What are your experiences with long-term care insurance?

I think having LTC is smart, maybe even essential, but I'm awaiting other answers to how to make sure it will meet your needs.

I bought my policy about 15 years ago. I've paid faithfully on it. Last month I got a letter raising the premium 67% And the sad thing is, I'm not even sure it is adequate for current prices. I've got to call the agent and check what is covered.

I hope other people give us some good advice!

I have experience with CNA Jackson which is what my father has. They have been wonderful to deal with so I tried to purchase from them a policy for myself and my husband - we are in our sixties. Unfortunately CNA Jackson no longer offers LTC insurance. My mother who recently passed, had TransAmerica. They were fine but not as responsive or knowledgeable as CNA Jackson. Please let me know what LTC insurance provider you have!

I think a lot depends on what specific needs you are looking to address.

Both my parents had LTC policy's. They cost roughly $5000 a year each and I know they had them over twenty-five years. To keep the premium low they worked out things like a 26 week wait where they had to first pay care out of pocket - although even once a week care qualified. There was also different pay outs based on level of care, i.e. in home vs. nursing home. For instance if my dad was at home with a hired caregiver they paid a whopping $45 a day. In the beginning daddy started with 8 hours a day - so basically less than two hours were covered.

In the end, I'm not sure if it was all the tweaking that rendered the policys fairly useless or if that's typical of the benefits. When you do the math neither parent got back out as much as they paid in. Honestly, I've often wondered if a good investment via a reputable brokerage firm wouldn't have been better.

Not all policies are alike and recently some insurance companies stopped issuing them

My mom's original policy was written in 1991 and she started benefits last year

She had a 30 day waiting period and the policy pays out for a max of 4 years

The unfortunate part is that it pays 60% of her benefit or $90 a day for her memory care which is considered assisted living not skilled nursing which would pay her $150 a day

Her memory care is $330 a day so $90 a day falls way short and we're 15 months into the policy

I'm scared to think of how this will play out if she outlives the policy

I know that many insurers are no longer offering LTC policies. To cover their costs the premiums make them impossible to sell. AARP no longer handles these. Rainmom, the insurance companies need to have lots of customers like your parents, who don't get any value back, and the fact is that there are so many elders that will need the services and too few who won't get their premiums back.

I pay for house insurance. If a tornado hits or a lightening strike causes it to burn down or a drunk driver swerved into my house doing structural damage, I will receive benefits far in excess of what I've paid in. But I hope none of those things happen! I very gladly let my premiums cover the repair of the houses that were in the path of the tornado.

The premiums are based on statistics of how many houses do burn down/get blown away/etc in a year. Not many do, so it works out fine.

But statistics are changing on the need for long term care. Now it is is really more like life insurance -- you know when you sell the policy that the purchaser is going to receive benefits some day.

(Whew! That was a long digression.) Anyway, I too wonder if investing the money yourself makes more sense than turning it over to an insurance company for long term care coverage.

Some rough math

Mom's policy was $440 a quarter so $1,700 a year x 25 years = ~$45,000 in premiums

Benefit = $90 x 365 x 4 = ~$132,000

She has nearly received back her premiums and has the potential to get 3x back over the life of the policy

The above example doesn't take into consideration the time value of money

If you wanted to self insure your own LTC - what would it take ?

Say you want a benefit of $250 a day for 4 years by the time you turn 80 and you are 60 now or said differently, you want ~$365,000 set aside and you have 20 years to save up

You would need to invest $1,100 a month for 20 years and earn 3% to hit your goal

I am already convinced that LTC is worth it based on our experiences. My mom and dad were not savers and spent everything they ever had. When we found out they both had been paying for LTC insurance for 25 years, it was like winning the lottery for us, their children! We had no idea how we would be able to care for them financially - with their LTC they lived in the last few years without worry. The first year they lived at home and had an home health aide come in twice a week for 3 hours each time, completely paid for by LTC, and they loved her. She helped with light housekeeping, meal prep and laundry. It was a God-send. Then when Mom needed more care, their LTC paid a daily stipend for rehab care which helped a lot. When they moved 2.5 years ago to Assisted Living they were able to afford a nice place with both of their LTC's kicking in. Along with their Social Sec and pensions, they had more than enough to live nicely and not go into their savings or be forced to sell assets. I would like to do this for my own children and am willing to have a longer waiting period and a max policy amount just to be sure that I have something that may provide the same relief for my own kids down the road. We are savers, but it's not likely we'd put away as much per month as might be needed. I see it as a supplement to what we have already saved. So can you let me know the names of the company's with which you've had a good experience? I already know that CNA Jackson no longer offers it. My Mom used Transamerica and they were fine. Looking for referrals.

