Long Term Care Insurance scares me.
insurance, n. A thing providing protection against a possible eventuality. Concise Oxford English Dictionary, 11th Edition; 2004.
Auto insurance, home or renters insurance, and health insurance – we understand these policies and know that more likely than not the need for the aforementioned insurance policies will rear its ugly head in the near or distant future so we pay the premium for said policies, hoping we won’t need it, but sleeping better at night because we have it.
Why is purchasing long-term care insurance such a difficult step to take for me and my husband?
- Unquestionably, it’s expensive;
- Fearfully, companies who offer this product are going out of business left and right and may leave us holding an empty bag;
- Definitely, it’s a real difficult type of policy to understand; but
- Undeniably, the financial need for it can outweigh the cost of purchasing it.
My husband and I have still not made an effort to look into it further. Here are my two reasons based on family experience – both of which tend to contradict each other:
My father’s long-term care insurance policy. My father had a long-term care insurance policy for which he paid premiums for at least 20 years – no small amount of money to be sure. He was diagnosed with Alzheimer’s at the age of 84 and died five years later. His care needs at the retirement facility in which he had lived for 13 years didn’t meet the insurance reimbursement threshold until his final month of life. As with most policies, the insurance holder’s care needs must meet a defined level of care before the insurance company kicks in their assisted living care reimbursement payments. When that happens, the insurance holder no longer pays any more premiums. Twenty years of paying premiums for one month of reimbursement benefit.
My sister-in-law’s long-term care policy. My brother and sister-in-law purchased their long-term care insurance policies when they were in their late fifties. Less than a year later my sister-in-law was diagnosed with early-onset dementia and approximately two years later drew benefits from her policy. A couple of years of paying premiums for what will be years of reimbursement benefit. If that isn’t the good news/bad news of long-term care insurance I don’t know what is!
I have no excuse. I know the devastating costs of long-term care because in my past professional life I worked for a senior housing provider and they represented the Champagne & Chandelier variety of assisted living. But even the generic assisted living providers charge high rental rates and as ones’ care needs increase, so do the care fees. This isn’t avoidance behavior on my part and I’m not squeamish about the subject of health and ones’ eventual death. I’m just finding it hard to take this leap into signing up for insurance, even though it holds the assurance of fending off the potential of total personal financial collapse without it.
How are you Baby Boomers dealing with this subject? If you finally bit the bullet and purchased a policy – how did you finally take that leap of faith?
I AM NOT LOOKING TO BE BOMBARDED BY SELLERS OF INSURANCE AS A RESULT OF THIS BLOG ARTICLE SO PLEASE DON’T GO THERE. But I welcome other constructive feedback for those of us on the brink of making this difficult decision.
Living: the ultimate team sport 
June 7, 2012 at 7:12 pm
[…] stand by my earlier article, Long Term Care Insurance Scares Me. Insurers are trying to sell a product for which so few are eligible. I thought I was scared […]
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March 6, 2012 at 2:11 pm
I totally agree and have not purchased long term care insurance. I am not convinced that the insurance company will be there when I need them. If they are there will they pay? Bill had insurance but when he got Alzheimer’s they refused to pay as their own doctor decided he didn,t need the care. A year or more later, they finally started to pay. Bill is 95 years old. So at age 93 he was considered too healthy even though he couldn’t take care of his own medications, meals’ etc.
My parents went into assisted living. It was stressful enough. I wouldn’t want to have been fighting the insurance company at the same time. Instead of paying them, so far I have just decided to save the money for my own needs later. Maybe I will change my mind when I am over 70, but that is my philosophy for now.
Good luck with your decision.
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March 6, 2012 at 4:00 pm
I’m so thrilled that you found my Blog! I can honestly say that this Blog is for all who are interested, not just so that I can exercise my writing abilities – or lack thereof – so it’s very rewarding to have feedback from people such as yourself. I honor you in your caregiving journey with your father. I know from experience that even when Dad lives in an assisted living facility, the primary family caregiver has much to do because the responsibilities don’t end when Dad enters a facility. Your comments about long term care insurance are very germaine as many of us list the Pros and Cons of purchasing that product. Now that I’m a Follower of your Blog, I’m going to very much look forward to reading your articles – both new and in archives. Thank you for your dedication to expressing yourself! Boomer98053, Irene in Redmond, WA and on http://www.babyboomersandmore.com.
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March 5, 2012 at 1:17 pm
As you write, there are conflicting issues. Here are my comments
a. As with any insurance policy there is a contract. Did the agent leave
a summary page with the plan benefits?
b. Did your family members tell you that they owned a long-term care plan.
c. Was it reviewed periodically to be reminded what the plan was designed to accomplish?
d. Long Term Care Plans ARE NOT complicated. What is confusing, and sometimes frustrating, is how it is explained, understood, and remembered especially if purchased in year When and used in Year Now. We forget. Along with that the reasons a particular plan was purchased is usually not explained. What you have is the plan and then the insured or people reading it will apply their thoughts to what a plan should be which is usually different then the reasons and motivations that it was originally purchased.
e. The Carriers, MGA, and Agents market LTC plans incorrectly. What we should do is to explain that LTC plans are owned when they are explained by people who have an expertise. These are plans you you “have to get right the first time” because Age, Health, and Premiums change as we become older. In addition, this benefit continues to evolve which means Plans and Benefit continually change.
f. Whether you own a plan or use your own personal assets — have a plan in place so that if unexpectedly you need care giver services, you will have information to know what to do along with assets to pay for whatever services you need even if you and family want to do most of the caregiving yourself.
g. The best way, to become knowledgable about this — ASK PEOPLE who have been in this situation. What worked, what did not, and if they knew what they knew what would they do differently?
Raymond Lavine
Gig Harbor, Washington
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March 5, 2012 at 2:08 pm
Thank you for your input. As you say in your last point – it’s helpful to ASK PEOPLE so I can receive valuable input that will help in the decision-making process…thus why I put out the call in this blog article. I wholeheartedly agree that these plans don’t have to be as complicated as we make them out to be. Understanding what a person is purchasing and what it provides, and what it DOESN’T provide, are important factors. Policy costs are affected by options: inflation protection, 30-60-90 day waiting periods (where the policy holder pays for the care fees prior to benefits kicking in), etc. I think my husband and I just need to make a concerted effort to research the available companies in my state; check out the Insurance Commissioner’s website and the BBB for notices or complaints; decide what is the best policy we can afford – and then some – and then cross this task off our list of “To Dos.” Your feedback was much appreciated Raymond in Gig Harbor, Washington.
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