Long Term Care Insurance

I have just been handed my next blog topic.  My wife and I have been trying to purchase a Long Term Care (LTC) insurance policy, and we have just been denied.  While we each take medications and each has had medical issues in the past, we both consider ourselves healthy.  I ride my road bike 40 miles per week or more and do some exercise most every day.  Before she hurt her shoulder, my wife swam, and she still enjoys her walks.  Neither of us is fast, but we are active.  Nevertheless, we have been told that we are Uninsurable.  We are both over 55 (but not yet 60!), so not ready to go into the Home just yet.  That’s a tough verdict to take.

Protect Your Assets

During my CFP® training, it was stressed that a client with some assets worth protecting and the ability and willingness to pay should purchase LTC insurance.  It is a form of Risk Transfer – the insurance company takes over the risk of potentially paying for your time in the nursing home, or for in-home care.  Costs are going Up!  Nursing (or assisted living) situations are quoted in terms of Cost Per Day, while in-home care is usually quoted as cost per hour.  Here in Orange County, California, a nursing home can easily cost $400/day, which is $12,000/month.  In-home care can easily cost $25/hour for a nurse, and maybe somewhat less for a qualified caregiver who is not a nurse.  If you don’t have insurance, then it is all out-of-pocket, after tax cost.  Do that math!  You save and scrimp your whole life so that you can retire in peace, only to have to spend it all on a caregiver or perhaps on a home.  Medicaid?  You do not want to go to a Medicaid home. In my opinion, care is poor, and the homes are there to just make you safe until you pass away, and to avoid lawsuits.  Don’t believe me?  Go and visit someone who is in a Medicaid facility, and ask yourself if that is what you want for your own future.  If you have any assets, you want to go to a Home of your choosing, or you want a home caregiver so you can stay in your own home until that is no longer possible.  And you want to do this without having to spend all of your money, so that your heirs might get something.  That’s why you buy LTC insurance.  Your choice:  Spend some money now (in the form of premiums) to buy coverage now, or spend a lot more later, once you need care or are in the Home.  Or really roll the dice and hope you will die not needing care – unlikely in this age of life-extending medicine.  Those are your choices – not really a rosy future as you get old.

Tough To Buy Insurance

Our case is certainly a one-off situation, but I think it may be consistent with the way the insurance market and economy are moving now.  The national news has been focused on health insurance, and how in many counties and states there are a dwindling number of insurers willing to write health coverage for individuals not associated with a company or group.  I think our situation shows that the case is the same for LTC insurance.  It is becoming more and more difficult to buy insurance.  I don’t think of my wife and me as high-risk purchasers.  Like I mentioned, we work hard and we live healthy, active lives, albeit with some (totally legal) chemical assistance.  Have you had a similar experience?  With LTC insurance or maybe with life insurance?  Please let me know – maybe it will help prove my notion that the entire insurance market of all types is tough now.

Full Disclosure

I have had sleep issues for most of my life, and I take medication to help me and I use a mouthguard to inhibit snoring.  It’s not pleasant not to sleep well, but I manage and plan my life accordingly.  During one of my doctor visits to discuss my sleep issues, possibly as part of a questionnaire, I mentioned that I sometimes have loss of memory associated with my insomnia.  Who wouldn’t?  Seems like a natural thing, especially as one gets older.  Well, according to my insurance agent, any mention of memory loss will almost always result in Denial of Coverage.  The agent says I could dispute the result and try to prove that I don’t have “memory loss”, which I don’t, but it will take a lot of my time and will be costly, and highly unlikely to succeed.  So did I sink my own ship by disclosing casually something that is natural?  Is there anyone out there who doesn’t have memory loss to some degree?  It sounds to me like the insurance company was looking for a reason to deny us.  It’s like if you get in a minor fender-bender car accident – do you report it to your insurance company, or do you just pay for the repair out-of-pocket so that your insurance premium doesn’t go up?


I still think LTC insurance is a good idea, but if you have had any health issues and you are on any continuing medications such as for high cholesterol or blood pressure, it may already be too late.  It is best, and may be only possible, to purchase LTC insurance while you are young and in tremendous shape.  Insurance companies like to insure situations where there is very little or no risk.  My wife and I are not that.  Act early, before you are even thinking about your needs as an old, sick person, because the window closes quickly.  For any LTC insurance agent, or any financial planner who lives on commissions generated by placing insurance policies:  Your business is rapidly changing, and not for the better.