It can vary so much from situation to situation - the math.

My mom paid $5,000 a year for over 25 years. But I'll stick with 25 years for the purpose here.

$5,000 x 25 = $125,00.

My mothers policy paid out a total of just under $40,000. So a loss of $85,000. My mother would have had to live in her current NH another 7 years to break even. Given she was 89 at the time she passed it would have meant making it to 96yrs old. Possible? Sure. More and more, folks are living longer and longer curtesy of modern medicine. Still the odds of living to that age are low.

Ooppps! My bad. Math never was my strong suit. 

Mom would have needed to live another 2.5 years - not 8 - at her NH for the LTC insurance to have broken even. So yep - entirely a reasonable expectation these days. But in the end - still a whopping money loss for her. 

It's a crap shoot, I guess - like most everything else in life. 

This was in a recent newsletter from an elder law firm. It doesn't answer your question of an insurers name but it's another way to look at the numbers.

How Will You Pay for Long-Term Care?
If you’re like most adults you haven’t given this subject much attention. Why? Because it's not something most people want to think about. It’s right up there with giving consideration to making a Last Will and Testament or deciding whether you want to be buried or cremated (or both, i.e., burial of cremated remains).

But now that we have your attention, let's give the subject some thought. There are only a few ways of funding long term care: out of pocket, which means pay out of your assets and/or income; Veteran’s Benefits, if you qualify; Medicaid, once again if you qualify; and utilizing long term care insurance.

Some people think, "I have Medicare, I’m covered." Not so. Medicare may pay a short term stay in a nursing home if you need rehabilitation but there is no long term care benefit with Medicare.

"But, I’m not going to go to a nursing home." A lot of people like to say the same thing, but drop by a nursing home around lunchtime and ask for a show of hands for those who planned on being there and you wouldn’t see many hands. The U.S. Department of Health and Human Services claims that more than 40% of people over 65 years of age will need care in a nursing home.

Nevertheless, let's assume you end up in a nursing home environment someday, as many of us will. How will you pay for it?

We encourage those who can still meet the age and health criteria and who can also afford it to consider buying a long term care policy.

The average cost of a nursing home semi-private room is $5,500 a month in Harris County and it can easily go up to six, seven and $8,000 per month.

You may wish to insure for the entire amount or insure partially. What does that mean?

Well, let's assume you were going into a nursing home which has a current cost of $5,500 a month for a semi-private room.

You could get a long term care policy which insured for that $5,500.

Now let's assume that you want to get your premium lower. You could consider insuring for the difference between your direct income of Social Security and/or pension income and the projected private rate.

So if your Social Security is $1,800 net, you would insure for $3,700 now and make sure to pay for an inflation rider to keep the policy insuring at a rate in the future which is commiserate with the rate now.

Or, you could come up with an option that blended the first two examples.

You insure for $4,500 a month and plan on using $1,000 of your Social Security income, with a plan to use $800 of the Social Security for other monthly expenses.

Other things need to be taken into consideration as well. If there is a spouse at home, it may be better to insure for more, therefore leaving more of your Social Security check for your spouse.

You should consider obtaining at least a five year policy. The average life expectancy is about 2.8 to 5 years once in the nursing home depending on your source statistics. You could consider Medicaid if you outlive the policy.

If you can afford a lower policy and Medicaid is not something you want to rely on, then buy as long of a policy as they will sell you.

Check to see if your employer provides this type of benefit you may purchase through them. If they do, it should cost you less.

Whatever you decide, at least take the time to give it some thought.

Sweeneyn14 - my parents used Northwestern Mutual Insurance.

I have no issues with the company itself. When it came time to activate the policies they pretty much adhered to the basic standard I've heard most companies use. They paid monthly and were prompt. Anytime I had a question I had a specific person assigned to my parents claim.

I would generally recommend them. I think the issues I had with the policies were more in how they were written up - which I assume was my parents and the agents doing. However - I don't know that for sure. Still, if I were to buy a LTC policy for myself I would look there first.

My almost-91 year-old mother has a LTC policy from Allstate that she’s had for quite a while. They don’t write them like this anymore. I don’t remember what her premiums are, but she (heirs) gets them back if she doesn’t use the policy. When my father died six years ago, she got over $38,000 back in unused premiums (he never used the LTC insurance).

Here’s the potential payout: in-home help payment currently $113/day paid to her for 1000 days, 30 day exclusion period.
In-facility payment currently $226/day paid to her for SEVEN YEARS, 30 day exclusion period.
These daily payments periodically go up. My mother has currently paid ~$38,000 in premiums (which her heirs get back if she doesn’t use; if some is used, heirs get the remaining premium amount).
Total potential payout (conservative, not taking into account future daily payment increases) – nearly $700,000. !!!!

