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Subject:  Re: Big Problems wth LongTermCare Insurance Date:  7/12/2013  12:53 PM
Author:  akck Number:  72588 of 88513

One of the things us engineers did was to multiply the LTC premium by the number of (estimated) years until the claim, and then compared that total to the coverage cap.

To lots of us, it was looking like the LTC wasn't so much insurance as pre-paying for the benefits.

I'm retired now. State Farm is quoting me $928/mo for a LTC policy with $300/day max benefit, 90 day elimination period, max 5 years of benefits.

So I'd have to pay the first $27,000 (300 * 90). Each month of premium is equal to about 3 days of care. They'll pay lifetime maximum of $547K (300 * 365 * 5).

I think I'd rather retire with $1M or $2M, and then invest that $928/mo rather than give it to an insurance company.

If I was facing $928/mo for each of us, I'd forgo it too. In my case, the premium starts out at $168/mo for me and $131/mo for my wife (age based). It's a dollar limited policy that amounts to just over 4 years at the maximum daily payout and increases coverage by 5% of the original benefit per year. So at 10 years, we'll be at $300/day.

It's a retirement group policy managed by the state, so there is no overhead for profit in the rates. I've reviewed the actuarial reports on the fund and the plan was solvent in 2009. The 2012 draft report projects it to be underwater. I figure that at most, rates could double. Even if they do, I'd still consider getting it.
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