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Has anyone here bought a single premium LTC policy?
Your thoughts?
Can you provide some insight as to why you chose that route?
Or if you didn't, why not?
I know people who've gone each route...
I have one friend and her husband....he bought a single premium policy about two years ago, at 55/56. She got hers a few years ago in her early/mid 50s through the federal employees group plan....and after a recent premium increase, she lowered her coverage to keep her premium down.....and wishes she'd gone the single premium, route.
Has anyone here bought a single premium LTC policy?
Your thoughts?
Can you provide some insight as to why you chose that route?
Or if you didn't, why not?
I know people who've gone each route...
I have one friend and her husband....he bought a single premium policy about two years ago, at 55/56. She got hers a few years ago in her early/mid 50s through the federal employees group plan....and after a recent premium increase, she lowered her coverage to keep her premium down.....and wishes she'd gone the single premium, route.
The single-premium LTC products are a great deal for the insurance companies and a lousy deal for the consumer. Essentially, they keep all the earnings on your money. They use your money to pay for your care first. Only if you need care for more than 2 years does the insurance company start to use their money.
The federal employees group LTCi plan is NOT governed by the Rate Stability Regulations that are now in 41 states. The Rate Stability Regulations protect people who buy LTCi policies today.
i agree . they are a poor way to try to get coverage .
they can be soooooo costly because they require so much cash to be tied up .
i can invest my money normally and with just a small portion of the gains buy an actual inflation adjusted plan with lots of perks .
don't forget you give them a few hundred thousand for a decent amount of coverage and they hold all the cards . they can pay you near zero interest on that money instead of increasing premiums . the higher interest rates rise that you are not getting , the more they are actually taking from you in premium
...don't forget you give them a few hundred thousand for a decent amount of coverage
I know I sure as heck am not talking about giving them a few hundred thousand.
The 2 polices I've seen (with 2 companies) are for 75K and buy either:
1) -- an immediate pool of funds worth $255K. Factoring in 5% simple inflation, you get a $516K pool of funds by age 80.
2) -- an immediate pool of money worth $250k with 3% compound inflation, giving you a $495K pool of money by age 80.
And my friend's husband who got one at age 55, only did a single premium of 50K.
I don't know the company, nor what his benefits are, but my friend pulled the paperwork and told me it was a 50K one-time premium.
I would pass but have you considered a deferred annuity that would give you enough to pay for the care if needed? I am not a fan of deferred annuities but it might be an option. My guess is you would not need to annuitize until your 80's and the annuity would pay the rest of your life not just a couple of years. Joint annuity might be the way to go.
it could be a dangerous game trying to time an annuity for insurance .
you could need care at any time not just in your 80's . the annuity is likely not going to increase inflation wise enough to keep up either.
long term care costs have been escalating at over 5% a year .
Agree. I was thinking that if the decision was that the single premium LTC insurance was too expensive the annuity might provide an option that fits the budget.
I suggest you talk with an independent LTC agent that understands both traditional and asset based plans and see which fits you best. Both types of plans have advantages and disadvantages.
You both are wrong if you say that the asset products are a bad fit for everyone. So if one wants lifetime benefits, guaranteed premium, guaranteed benefits and premium returned if not used where do you turn?
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