BUT…I recently found out that even if my mother needs help with two of the important ADLs at an Assisted Living facility, the policy won’t pay out. The agent explained to me that my mother’s policy will only pay out for a facility that is qualified as a SNF/nursing home. Apparently newer policies do allow payment for an AL facility.

I’m sure they make it very difficult to ever start this golden payout. Medical records and a record of care get sent to some office in another state, where a determination is made.

My mother has stated she never wants to use the policy. (And I have told her I will not be her personal care aide.) She thinks she is more "independent" than she is. She denies her failing abilities.

I suspect she will never use the policy. But at least her heirs get the premiums paid back, which I think is very unusual.

I bought a policy where I couldn't loose because my in-laws policy which was good when they bought it turned out to not be helpful 15 years later.
Long story short . there are policies and I encourage you find a policy like mine. I made a one time premium payment and it allows me to #1) get all your money back (with out any interest) for several years after making your payment (mine and my wife's policies have a return provision for 13 and 15 years return feature). #2.) it pays up to a monthly amount for "x" number of years. Mine is $2850 a month for 6 years. However If I take half that ($1425) it will last 12 years. #3) IF I never use the long term feature and I don't take my money back there is a life insurance feature that exceeds my premium amount. SO for me, knowing that I or my heirs will never loose the premium amount I paid made this policy a winner. ALSO make sure your policy allows payment for in home care as well as facility care. Be sure home caregivers don't have to be CNA or work for a home agency. You can hire people directly cheaper than going through an agency and that may be adequate for your situation.

My sister has been paying for a long term care policy for 20 years now. I chose just to put funds into a special saving account. Most long term policies provide only a portion of the cost for each day. Made an excel chart to show costs over the years. Right now I am ahead, and as we both age and just hope we never need it.

My dad and stepmom went with CalPERS about 17 years ago; premiums had risen to about $4000 a year before my dad was moved into assisted living--and then a 24/7 nursing home--last year. A bit confusing to get the process started (eg, the 90 day waiting period and not knowing when the first check was going to arrive) but since then has been relatively smooth. I send Dad's nursing home the 1st of the month and get a check for the previous month about 10 days later.

Oh, and my partner and I applied for LTC after things started going downhill with my dad; we were both 51 at the time. He got approved through Genworth (~$1500/yr, I believe). I, unfortunately, was turned down due to my leaky heart valves, and my financial planner ran the numbers and believes I should be ok without one (but I may reinvestigate once said valves are repaired or replaced).

Mark47, What company issues your policy?
My husband and I have considered LTC ins occasionally over the past few years; and every time, we decide the premiums are too high for the potential payout.

My experience with LTC insurance was with my sister and BIL. They bought it probably 25-30 years before they needed it; and back then, the premiums were much less than now. Sis was happy they had it. But she died b4 they collected on it, and her husband was in a NH that was about $10-12,000 a month--he was on a ventilator. After her death, he wanted to come home. Although the cost of his care at home was more than at the NH, the amount the LTC insurance paid for in-home care was less than for NH. In the end, the LtC policy paid out about the same amount they had paid in premiums. I think theirs was Jackson Life. Or maybe John Hancock. But the policies offered change all the time, so you just have to shop.
The last two times we considered LTC ins, we decided that buying into a CCRTC was a better investment for us.
But, I'd be interested in one that returns your premiums--provided it's with an insurance company that seems solvent. However, I wonder how they could remain solvent if they're paying claims AND returning premiums. Hmmm.

Wow--I am woefully ignorant on this subject. My younger brother has POA and deals with all Mother's money stuff. He keeps the rest of us up to date.....sort of.
Dad was bedridden with Parkinson's --saw how awful this was for all of us--and then purchased a LTC policy for Mother, so we wouldn't have to care for her--it will never be used. I know it was expensive, and I know she hasn't missed a premium, but other than that--I don't know...will it pay her estate back for the premiums she's paid for the last 25 years?
As for us, as we near retirement, we CANNOT get a LTC for my hubby, he is a liver transplant recipient and once an ins co hears that they close up shop and RUN! It is the "plan" that I will care for him at home until he dies. We have plenty saved for retirement to live more comfortably than we do now!! (Due to the fact that hubby has no idea what it costs us to get by, per month, so we saved a LOT. Also we didn't think SS would be around) Essentially, we're self-insured. BUT--we started saving 20% of our incomes waaay back in our 20's...At some point, a LTC policy would likely be so expensive it couldn't be managed.....One thing I KNOW. I WILL NOT move in with one of my kids.

