I can't thank you enough for taking this topic! I was trying to research it myself, but couldn't find the statistics. It all makes sense now! Could you do a similar video about heathcare costs in different age groups for the purposes of buying health insurance, and in particular, ACA insurance.
One thing I never see discussed is another option, although it takes money upfront and having planned it out and researched. Non-profit CCRCs (Continued Care Retirement Communities.) Unfortunately, we don't get to know how long we'll live and the 'well, I took care of my health' is not a guarantee. In my husband's grandmother's case, she went into one while independent at 86. As she got older and less able, she was moved to the assisted living building. In the final year of her life, she was moved to their skilled nursing section, where she died at 103 years old. While they aren't a fit for everyone, it might still help to have it on an alternatives to LTC list.
I agree that the concept of self-insurance / invest is poorly understood...why do you think there are so many insurance companies offering annuities, LTC plans and life insurance? I LOVE liquidity and lack of rules and lack of fees - I am the BOSS! Instead of Medicare Gap Plans, I self-insure the 20% side. I have never believed in LTC, annuities or whole life insurance or extended warranties. IMO, the only insurance you need is physical, like health insurance, car insurance, property insurance, or camper/boat/motorcyle insurance. Term life insurance only as a young family man.
Excellent video! Thank you Tony. This is the first LTC presentation I've agreed with. I'm 60 and decided to self insure from the beginning. I live a very modest lifestyle but make good money. I invest roughly half of my income in a 401k and a separate brokerage account and Roth IRA.
Very clear and helpful info and perspective -- much appreciated! Thank you. Figuring out exactly how much of the supposed "pool" of money in my LTC policy would likely actually ever come to me...and how it's limited in how much per day etc (with no inflation protection) gave me an entirely new way of looking at it. The insurance money would help, for sure, but perhaps not really a good way to use the money i'd spend on premiums.
@22:15 $3200 / year? I have an LTC policy that I got through work some years ago I pay $13/month or $156/year. Are there companies out there charging $267/month for a long term care policy? *confused*
I suspect a lot of people that need long term care are people who never took care of their health. I did the math, and I plan to self insure, but I'm also working on eating right and exercising.
At 90, my grandmother who took care of her health all her life (e.g. rode an indoor bike while watching her soaps), only needed an occasional aspirin for medicine, but she had dementia and couldn't even operate a telephone. Other people are injured, and even people who live right get cancer and other diseases as they age. So don't think that because you're fit and eating right that you're never going to need long-term care.
Really interesting as an arithmetic exercise, calculation of outlays and probabilistic returns, but is this really appropriate to treat transfer of risk as an investment? With the exception of permanent life insurance with cash value accumulation, insurance is generally not perceived as investment (no value enduring any market risk). CV life insurance is generally considered a savings product (again, no appreciable market risk). But back to the episode, am wondering if you happened to run any of those notional ROI calculations using longer elimination periods for lower premium, e.g. 1 yr elimination period for traditional LTC policies?
Wow, you can self insure for any catastrophic event, but insurance is a hedge against a catastrophic event-just like life insurance or medical insurance.
Excellent presentation! Based on the information in this video (and other sources of information) I think I'll be better off in the long run taking the money I would have to pay for an LTC policy and investing it, probably in an index mutual fund. No elimination period and, very important, neither me nor my spouse having to deal with an insurance company to get them to pay up.
This. I don't see how the example given was a best case scenario. If you paid $3200 for only one year and then collected the $180,000, wouldn't the IRR be something like 5500%? A parallel example: If I paid $600 a month for *health* insurance for 25 years (= $180,000) and had a $405,000 covered medical expenditure, wouldn't the IRR be the same 5.63% as in the LTC example? But I guess the IRR argument is not really crucial to this presentation.
I am not an insurance agent, and am not saying self-funding is not a viable option for some to solve for LTC. However, your math and assertion of "Lifetime Maximum $180,000 is only 573 Days (Just over 1.5 years)" appears to be miscalculated to me. You are saying the $150 daily benefit (at start) has a "3% Annual Increase", and as you say it compounds 3% annually after 25 years to $314 (at end). I believe the Lifetime Maximum $180,000 (at start) would also compound 3% annually as well, and if so the Lifetime Maximum would be $376,880 (at end). Rather than $180,000 / $314 = ~573 days of coverage, you'd have $376,880 / $314 = ~1,200 days (or > 3.25 years) of coverage.
Ok, so men tend to pass away quickly and women tend to linger a long time before passing, right? Could it be that the wife is actually helping the husband pass away sooner? ;) (Just joking)
31:49 an insurance carrier giving anything for free? Does Not Compute(tm). Lol. - more likely, the cost of the rider already baked in to all policies, whether customer selects it or not
I can't thank you enough for taking this topic! I was trying to research it myself, but couldn't find the statistics. It all makes sense now!
Could you do a similar video about heathcare costs in different age groups for the purposes of buying health insurance, and in particular, ACA insurance.
Semiprivate room is very disturbing when other snoring and other noise with visitors smells medical machines sounds .
One thing I never see discussed is another option, although it takes money upfront and having planned it out and researched. Non-profit CCRCs (Continued Care Retirement Communities.) Unfortunately, we don't get to know how long we'll live and the 'well, I took care of my health' is not a guarantee. In my husband's grandmother's case, she went into one while independent at 86. As she got older and less able, she was moved to the assisted living building. In the final year of her life, she was moved to their skilled nursing section, where she died at 103 years old. While they aren't a fit for everyone, it might still help to have it on an alternatives to LTC list.
