Is long-term care insurance mostly a rip off?

I also have wondered about this. When my father-in-law got sick and eventually died, my brother-in-law and his wife bought the long care insurance. They got scared thinking about how much it costs for a nursing home etc. I guess a person needs to read the fine print and know exactly what it does cover. And then how do you know how you will die? Are you going to end up in a nursing home or die suddenly and never need that insurance. Seems like a crap shoot to me. I guess I'll find out sooner or later with my brother-in-law if it paid off.

Our financial planner talked us into buying a LTC policy. She found a company that was "rock solide" in her words and the really were highly rated at the time. A few years later this company had numerous law suits for failing to pay. They tied up the poor clients in court until they eventually passed away. So I let our policy expire and found more solid investments that are safer and have a guarantee yield. I generally avoid companies who promise that if you pay now they will take care of you later. What happens if they go out of business, or change hands? It is just too volatile now to trust that any company will be around when you need it. And with the aging of the baby boomers, I think we are going to see even more of these law suits in the future.

My mother has TRANSAMERICA. I have to harrass them to pay her monthly benefit. It use to be $2,100.00 a month. Wiht no written notice, it has suddenly dropped to $1,610.00, and her at home care is $3,600.00 every 2 weeks. So I guess my answer is,"YES" it is a rip off. Better to just go broke and be on title 19. Whatever you pay in, you will never get back. I called and my mom has over $350,000.00 worth of reimbursent money left, so why the drop in her reimbursement? Makes no sense, except the insurance company is not in this business to give money back. Being elderly is a big kick in the butt. No respect and the system stinks!

Most are total ripoffs. by the time you can't walk or eat, hospice can be called in.
And now we know that TRANSAMERICA is garbage. thanks Rox!
sharing info like this can keep the next person from being taken advantage of.

Good alternative Lilliput!

lovbob

I am not printing LIBEL, lol, it is the truth....aging in AMERICA is not respectful, and everyone is trying to drain your bank account, including family~
BTW: TRANSAMERICA has terrible reviews, I googled them and read a ton. Not just me complaining. I have to hound them every month to pay. They "claim" they "never got the time sheets", when I know the care giving agency faxes them the 5th of every month. She is lucky to have me fighting for her....

Yup... you can't get old in this country without someone acting as wolverine for you.
The corruption is epic.

I feel for the voiceless as well as the exhausted caregiver who doesn't know how she/he will continue another day.

Keep fighting and venting!

lovbob

@KEdwards460,

You are mistaken about the benefit eligibility requirements for long-term care insurance.

There has never been any long-term care policy that was sold that required that one to need assistance with walking and eating in order to be eligible for benefits.

The eligibility requirements for long-term care insurance are regulated by both state and federal law.

The requirements to be eligible for benefits are needing assistance with any 2 of 6 Activities of Daily Living (aka ADL's). The 6 ADL's are: bathing, dressing, eating, toileting, transferring and maintaining continence.

If your mother can't walk without assistance, that would imply that she needs assistance to bathe, she probably needs assistance to get into or out of a bed or chair (a.k.a. transferring) and she probably needs assistance to get on and off the toilet as well. Therefore, if your mother owns a policy that meets the federal guidelines (and most policies do), she should already qualify for benefits.

The federal government recently did an audit of the claims practices of 7 of the leading long-term care insurers.

Scott

Well, scott that may be true for everyone on the planet but my mom but I doubt it since I've been hearing horror stories @ LTC from other people in the same boat as myself. Mom seems to have gotten a policy that only meets the criteria I mentioned. I understand that there are "cadillac" policies that cover more but that is not the one my mom has. In short she has to be a complete and utter vegtable in order for any of the LTC to kick in. Any other assistance that she pays for that she gets from outside help (when I'm unable to do it) she can deduct from her income tax according to her accountant which is good (glad to find that out).

Long-term care insurance is a highly regulated insurance product. Most insurance products are only regulated by the state in which the policy is purchased. LTC insurance is regulated by both federal law AND state law.

The benefit eligibility requirements that I outlined above were made into law in 1996 by the federal government. These benefit eligibility requirements are REQUIRED in every policy that meets the federal guidelines. These requirements are not just for "cadillac" policies. EVERY LTCi policy that meets the federal guidelines uses these same benefit eligibility requirements. About 95% of the long-term care policies that have been purchased meet these federal guidelines.

Whoever explained your mother's policy to you, doesn't understand how your mother's policy works. There has never been any LTCi policy sold that would use language in it like you've described. A policy like that would never have been approved by any state department of insurance because a policy like that is useless.

Scott

Thanks Scott. I'll look into it.