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View Diary: More about "keeping the health insurance you have" (43 comments)

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  •  Private Long Term Care insurance is a racket (3+ / 0-)
    Recommended by:
    Getreal1246, snakelass, Silent Lurker

    In my opinion, Private Long Term Care insurance is a racket, and you should drop it as soon as you can.  Do you think that in a capitalistic society such as ours, that you will be able to give a company thousands of dollars per year over twenty years, and they will still be viable when it comes time to pay the claims?

    It is a classic Ponzi scheme.   A big money maker as long as most people are paying in, and few people are collecting.   As soon as the ratio switches, the insurance companies will be out of money.   When they say "Who could have foreseen this?"  in thirty years, please somebody point them to this blog post.

    •  Doesn't help that (2+ / 0-)
      Recommended by:
      snakelass, b tex

      insurance companies have been dabbling into investments to make more money faster. That's why quite a few of them are in trouble.

      We have no future because our present is too volatile. We only have risk management. The spinning of the given moments scenario. Pattern Recognition. ~W. Gibson

      by Silent Lurker on Tue Dec 09, 2008 at 01:32:18 PM PST

      [ Parent ]

    •  Actually, we have given dropping it thought, (0+ / 0-)

      but it is survivor protection as well as protection for our descendants so THEY don't have to pay. As the two of us grow older, if one winds up in long term care in order to prevent the wearing out of the healthy one, as a couple, we would have to deplete our retirement savings before we could expect government assistance.

      That would leave the survivor with little to nothing to live on. Yes, when one of us is left, that one may choose to drop LTC insurance because that one may be willing to spend down his or her assets.

      A single payer universal care plan will provide long term care or in-home care that our LTC currently covers in case one of us needs it.

      We've had experience with long term care more than once. I know what I am talking about. It could be that those who do not see the value in Long Term Care have not lived long enough to see how it can wipe out everything.

      •  You are basically placing a bet (1+ / 0-)
        Recommended by:
        b tex

        that patented effective Alzheimer's drugs won't be developed.

      •  I don't question the value of care, just of cover (1+ / 0-)
        Recommended by:
        b tex

        I hope that you never need it, and if you do need it, that it will be there.

        The plans that I have inspected require you to pay the premium forever.   If you fall on hard times, and can't keep up the payments, you lose your coverage.

        Many people think they can afford the coverage while they are both employed.  Maybe at 60 a person is working, healthy, and has the income to spare.   Will that person still be able to pay the premiums when they are 70?  80? 90?

        Also, the price of the premium can jump.  Your policy can't be increased individually, but it can be increased for everyone as a class.  In Minnesota a few years ago, LTC premiums for existing policies jumped by 50%

        The most outrageous part of this is that the rates had to be raised because TOO MANY PEOPLE KEPT THE COVERAGE! The companies bet that 15% of the policies would lapse, resulting in free money for them.

        Some policy premiums have increased by as much as 45% within the last year.

        The department's review concluded that rate increases have been the result of two primary factors:

           * Reduced policy lapse rates - Most companies assumed that policy lapse rates - the proportion of policyholders that stop paying premiums and let their policies terminate each year- would continue at historical levels of 10 to 15 percent of policies each year for the first few years after policy issue, and 4 to 6 percent per year in later years. However, those levels have reduced dramatically in the last five to nine years. The premium rates are now much less likely to be sufficient to cover the total anticipated claims.
           * Reduced interest rate earnings on investments - Ten years ago, a typical long-term interest rate assumption might have been around 7% to 9%. It was impossible to foresee that long-term interest rates would drop to about half of that level. This change had a dramatic impact on the ability of companies to provide the promised benefits at the existing rates.

        What I doubt is that the insurance companies will pay for it when you need it.

        I am 57.  My dad is ninety two.  He may end up needing care, and maybe not.  My mom needed it for awhile.  

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