Author Topic: The value of kids - when parents grow old.  (Read 11539 times)

Offline ExGingi

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The value of kids - when parents grow old.
« on: August 28, 2017, 10:43:22 PM »
I just saw this article on Bloomberg.com, and it struck a chord. I was going to post this in interesting articles, but then decided it deserves its own thread.

The URL is different than the article headline, which is where I got the name for the thread.

https://www.bloomberg.com/news/articles/2017-08-28/this-is-the-best-long-term-care-insurance

This topic ties into the value I find in DDF and DDMS, as it has greatly increased the need for travel in my family in recent years.

The experience DW and myself are having with the older generation, makes this issue something that I think about quite a bit. I actually bought ourselves LTC policies quite a while ago. I wouldn't want my kids to have to deal with anything like DW's family is dealing with. A policy won't change the odds of being in a situation, but it will give a lot more choices and options if/when it comes.
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Offline thaber

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Re: The value of kids - when parents grow old.
« Reply #1 on: August 28, 2017, 10:48:07 PM »
I just saw this article on Bloomberg.com, and it struck a chord. I was going to post this in interesting articles, but then decided it deserves its own thread.

The URL is different than the article headline, which is where I got the name for the thread.

https://www.bloomberg.com/news/articles/2017-08-28/this-is-the-best-long-term-care-insurance

This topic ties into the value I find in DDF and DDMS, as it has greatly increased the need for travel in my family in recent years.

The experience DW and myself are having with the older generation, makes this issue something that I think about quite a bit. I actually bought ourselves LTC policies quite a while ago. I wouldn't want my kids to have to deal with anything like DW's family is dealing with. A policy won't change the odds of being in a situation, but it will give a lot more choices and options if/when it comes.
I think you need to fix the link, but the sandwich generation is no joke

Offline ChaimMoskowitz

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Re: The value of kids - when parents grow old.
« Reply #2 on: August 28, 2017, 11:06:05 PM »
I actually bought ourselves LTC policies quite a while ago.
Can you give some figures like cost and coverage?
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Offline ExGingi

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Re: The value of kids - when parents grow old.
« Reply #3 on: August 28, 2017, 11:53:17 PM »
Can you give some figures like cost and coverage?
The policies I got for myself are no longer available. (Prudential cash benefit).

The industry has changed a lot in the last decade. Some insurers went bust, others just quit this line of business, and the remaining insurers raised rates (mine were raised 2 or 3 times and are still a bargain) and made policies less generous.

I actually think that for many, the best strategy nowadays is to get life insurance with a rider that allows the death benefit to be used for LTC, but one must be aware of nuances, as not all riders are the same. It is important to understand the differences/nuances and how they play out in different scenarios.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline thaber

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Re: The value of kids - when parents grow old.
« Reply #4 on: August 29, 2017, 12:23:11 AM »
Can you give some figures like cost and coverage?
A guy I know, hale and hearty and in his lower 50's woke up one day fully paralyzed. guillain barre syndrome. he had a LTC policy that had no max benefit (they don't make those anymore) and he has become the poster child for every insurance rep I know. they pay for him to have a full time aide for life among other things.

Offline ExGingi

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Re: The value of kids - when parents grow old.
« Reply #5 on: August 29, 2017, 12:40:07 AM »
A guy I know, hale and hearty and in his lower 50's woke up one day fully paralyzed. guillain barre syndrome. he had a LTC policy that had no max benefit (they don't make those anymore) and he has become the poster child for every insurance rep I know. they pay for him to have a full time aide for life among other things.

Lifetime benefits are long gone. I wonder if he had built in inflation protection.

Sure lucky his policy wasn't with Penn Treaty or any other company that buckled.

At first, companies adjusted policies because actual experience was very different than assumptions that went into the design of policies. When the low interest rates hit, companies just had to cut their losses and exit the business.
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Offline shwarmabob

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Re: The value of kids - when parents grow old.
« Reply #6 on: August 29, 2017, 07:24:32 AM »
low interest rates are murdering the insurance companies

Online AsherO

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Re: The value of kids - when parents grow old.
« Reply #7 on: August 29, 2017, 07:33:08 AM »
Lifetime benefits are long gone. I wonder if he had built in inflation protection.

Sure lucky his policy wasn't with Penn Treaty or any other company that buckled.

At first, companies adjusted policies because actual experience was very different than assumptions that went into the design of policies. When the low interest rates hit, companies just had to cut their losses and exit the business.

So people whose issuer went bust lost their policy? Did they somehow get their premiums back?
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Offline ExGingi

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Re: The value of kids - when parents grow old.
« Reply #8 on: August 29, 2017, 08:24:59 AM »
So people whose issuer went bust lost their policy? Did they somehow get their premiums back?
Technically, guaranty associations take over the policies, and people can continue coverage subject to the association limits. And since premiums aren't guaranteed, they can expect major hikes.

