drop them?