Are there any such facilities for vegetarians and vegans.
@@Just_forfun9140 I doubt it, although if it's a good CCRC, you might be able to have some food made specifically for you.
I agree that the concept of self-insurance / invest is poorly understood...why do you think there are so many insurance companies offering annuities, LTC plans and life insurance? I LOVE liquidity and lack of rules and lack of fees - I am the BOSS! Instead of Medicare Gap Plans, I self-insure the 20% side. I have never believed in LTC, annuities or whole life insurance or extended warranties. IMO, the only insurance you need is physical, like health insurance, car insurance, property insurance, or camper/boat/motorcyle insurance. Term life insurance only as a young family man.
Excellent video! Thank you Tony. This is the first LTC presentation I've agreed with. I'm 60 and decided to self insure from the beginning. I live a very modest lifestyle but make good money. I invest roughly half of my income in a 401k and a separate brokerage account and Roth IRA.
Great video could you include source when you referring any graph or plot? So we can look thru those source thanks!
Very clear and helpful info and perspective -- much appreciated! Thank you. Figuring out exactly how much of the supposed "pool" of money in my LTC policy would likely actually ever come to me...and how it's limited in how much per day etc (with no inflation protection) gave me an entirely new way of looking at it. The insurance money would help, for sure, but perhaps not really a good way to use the money i'd spend on premiums.
medicare advantage and other supplement is helpful? for any long term care in the future?
@22:15 $3200 / year? I have an LTC policy that I got through work some years ago I pay $13/month or $156/year. Are there companies out there charging $267/month for a long term care policy? *confused*
Thank you for removing fear mode. I can never trust that.
It’s not just nursing homes that’s only 4% Most people get in-home care
I suspect a lot of people that need long term care are people who never took care of their health. I did the math, and I plan to self insure, but I'm also working on eating right and exercising.
At 90, my grandmother who took care of her health all her life (e.g. rode an indoor bike while watching her soaps), only needed an occasional aspirin for medicine, but she had dementia and couldn't even operate a telephone. Other people are injured, and even people who live right get cancer and other diseases as they age. So don't think that because you're fit and eating right that you're never going to need long-term care.
Really interesting as an arithmetic exercise, calculation of outlays and probabilistic returns, but is this really appropriate to treat transfer of risk as an investment? With the exception of permanent life insurance with cash value accumulation, insurance is generally not perceived as investment (no value enduring any market risk). CV life insurance is generally considered a savings product (again, no appreciable market risk). But back to the episode, am wondering if you happened to run any of those notional ROI calculations using longer elimination periods for lower premium, e.g. 1 yr elimination period for traditional LTC policies?
Wow, you can self insure for any catastrophic event, but insurance is a hedge against a catastrophic event-just like life insurance or medical insurance.
Excellent presentation! Based on the information in this video (and other sources of information) I think I'll be better off in the long run taking the money I would have to pay for an LTC policy and investing it, probably in an index mutual fund. No elimination period and, very important, neither me nor my spouse having to deal with an insurance company to get them to pay up.
20:57 I think the best would be a LTC qualifying event much sooner (say 5 yrs into your payments, vice 25 yrs in).
This. I don't see how the example given was a best case scenario. If you paid $3200 for only one year and then collected the $180,000, wouldn't the IRR be something like 5500%?
A parallel example: If I paid $600 a month for *health* insurance for 25 years (= $180,000) and had a $405,000 covered medical expenditure, wouldn't the IRR be the same 5.63% as in the LTC example?
But I guess the IRR argument is not really crucial to this presentation.
This was sooooo helpful!! Thank you!!!
If my parents live in a filial law state like Pennsylvania but I live in a different state, am I potentially liable still?
PA is a unique example sense it’s the only state that allows third parties to sue. But yeah… he had to pay.
I am not an insurance agent, and am not saying self-funding is not a viable option for some to solve for LTC.
However, your math and assertion of "Lifetime Maximum $180,000 is only 573 Days (Just over 1.5 years)" appears to be miscalculated to me. You are saying the $150 daily benefit (at start) has a "3% Annual Increase", and as you say it compounds 3% annually after 25 years to $314 (at end). I believe the Lifetime Maximum $180,000 (at start) would also compound 3% annually as well, and if so the Lifetime Maximum would be $376,880 (at end). Rather than $180,000 / $314 = ~573 days of coverage, you'd have $376,880 / $314 = ~1,200 days (or > 3.25 years) of coverage.
Ok, so men tend to pass away quickly and women tend to linger a long time before passing, right? Could it be that the wife is actually helping the husband pass away sooner? ;) (Just joking)
OK, OK, that one made me laugh out loud... 🤣🤣
31:49 an insurance carrier giving anything for free? Does Not Compute(tm). Lol. - more likely, the cost of the rider already baked in to all policies, whether customer selects it or not
I was going to watch your video, but not when you take 40 min to say something that really shouldn’t be longer than 10.
Not when you have children.
LTC INSURANCE IS A HUGE RIPOFF!!!!!!!!!!!!!!!!!!!!!!!!!!!