Is long-term care insurance mostly a rip off?

LTC insurance used to be much better than it is now. I think these policies started to get to expensive for insurance companies to keep offering them. Note that as you get older, the premiums on these policies increase, so that people are often forced to give up on them before they ever get any benefit from them. So, yes, I think they are mostly a ripoff.

For those looking to purchase LTC insurance, you may not be eligible if you have health conditions. Many years ago, we were taking out additional insurance from my husband's employer and one of the things his contact asked him about is if he would be interested in LTC insurance. My husband agreed to look into it and applied. At this time he was in his late 30's and had diabetes and high blood pressure. He was turned down because they said he was too much of a risk.
A few years later, I worked for a financial planner with one of the largest companies in the U.S. One of his clients informed me that her sister (also a client) had purchased LTC insurance and the particular plan had so many stipulations that they did not feel it was worth the preminum paid. Read all the fine print, make certain you realize what the premiums are and if they change coverage at a certain age. And if you are in a nursing home and someone is telling you that you or your family doesn't qualify, ask someone else...then ask their boss..then ask again...then call the company (in other words be the pain in the well...ya get the picute). ;)

Kedwards, I am sorry you are havingso much trouble with your Mom's LTC carrier. Have you spoken directly with the insurance agent that sold her the policy? I worked for a Life and LTC agent for 15 years, and I know there are a few highly rated and reputable carriers out there. The agent should be able to answer your questions as well as directly intervene with the carrier regarding the coverage issues. If that does not work, you might try contacting your State Dept of Banking and Insurance, because insurers are very highly regulated and they want to know when companies are defrauding consumers. I have been touting the benefits of LTCI on various threads and am a firm believer that it is better to pay even $4000 a year in policy premium rather than $4000 a month 'rent' to a nursing home. The really good policies give the same amount of daily (or monthly) benefit for NH care as well as Home Care, which if utilized, allows the Senior to age in place as long as possible. I have personally witnessed this aspect of coverage for 3 seniors, which enabled them to remain at home with virtually round the clock care, thanks to the high LTC benefit amount they purchased years ago. The major carriers in the LTC market have been John Hancock and MetLIfe. Genworth has also been a major player, but I'm not sure they are still in the market. First, make sure you find a well qualified agent who has earned the "CLTC" designation. They have to comply with ongoing continuing education to maintain the designation. AC has information regarding LTC insurance under the 'Money & Legal' tab, then 'Insurance Matters'. Just FYI, although I have no idea who he is, I was surprised to see Scott Olson, "CLTC" offer factual information regarding this issue that we all can use. Thanks, Scott.

Thank you danaisle for your answers!! The neurologist appt. is in one week.

When a claimant is diagnosed with dementia ("cognitive impairment"), it usually trumps the "activities of daily living" requirement. Once the neurologist verifies the symptoms, she should qualify for in home care benefits. More than likely, she'll then be evaluated by a nurse to determine a plan of care. That's what happened with my mom and her policy. Good luck!

That is what my mother's LTC will do after she has had the evaluation by a neurologist. They will send someone to her house to evaluate her needs. I do not know about the elimination period prior to being placed in a SNF but our hope is to keep her home a while longer with home health care.

The reputable companies send someone to evaluate the claimant and develop an appropriate plan of care. They often have elimination periods where they prefer the insured receive in-home care, after which they'll pay for care in a facility. If they haven't offered to send someone to do an evaluation, you really should ask. You can also talk to the broker who sold the policy to your mother. Good luck!

My mother's LTC policy requires that she not be able to 2 out of 6 ADLS. Her agent did tell us that many insurance companies that sold LTC policies went broke and therefore forfeited on the policies. I think it is best to talk with an Elder Law Attorney to help make this decision. My mother can feed herself, but I do know that she is not always eating like she should because making herself meals is getting too complicated for her to figure out. I think that would count as 1 ADL, plus she is not bathing herself regularly because she probably forgets due to the Alzheimer. I think that too would count as another ADL. She needs assistance with both of those activities for daily living. We are currently waiting for a neurologist appt. with her for an evaluation then we will be contacting her LTC policy. I'm hoping it works out!

In my experience, my mother's LTC policy with Genworth has been a HUGE help and I would have a hard time affording care for her at the level she's receiving without it. My mother has dementia and psychosis and lives in a group home. About 80% of her monthly expenses are covered by her policy. Genworth is the most reputable and well-established player in this field. My husband and I have our policy with them. I hope I never have to use it, but if my husband or I get sick and need long term care, it will help to keep us from being wiped out and enable us to get services we need to maintain some quality of life.

I am thinking of buying a LTC policy but after reading your reviews it scares me. I can get one through the government which is cheaper but doesn't have the options that Transamerica has like when someone dies before 65 you don't pay their cost. Etc. I really don't trust Transamerica. Something about their plan. Which one would be better Scott or someone that know about LTC. Thanks.

John

We had a hard time getting Banker's Life to pay. Nothing as ridiculous as no pay until can't walk of feed oneself, just deliberate hold-ups on the paperwork front that would leave many if not most unassisted elderly unable to navigate the mess. They routinely sent letters saying they needed more information - just that vague, and most of it had actually already been sent - with implications that the other party would have to take care of it, so the one receiving the letter would tend to do nothing. I involved the state insurance comission, writing a long letter and putting cc's to them and to mom's estate planner lawyer (even though she would probably not have done a thing to help us if we had gone to court - was actually out-of-state under some kind of contract with the Puritan company, where they still billed us for any requests or conversations! - which had botched up the Medicaid aspects of the plan big time - long story there.) My mom thought it covered a lot more than it did. We eventually got the total $ 18,000 out of them but it was not easy, and not enough for real long-term care coverage. Beware of policies that SAY "This is not long-term care insurance." Beware of darn near anything that is cheap and/or sold by sweet-talking well-dressed flattering SOBs who make you feel good in order to get you to say yes and sign on the dotted line.
John Hancock's policy looks better, and the one I got through CNA at work is reasonable. You may do best with a reputable independent insurance specialist who understands the ins and outs of things.

