Reply to Care to share what you (or loved ones) pay for assisted living?

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[quote=Anonymous][quote=Anonymous]This is 21:43.  AARP has a good summary on LTC.  https://www.aarp.org/health/health-insurance/info-06-2012/understanding-long-term-care-insurance.html

Basically, it is expensive, [b]you can expect steep rate increases, [/b]and there are limitations on coverage, either the amount they will pay or a time limit or both. Also in the case of Alzheimer’s, like my dad, triggering the coverage can be tricky.  [/quote]

This is important, and a lot of people seem to be missing it in this thread - starting "early" on your LTC doesn't save you from extreme costs. In MD, the insurance companies just have to go to the insurance commission and get approval for the increase they want if it's above the standard amount - 10%, 15%, whatever - and if the commission approves it, they can charge it to everyone. It's not like term life insurance that you're "locking in" a certain rate for 20 years, etc.

My parents are currently considering an annuity with a LTC rider. What they would do is put in a certain amount of money - probably $200k or so for each - and the rider would provide some LTC coverage. We are doing a lot of research because obviously it's complex, and it's not as great as traditional LTC insurance, but it would help to cover some of the monthly expenses should they need it at some point. With this product, they would get $600,000 in coverage but you are not able to use that however you want - you are only allowed to take $100k/year over 6 years. And they can't really use that unless they've held the annuity for 5 years, which is okay for now because they are still in good health etc. And $100k wouldn't be enough to full cover the cost of care around here, but it's a huge help. There are some decent sized fees on these annuities - of course - but the benefit is that if they don't end up using the coverage, their $200k plus whatever earnings (or loss) they have had is still there, and the money isn't just gone forever. Anyone familiar with these types of products? There are also surrender fees just like with other annuities, but if they wait 7 years, they could take the money out whenever they want without any penalty. And they are not actually annuitizing the money so when they pass away, the money isn't gone to the insurance company. Any other risks I should be checking for? Still trying to decide if it's worth paying the fees for the peace of mind, or just taking the money to directly invest in the market - but the older my parents get, like many others, they appreciate "guarantees" etc vs the risks of traditional investing. [/quote]

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