Give Thrivent a look. We have had a great experience both personally and other family and friends with their LTC policies.

Before deciding on your long-term care insurance, make sure you know how much and what they cover and know what is the grace period whether it be 30 days or 90 days because before the insurance kicks in, you will have to pay out of pocket.

Look into a whole life policy with a long-term-care rider.
Good luck. Laura

Rainmom put her finger on it - insurance is pretty much by definition a crap shoot. You bet one way. The insurance company bets the other way. Placez vos jeux messieursdames...

My only direct experience of LTC insurance in practice came from my great aunt, who acting on her bankers' advice conscientiously paid her premiums for about twenty years. The benefit paid out - and I overlook here the paperwork and arguing involved, which she would never have been able to cope with unaided - didn't begin to cover her facility's fees; but fortunately she hadn't really needed the insurance in the first place.

Insurance that will cover all the costs you are *likely* to have to meet will be very expensive. But say, for example, that you wish to be absolutely certain that you will never have to leave a particular continuing care facility, and you want the security of knowing that come what may you will be able to meet the fees even if you break world records and live to 130.

You can buy insurance products from reputable companies which will do that. They will cost a heck of a lot of money. But if you try to skimp, you risk that:

your insurer is dodgy, and may go under - leaving you with no cover at all, or only what is provided for in your country's consumer protection legislation;
there are large excesses, or important exclusions, or restrictive terms;
the benefits are most unlikely to meet the rising costs of care in the future.

Guessing future care costs is actually the most difficult and hair-raising bit. Supposing we think, here in 2017, "well it'll never be more than $30,000 a month, surely!" Don't you believe it. Just glance back at what we thought was a lot twenty years ago, and see how it compares with today's reality. Moreover we've got a bit too used to low inflation and low interest rates. God forbid but that could easily change before it's our turn for the NH.

I know of one care provider (I'm sure there will be others) which is set up as a charitable foundation and has done a deal with an insurer to provide a bespoke policy based on an annuities model. You pay a staggering amount of money as a lump sum, but in return they undertake to pay your fees indefinitely either through the income of the annuity or by making up the shortfall from the foundation's own funds. Nevertheless there is also a clause requiring family members to contribute if they are able to - which is why my sister ran a mile, screaming, from the very idea and ignored the point that she couldn't be forced to agree to this contract if she didn't want to and if the foundation then wouldn't accept mother so be it. Her other objection to the scheme was that mother might die too soon and then, I quote, "the money would be wasted."

I won't go into that bit...

Long term care insurance is a good idea. Start young. Choose very carefully, and compare several policies from a range of providers. Expect to have to supplement it when the time comes.

Single premium $150,000 life insurance policy cost me $140K at age 63 includes $6,000/mo benefit, 5% inflation protection, lifetime payout. About half this was the underlying policy for 25 months, the other half covered the inflation protection and lifetime payout. Don't recall if it might be 60 days before they start paying out. If I never use it my heirs get $150,000. When my hubby was diagnosed with dementia this was one of the first things I did for myself. That's when it was costing me $6,000/mo. Now it costs $15K/mo (because I am keeping him home and increasing his care as necessary). So far hubby has racked up about $900K for 7 years of 24/7 at home round the clock professional care (at home) without LTC insurance. The trouble with thinking you can self-insure is that dementia can go for years and years and years....If I have anything left when we're done with this I plan to get myself into a CCRC I can afford. My understanding is I can combine my insurance with the CCRC, probably depends on the place I choose. My policy is with Transamerica. What I did was to call Dave Ramsey and get a recommendation for an agent who was one of their "endorsed local providers". Then I studied it pretty thoroughly before buying. I bought the lifetime policy because if you need it you really need it, I paid the single premium because I could and didn't want to worry about it, I threw the inflation protection in there for obvious reasons. Finally my thought on insurance is that it is for disasters, not for investment. We all pay car insurance but don't expect to get our premiums back. We all pay for our medical insurance but don't expect to get our premiums back (well, some people do). The point of insurance is that the cost of something which would wipe out one person is spread out over a group of people. By definition that means that most of us with LTC insurance "won't get anything out of it". But--that's GOOD news, isn't it????

My parents bought such a policy back in 2000.

They started receiving benefits last Sept.

In those 16 years...they paid over $600 per month.

Had they saved that money in even a modest interest baring account...they would have been better off today.

But.... what if they had needed those benefits after paying only 5 years instead of 16? The policy would have worked to their benefit.

