Thoughts on long term care insurance?

[IamMe]

You and me both Vort. It's been a night mare beyond what words can express

[Echo2002]

I wonder in the situation like being in a coma, if you have long term disability insurance, would that person still be able to collect from it? Would you have to have Long term care insurance in a case like this?

[Traveler]

Long term care insurance is protection in the case the insured needs long term home health care, or needs to be in a nursing or assisted living center. I'm in my mid-40s and wife is just 40. So, if we get it now, it's affordable, though a definite dent in the budget. Anyone have knowledge or information about the wisdom of this type of coverage?

The reason that insurance was instituted and thought to be benefit was to gather together large groups of people to cover catastrophic possibilities that would otherwise ruin and bankrupt an individuals and families. Insurance was never intended to cover "common" events that will occur for most of the population.

Logic will easily indicate that common risks faced by the general public will render insurance for such risks, by necessity, more costly than the actual risk.

One problem that we do not seem all that concerned or able to deal with - is that segment of the population that maintains, by choice, a net worth that falls below the the costs of sustaining themselves for common and known risks that we all must face and plan for.

The Traveler

[Echo2002]

That's why I kind of wonder if Insurance companies are going to try to weasel their way out of paying for home healthcare or a nursing home because look at all the people who are going to need it. We are living well into our 80s and 90s now, I don't see insurance companies being able to keep up with the demand. Or maybe they will it will just be very expensive to have long term care insurance.

[skippy740]

Long term care insurance has been vastly underpriced for many years. But insurance companies have to have rate increases as approved by the state departments of insurance.

My personal prediction is that most companies are going to do away with traditional long-term care policies. This need may be met with "Chronic Illness" riders on life insurance policies that allow you to access up to a certain % of life insurance death benefit for the purposes of long-term care needs.

I already know of two companies I'm affiliated with that offer this rider at no additional charge on their permanent life insurance policies.

[Traveler]

That's why I kind of wonder if Insurance companies are going to try to weasel their way out of paying for home healthcare or a nursing home because look at all the people who are going to need it. We are living well into our 80s and 90s now, I don't see insurance companies being able to keep up with the demand. Or maybe they will it will just be very expensive to have long term care insurance.

There are two kinds of insurance companies - in essence they are mutual companies = which are companies owned by the policy holders that by vulture of their policies are share holders -- and non mutual companies = shares are held by purchased stocks.

Insurance companies invest premiums for profit and to cut costs. In the case of a mutual the profits are returned to the policy holders but the point is in who gets the profits.

Despite political rhetoric insurance companies run much better than the government. Some insurance companies run with less then 2% overhead costs - which includes all salaries paid to management and employee for salaries and bonesises. And in the case of mutual insurance companies the rest of the money goes to pay costs insured by policy holders.

I want everyone to take a good look at that 2% number - now realize that on average the government run its insurance - take for example Social Security - with an overhead burden rate of over 60%.

The Traveler

Edited March 19, 2012 by skippy740
reference to current presidential candidate