You’re right; I should blame the legislators.
Anyone seriously considering a LTCi policy, get a copy of each policy you are considering and CAREFULLY read ALL the terms. Make a spreadsheet of it helps to list out the terms that MUST be met before you qualify for benefits.
All the policies I’ve read have a list of 6 activities of daily living:
Transferring from bed to chair
Feeding yourself/eating
Toileting (using the bathroom)
Bathing
Dressing
Continence
Your MD must certify your inability to do a specified number of these activities before the meter begins on you qualifying for benefits. The number can be 2, 3 , 4, 6 or whatever your policy specifies. That these tasks are difficult, painful and may take you much longer than a healthy person (as in hours instead of minutes) is irrelevant to insurance.
Once your MD certifies, the insurer can review all your medical records and ask for an independent medical exam (at its expense) to try to see whether in their view you qualify.
After insurer agrees you meet the criteria, the waiting period selected in exchange for lower premiums starts. Only once the waiting period has ended after you qualified will benefits be paid for qualifying expenses performed by persons or at places qualifying under your policy.
Insurance is governed by contract and you have to meet ALL the terms to be entitled to collect anything. Yes, I admit I’m strongly biased against LTCi because I think it costs way too much and has way too many terms and conditions that most buyers don’t understand and have no choice in altering any terms anyway.
I just squeaked by on the test. I know very little about annuities and skipped those questions. Also don’t know much about life insurance besides term policies. Thank you for posting it!
Oh yea, your insurer still needs to be solvent and had sufficient assets when it’s time for you to get benefits–this can be a major issue, especially if decades have elapsed from when policy was purchased and when benefits are due.
Absolutely. The doctors need to cover their own butts, but the legislators are just pandering to a specific group.
Regardless of whether you are interested in LTC, an important part of retirement planning is study the costs of nursing homes and home care where you live (and in places you are considering for relocation).
Here is one handy link - https://www.genworth.com/about-us/industry-expertise/cost-of-care.html My experience was that different calculators had somewhat different results. But there were huge swings based on geography.
One of the reasons we investigated LTC was that it was highly recommended in two different retirement planning classes at our community college… In both cases the instructor / financial planners highly suggested it, despite the fact that they were NOT selling it themselves. They did present some other self-funded methods, where they would make commissions… but they didn’t push it much. We probably would not have done LTC if my husband’s employer did not have a group rate option. (My employer did years ago, but at that point we were too young to consider it.) .
You can also consult the Dept of Health, Executive office on aging for “going rates” of services in the areas you are considering. There is certainly variation by geographic area.
Around Honolulu rates can be $19-45/hr, depending on desired skills, hours, terms, etc. it sure can add up quickly.
Example costs via my above link (you can enter your own state/city)
https://www.genworth.com/about-us/industry-expertise/cost-of-care.html
MONTHLY Average - SF / Boston / Denver / Rapid City / Dallas
Homemaker Services - $6720 / $4,767 / $4,385 / $4,578 / $3,813
Home Health Aide - $6,720 / $4,957 / $4,576 / $4,578 / $3,813
Adult Day Health Care - $1,690/ $1,473/ $1,408 / $2,080 / $1,311
Assisted Living Facility - $5,950 / $6,200 / $4,250 / $3.530 / $3,700
Nursing Home Care - $12,517 / $11,437 / 7,559 / $6,347 / $4,578
Private Room - $15,593 / $12,517 / $12,167 / 8,578 / $6.651 / $6,159
Note - These are just averages, and of course the costs will go up each year. This just gives a general idea of geo variations.
We were hiking in a canyon near Santa Monica today, and I thought, wow… What a great area. Nice weather, the beaches, gardening possibilities… Then I saw a rattlesnake on the trail… No way I am retiring anywhere where there are poisonous snakes. That leaves western WA and HI on my list. 
Yes, snakes are illegal in our state and we only have them pop up very rarely–an illegal escaped pet or a stowaway from a plane. We especially have no poisonous snakes and knock wood, no rabies.