I am sorry to read such bad and sad news. However, I have a good story. In 1996 my mother bought a policy for long term care with riders for home health care, home builder care and for not paying any more premiums once she was in a nursing home. There was a long list of criteria for each of which she only had to meet 2 or 3 which was not hard at all. The company is now known as S.H.I.P. and has already paid more for her care than she ever paid in premiums, plus she is not paying any premiums which have flown up very high. Because she has to be in a semi-private room, not all is covered, but her estate and the earnings from her securities take care of the remaining $2,300 a month.

The federal government recently did an audit of the claims practices of 7 of the leading long-term care insurers.

Scott

Thanks Scott. I'll look into it.

Long-term care insurance is a highly regulated insurance product. Most insurance products are only regulated by the state in which the policy is purchased. LTC insurance is regulated by both federal law AND state law.

The benefit eligibility requirements that I outlined above were made into law in 1996 by the federal government. These benefit eligibility requirements are REQUIRED in every policy that meets the federal guidelines. These requirements are not just for "cadillac" policies. EVERY LTCi policy that meets the federal guidelines uses these same benefit eligibility requirements. About 95% of the long-term care policies that have been purchased meet these federal guidelines.

Whoever explained your mother's policy to you, doesn't understand how your mother's policy works. There has never been any LTCi policy sold that would use language in it like you've described. A policy like that would never have been approved by any state department of insurance because a policy like that is useless.

Scott

Well, scott that may be true for everyone on the planet but my mom but I doubt it since I've been hearing horror stories @ LTC from other people in the same boat as myself. Mom seems to have gotten a policy that only meets the criteria I mentioned. I understand that there are "cadillac" policies that cover more but that is not the one my mom has. In short she has to be a complete and utter vegtable in order for any of the LTC to kick in. Any other assistance that she pays for that she gets from outside help (when I'm unable to do it) she can deduct from her income tax according to her accountant which is good (glad to find that out).

@KEdwards460,

You are mistaken about the benefit eligibility requirements for long-term care insurance.

There has never been any long-term care policy that was sold that required that one to need assistance with walking and eating in order to be eligible for benefits.

The eligibility requirements for long-term care insurance are regulated by both state and federal law.

The requirements to be eligible for benefits are needing assistance with any 2 of 6 Activities of Daily Living (aka ADL's). The 6 ADL's are: bathing, dressing, eating, toileting, transferring and maintaining continence.

If your mother can't walk without assistance, that would imply that she needs assistance to bathe, she probably needs assistance to get into or out of a bed or chair (a.k.a. transferring) and she probably needs assistance to get on and off the toilet as well. Therefore, if your mother owns a policy that meets the federal guidelines (and most policies do), she should already qualify for benefits.

The federal government recently did an audit of the claims practices of 7 of the leading long-term care insurers.

Scott

Yup... you can't get old in this country without someone acting as wolverine for you.
The corruption is epic.

I feel for the voiceless as well as the exhausted caregiver who doesn't know how she/he will continue another day.

Keep fighting and venting!

lovbob

I am not printing LIBEL, lol, it is the truth....aging in AMERICA is not respectful, and everyone is trying to drain your bank account, including family~
BTW: TRANSAMERICA has terrible reviews, I googled them and read a ton. Not just me complaining. I have to hound them every month to pay. They "claim" they "never got the time sheets", when I know the care giving agency faxes them the 5th of every month. She is lucky to have me fighting for her....

Most are total ripoffs. by the time you can't walk or eat, hospice can be called in.
And now we know that TRANSAMERICA is garbage. thanks Rox!
sharing info like this can keep the next person from being taken advantage of.

Good alternative Lilliput!

lovbob

My mother has TRANSAMERICA. I have to harrass them to pay her monthly benefit. It use to be $2,100.00 a month. Wiht no written notice, it has suddenly dropped to $1,610.00, and her at home care is $3,600.00 every 2 weeks. So I guess my answer is,"YES" it is a rip off. Better to just go broke and be on title 19. Whatever you pay in, you will never get back. I called and my mom has over $350,000.00 worth of reimbursent money left, so why the drop in her reimbursement? Makes no sense, except the insurance company is not in this business to give money back. Being elderly is a big kick in the butt. No respect and the system stinks!

Our financial planner talked us into buying a LTC policy. She found a company that was "rock solide" in her words and the really were highly rated at the time. A few years later this company had numerous law suits for failing to pay. They tied up the poor clients in court until they eventually passed away. So I let our policy expire and found more solid investments that are safer and have a guarantee yield. I generally avoid companies who promise that if you pay now they will take care of you later. What happens if they go out of business, or change hands? It is just too volatile now to trust that any company will be around when you need it. And with the aging of the baby boomers, I think we are going to see even more of these law suits in the future.

I also have wondered about this. When my father-in-law got sick and eventually died, my brother-in-law and his wife bought the long care insurance. They got scared thinking about how much it costs for a nursing home etc. I guess a person needs to read the fine print and know exactly what it does cover. And then how do you know how you will die? Are you going to end up in a nursing home or die suddenly and never need that insurance. Seems like a crap shoot to me. I guess I'll find out sooner or later with my brother-in-law if it paid off.