See http://www.penntreaty.com/Liquidation/GuarantyAssociationCoverage.aspx or browse around that website for more education and information about what happens when an insurer goes bust.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline ExGingi

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Re: The value of kids - when parents grow old.
« Reply #9 on: January 16, 2018, 08:52:28 AM »
https://www.bloomberg.com/news/articles/2018-01-16/ge-to-take-6-2-billion-charge-after-insurance-portfolio-review

This isn't the end of the story.

Whoever bought short pay policies (especially if they were able to pay for it pre tax as a benefit from a C-Corporation) will be very happy they did (from any strong company that offered them), when everyone else gets double digit premium increases while their policy is guaranteed paid up!
I've been waiting over 5 years with bated breath for someone to say that!
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Offline ushdadude

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Re: The value of kids - when parents grow old.
« Reply #10 on: January 16, 2018, 09:03:03 AM »
The policies I got for myself are no longer available. (Prudential cash benefit).

The industry has changed a lot in the last decade. Some insurers went bust, others just quit this line of business, and the remaining insurers raised rates (mine were raised 2 or 3 times and are still a bargain) and made policies less generous.

I actually think that for many, the best strategy nowadays is to get life insurance with a rider that allows the death benefit to be used for LTC, but one must be aware of nuances, as not all riders are the same. It is important to understand the differences/nuances and how they play out in different scenarios.

But then you would lose the death benefits which is why most people take out life insurance

Offline ExGingi

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Re: The value of kids - when parents grow old.
« Reply #11 on: January 16, 2018, 09:10:00 AM »
But then you would lose the death benefits which is why most people take out life insurance
When would you lose the death benefit?

The bottom line is that insurance is meant to protect you (your wealth) from eroding factors, and not as a windfall.

If you have a combined Life/LTC policy, and G-d forbid experience an event that could trigger LTC benefits, your options would be to pay for the expenses from current after tax income and assets (though if you exceed the threshold you could get a tax deduction on the expenses) or to pay for it from policy benefits (which were purchased at a discount). Either way you would be using up assets, the only difference would be what way is more efficient.
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Offline ushdadude

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Re: The value of kids - when parents grow old.
« Reply #12 on: January 16, 2018, 10:52:48 AM »
When would you lose the death benefit?

The bottom line is that insurance is meant to protect you (your wealth) from eroding factors, and not as a windfall.

If you have a combined Life/LTC policy, and G-d forbid experience an event that could trigger LTC benefits, your options would be to pay for the expenses from current after tax income and assets (though if you exceed the threshold you could get a tax deduction on the expenses) or to pay for it from policy benefits (which were purchased at a discount). Either way you would be using up assets, the only difference would be what way is more efficient.

Makes sense but why wouldn't a separate ltc policy help with that?

Offline ExGingi

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Re: The value of kids - when parents grow old.
« Reply #13 on: January 16, 2018, 11:01:24 AM »
Makes sense but why wouldn't a separate ltc policy help with that?
I'm not saying it never makes sense, but while a separate LTC policy NEVER has rate guarantees (except if it reached a paid-up stage, which is currently generally unavailable), a combined Life/LTC policy would generally have some sort of guarantee. In addition to the fact that it provides 100% certainty of a benefit payout that is (in the vast majority of cases) greater than premiums paid.
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Offline ExGingi

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Re: The value of kids - when parents grow old.
« Reply #14 on: January 23, 2018, 09:46:08 PM »
Makes sense but why wouldn't a separate ltc policy help with that?

And here's another problem with standalone LTC policies (this is at least the 3rd premium increase I've received - still a bargain IMHO, but OTOH I don't anticipate needing any of this for at least another 35 years or more, who knows what will end up happening with it. A combined Life/LTC Whole Life policy has strong guarantees).


I've been waiting over 5 years with bated breath for someone to say that!
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I've been waiting over 5 years with bated breath for someone to say that!
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Offline mercaz1

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Re: The value of kids - when parents grow old.
« Reply #16 on: January 29, 2018, 05:09:27 PM »
shameless plug- If anyone has any questions about LTC or Life Insurance with LTC rider they can PM me as I am in the business.

Offline ExGingi

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Re: The value of kids - when parents grow old.
« Reply #17 on: January 29, 2018, 05:48:05 PM »
shameless plug- If anyone has any questions about LTC or Life Insurance with LTC rider they can PM me as I am in the business.
What LTC coverage do you have for yourself?

I wonder if there's anyone else around here in that line of business, that wants to chime in with insights.
« Last Edit: January 29, 2018, 05:53:26 PM by ExGingi »
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Re: The value of kids - when parents grow old.
« Reply #18 on: January 29, 2018, 06:35:49 PM »
What LTC coverage do you have for yourself?

I wonder if there's anyone else around here in that line of business, that wants to chime in with insights.
Ahem ahem
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Offline ExGingi

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Re: The value of kids - when parents grow old.
« Reply #19 on: January 29, 2018, 06:36:26 PM »

Ahem ahem
Else being the key word.
I've been waiting over 5 years with bated breath for someone to say that!
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