All the policies I’ve read have a list of 6 activities of daily living:
Transferring from bed to chair
Feeding yourself/eating
Toileting (using the bathroom)
Bathing
Dressing
Continence
Also, be aware that the company may not interpret the ADL as you do, for example, Dad can move food from his plate to his mouth, but he cannot plan a meal, shop for the food or prepare it, but technically he can feed himself, so you might need help for him and yet it does not count for LTC
Definitely, having the senior be able to plan food, shop, prepare food AND remember to eat is NOT as simple as the mere act of being able to feed yourself. That feeding hand to mouth is the baseline ADL for feeding under the policies. The other stuff doesn’t count and need assistance way sooner than gettingbfoid from hand to mouth.
Also, as previously posted, the policy can require that the person be unable to perform 2, 3, 4, 5 or even all 6 of the activities under THEIR definition before the meter starts on qualifying for ANY benefits
Even knowing what food should be tossed (old/spoiled) vs eaten doesn’t count and is obviously important but not an ADL.
Excellent points on the “activities” lists. I will say that I have had several friends whose parent had LTC (probably the older, cheaper/better plans), and they’ve had good luck with the coverage for home care as well as assisted living / nursing homes. That’s no guarantee on other/future plans, so buyer beware.
Note - We did opt to purchase LTC insurance. However, I am not advocating it for all. Mostly I’m encouraging families to be aware of the potential costs down the road.
Ran a thingy (technical term) on Fidelity that combines all my accounts across different sites and analyzes them. According to Fidelity I have the following allocations:
Domestic stock: 57%
Foreign stock: 12%
Short-term bond: 29%
Other/unknown: 2%
Short term bond is money-market or cash.
I am overweighted to growth stocks (50% compared to the DJ U.S Total Market Index of 31%) and in medium (25% vs. 19%) and small (12% vs 5%) stocks, and correspondingly underweighted in large stocks.
For sectors I am way overweighted in Tech stocks, a little over in “consumer cyclical”, and underweighted in almost everything else - financial services, healthcare, industrials, “consumer defensive”, energy, basic materials, real estate, communication services, and utilities. Not sure what “consumer defensive” is…
I don’t mind being stock-heavy as I consider my rental properties to be a proxy for fixed income instruments.
It’s interesting information… I have to ponder what if anything to change.
Because I haven’t consolidated everything in one place, I hold shares in around 40 mutual funds. That’s probably too many…
The most surprising this is that I have only 12% in foreign stocks, I thought I had more.
Any advice?
Consumer defensive covers stocks that focus on necessities - food, beverages, tobacco, some household item stuff.
“Because I haven’t consolidated everything in one place, I hold shares in around 40 mutual funds. That’s probably too many…”
And I thought I was bad! Yes, too many. Maybe keep some of the better performers and switch $$ to an index fund or two.
Probably half or more of those mutual funds are in 401ks, which don’t offer much in the way of index funds. So I tend to split my contributions across a number of the the stock funds. If I rolled over the ones I can, I could get rid of 15+.
Do you have more than one 401K? If so, might be worthwhile consolidating and keeping stuff under one roof/on one platform even if you buy outside funds. You don’t really need a lot of index funds to choose from, just a good broad based index or two.
40 mutual funds? Holy cow, how do you even keep up with that? I have all my stuff in one place, only 5 mutual funds and one corporate bond/money market fund. My husband was annoyed with keeping track of so many (maybe 8-9), so we consolidated the little ones. Maybe I don’t have enough!
Oh m gosh yes, everything in one place! I am dealing with my dad’s estate and really wish he had consolidated a bit more. It’s not even that bad, but helping my mom with taxes and all the 1099s could be easier, as could the reregistrartion in her name or in the estate’s. I want to spare someone else in the future who does this on my behalf.
I took every mutual fund my dad held and put them all in Fidelity. When he died, all was in fidelity and vanguard. Otherwise, you’ll need 40 death certificates, lots of paperwork, and Medallion sales.
Please simplify.