That is the nature of insurance.....you can't just get it when you need it...and you cannot know when you need it.

BTW.... the policy is the Bankers Life. They have been quite good and helpful with getting benefits going and taking care of what they signed the policy for. I do not know how to stack up with others....but they have been good to us.

LTC policies are quite varied and confusing. My friend's father got basically no benefit from his, but my aunt and uncle who moved to AL about six months ago have a good policy. It is through Thrivent, and I don't know anything about the premiums or how long they have been paying them, but because they are both covered it is paying almost the entire cost of AL for the two of them. According to my cousin, it is unlimited and will pay out as long as it is needed. Whether they will get back all that they paid in remains to be seen.

In August of 2012 there was an article in Consumer Reports discussing LTC insurance. It includes several charts showing how premiums differ with different coverages and waiting periods. It also stated that people with more than $2.5 million in liquid assets don't need LTC insurance and people with less than $500,000 in liquid assets probably can't afford it. If you fall into the second category, your LTC insurance is likely to just postpone your Medicaid eligibility date, thus saving taxpayers' money, not yours.

I bought a group LTC policy about 20 years ago for both me and my husband, who died before using any of it. They raise premiums every 3 years if you want COL increases in payouts. I can decline to pay the increase but if I decide later that I want it, I have to have a MD statement that I am not ill or in need any time soon. However, there is a lifetime amount it will pay out, probably about 3-4 years. CNA isn't writing long term care any more. I also have a NY Life combination life insurance/LTC that was paid for with about $68,000 up front. If never used for LTC, then my heirs get $100,000 in insurance. I have a fairly good income with three pensions plus social security and an IRA, so that plus the CNA policy should support my care first, and I hope I don't live long enough to have to use the NY Life policy. I feel secure enough to spend most of what I get now on travel and a very nice apartment, knowing that I have provided for my own LTC about as well as anyone could.

Be prepared to sign permissions for LTHC companies to examine medical records. Know beforehand as much as possible what their "Tiers of Coverage" will take care of. Know what the company's definitions of memory-care vs mental impairment are. I was surprised (15+ years ago) how many companies quibbled about my parent's macular degeneration vision issue. Also, a policy bought 15+ years ago "maximum daily benefit" is barely keeping up with today's prices. Inflation riders are barely keeping up either. LT ins bought/sold back in the day is not enough now if you are looking solely at using a LTHC policy to cover most everything.
Don't wait -- haul that paperwork out now with a calculator and some research and find out where you stand if it had to be used right now.

We just had a meeting with a long term care insurance broker who specializes in finding the best policy for your needs. He pointed out the 4 core decisions we need to make: 1) the monthly benefit needed ($1,500-$15,000); 2) the minimum benefit duration (2 - 10 years); 3) The Elimination period ( 0 days - 365 days); and 4) Inflation protection (none - 5% compounded for life).     The broker represents Newman Long  Term Care and that is all they do.   www.NewmanLTC.com;  800-625-9267.

He left us with examples from 3 different companies: Genworth Privileged Choice Flex 3, Thrivant and Mutual of Omaha Mutual Care Secure Solution. To provide $3,000 a month for each of us with a 90 day waiting period and 3 year pay out with a 3% Compounded inflation protection would cost us $6,823.34, $7,228.98 or $6,057.14 a year for the two of us depending on which company we chose. With our monthly retirement income of $5,000 a month, adding another $6,000 or more if both of us were in a facility would be $11,000+, which just about covers things if the needs aren't too great. We have other sources to tap as well if needed (Annuities). We have to answer those 4 basic questions to help guide us. We can sell our home and live more cheaply, too, if necessary. At age 73, our costs are already higher than if we had started this at a younger age. And, they are checking our health history to gauge whether they want to insure each of us or not. If you have something that will become debilitating and require care for a long time, they may choose not to insure you at all.

My father has an Allstate policy purchased in 1991.
We had to put him in Assisted Living last month.
His policy states it covers nursing home care: nursing home defined as
1)licensed
2) provides 24/7 nursing care
3)maintains daily records.
I called our claims adjustor 4 times and was told AL will be covered as nursing if it meets the definition. Now that he has moved in, I have been told that Allstate " has changed their mind!"
We are now in a legal battle . I thought LTC was a good idea, but now not so sure.
If anyone knows how to fight this , please let me know.
Ps. His policy pays ( supposed to pay)
$330/ day for seven years. !

Badandy,
Assisted living generally is not defined as skilled nursing - does dad's policy have any riders for assisted living or home care?

Mom bought her original policy in 1991 too and these concepts were written in her policy but not with Allstate however

Have you contacted your state insurance commissioner?