Dave Ramsey is still telling people to wait until they are 60 to buy long term care insurance. It’s embarrassing that he is saying nursing homes cost $50,000 when they really cost $75,000 and much higher in certain parts of the country like New York and parts of California. And still to be talking about just nursing homes after all these years when most people are NEVER in a nursing home. 75% of the care is at home and about 10% is in assisted living facilities. Less than 15% of care is in a nursing home. (Health Affairs, Jan 2010)
What’s really interesting to me, however, is that the report I gave him along with my new book back in March said a couple waiting til 60 would have to pay about $8000 when they could have gotten it at 50 for about $3500. And $8000 is the premium reported by the couple in their 60s in this story. If Dave could just grasp that telling people to wait until their 60s can not only price them out of the market, it can make them uninsurable so that no amount of money will buy it for them. Maybe someone could ask him “Dave, how many people do you know who have had a stroke in their 50s?” The ultimate result of what Dave Ramsey is doing by telling people to wait until age 60 to buy LTC insurance means we, the taxpayer, have to pay for more people on Medicaid because they listened to him and didn’t plan early enough. Sadly, the 60 year olds who try and fail to get LTC insurance are very likely to lose the financial peace for which they turned to him to start with because long-term care is the most common reason people outlive their savings. Feel free to use the info from my report with anyone.
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What are your thoughts on hybrid LTC life insurance? It’s being recommended that I purchase this. I’m 52, no kids and just starting to look into LTC.
Author
Many people want a hybrid plan which links life insurance with LTC insurance in order to leave money to their family if they never need care. With no children, that may not be your priority. Another reason to buy a hybrid plan is to have a guaranteed premium. What I don’t want you to do is buy a hybrid for any reason if it does not pay enough to help you in 30 years when you are likely to have a claim. Of course you could have a stroke or get hit by a drunk driver at any age, but it’s important to plan for inflation at the average age for a claim which would be in your early 80s. I encourage you to sign up for a no-obligation consultation to compare options. Just click on this link: https://www.gotltci.com/contact-us/
We bought Geworth LTC at a reasonable amount at ages 60, 66. We are now 69 and 75. Our policies have doubled, but are still doable. (3200 and climbing)
The policy does not cover the first 90 days of care.
We are talking with an Aetna agent who promises coverage for those 90 days if we switch but costs go up around $5000 per year..
Should we even consider changing policies, buying an additional one?
Or should we save money to cover those first 90 days–approx. 24,000 each. Yikes.
What to do, what to do..
Author
Glad you found me Sandra. The first 90 days will only cost that much if you are in a nursing home and if nothing is paid by Medicare…an unlikely scenario. Most people start having care at home. If you have a stroke or accident, for example, you would likely go to the hospital, then likely to a rehabilitation center for several weeks. That rehab center is a skilled nursing facility in the eyes of Medicare and is covered up to 100 days. You may not qualify for the entire 100 days, in which you would go home and likely be approved for a few home care visits. Now, if the only issue is dementia, Medicare (or a Medicare supplement) won’t pay anything. Genworth policies often have first day benefits for home care so check yours to be sure it doesn’t before you consider adding anything else. If the 90 day deductible applies to your home care benefits, ask the AETNA agent to show you a home care only plan that will pay $1200 per week for 13 weeks. Assuming it is your husband who is 75, the monthly premium is about $112. That would fill in the first 90 days with a significant home care benefit. You will be required to have at least three home care visits from a home health agency per week, but anything left over can pay for any care you like, like a family or friend. If you want to discuss further, please don’t hesitate to reserve a time with me at https://calendly.com/phyllis-shelton
My husband and I have a policy with Met-Life and it too has had changes with price increased. It has dropped offering polices and only administers to current policies. They have twice now raised the prices significantly and the last offer we dropped the monthly premium by reducing the care to a three year term, as they find that to be the expected life term spent in a nursing facility. We took this policy out at the age of 62 and are currently 72 and 75. Still like having the option of living at home and having care given there instead of a nursing home, but that is something one never knows the care they will need in the future. It is best to plan for it than to leave it to chance! How stable do you feel the Met-Life plans are now that they do not offer new policy enrollment?
Author
I think MetLife will take care of you and hopefully the worst of the rate increases are behind us. Most people are never in a nursing home if that brings you comfort, and that’s why it’s great that your MetLife policies will pay for home care, adult day care and those nice assisted living facilities that we see being built everywhere. Couple can stay together there and they don’t charge much for the second person. Yet they look nothing like nursing homes. So I hope you and your husband can stay home the entire time but if that doesn’t work out, the assisted living facility is a nice landing spot.
LTC insurance still leaves me shaking my head even though I have had it for 8 years since the age of 60.
In one year John Handcock Ins raised the price from 2,100 to 4100. WHERE DOES THIS STOP? Is my major question. I am ready to ditch it, but …sometimes your inner voice says something.
There was No explanation….and little to no guidance.
This is a TRUE quandry for me.
Comments from those who have experienced dropping his/ her LTC are appreciated.
Author
Please do not cancel your John Hancock policy Tom. Let’s look at a worse case scenario. Compare the total amount of premium you will have paid in 20 years when you are 88 years old to the benefits you will have at age 88 and see if that makes you feel better. There are options to reduce your premium, however. You should have received a letter with the rate increase suggesting some ways to do that. If you would like my help to evaluate the best action for your situation, just email Lawrence@ltcconsultants.com to set up a call with me. No charge. No obligation.
Hi Tom,
I would reach out to your local Nationwide Agent to find out about the LTC product they have to offer. The premiums stay fixed and will not go up on you.
Plus, the product is not a reimbursement plan like John Hancock’s is. Nationwide’s LTC plan is indemnity style which means the company send the payment directly to you when you qualify.
At least have the agent review your hancock policy. They could have a solution.
Author
Ben has a point. Nationwide has two types of policies that pay for LTC and both pay cash benefits to you. It may be tough to duplicate the John Hancock benefits but it’s worth checking out. Cash often has more purchasing power than a reimbursement benefit because you can hire whomever you want as a caregiver rather than going through an agency.
Author
Well, there’s a lot to be said for debt reduction and I can’t comment on the other products he talks about. I can only reiterate that he should make it very clear that people need to consider long-term care insurance long before age 60.
Whenever someone is an expert in their field, they will have issues with Dave Ramsey. Its really pathetic that his listeners don’t look beyond him for advice. He is really a debt reduction specialist that fakes being a financial expert- Selling products to people all along the way.