I once felt good about having a LTC insurance policy through my employer. For the last 7 years though I’ve had to pay the premiums myself since my employer no longer provides coverage. I think it is a good policy and WAS glad I kept it.

But the premium keeps going up more and more every 6 months. I don’t think it’s affordable once I retire so I’m wondering what’s the point in continuing. If I take steps to reduce my coverage to reduce my premiums then I’ve wasted years on this damn thing.

Seems like you just can’t win at these things.

Anyone else experiencing similar issues with their LTC policy premiums? What are your plans?

I looked into getting some.

As good as the concept was - and it sounds good in the abstract - the numbers presented by the policies we looked at didn't work for me. Yes, we all get old, and yes, the chances of needing help as one ages are pretty high. The caps on the lifetime payouts, and the ongoing-never- stopping premiums made the insurance far from compelling financially.

Make sure if you're considering this, to forget every marketing thing they come up with about how good it would be to have coverage, and look specifically at dollars and cents. If you're not an actuary or accountant yourself, have someone who is - and who is not employed by the insurer - take a hard look at the policy you're considering. It may make sense, or it may not.

You may be better off putting the cash you'd have been spending in LTC premiums as extra investment on your own - maybe in a tax advantaged retirement plan - and saving up for the chance you may have to use it for LTC. If you do, the money's there. If you wind up not needing LTC, the money'd still be there for your estate instead of just having receipts for unused insurance premiums.

And, some medical conditions make the odds of your needing it go up....and the insurers - not being idiots - know them and if the conditions make it too likely, they won't issue a policy. Of course you can get the policy when you're young and healthy...and pay those premiums for decades longer.

TL: DR - Caveat emptor.

I work for high-income docs and have in a variety of roles for 30 years. They are the prime target for every insurance program known to man, and paranoid enough to buy more than they should in some cases.

When these LTC policies first went mainstream a couple decades ago there were some GREAT opportunities for single premium coverage that had significant lifetime total benefits if triggered. That lasted about 2-3 years before underwriters figured out they were going to lose their ass. The continued evolution of these, in the direction the OP is seeing, was the result. In many cases the policies available now suck for everyone but the insurers.

IMHO for folks with reasonably significant and secure retirement asset planning this is a waste, or at a minimum should be looked at with skeptical cynicism as Joel describes. For those without that asset planning already in place, well they already need to be redirecting money into investments and time into prayer rather than LTC policies, IMHO. While it is POSSIBLE you will need long term care, it is a certainty that you will live longer than yesterday and you will need assets during that certainty not to be a burden on your family.

Also consider the combination of the likelihood of needing long term care coupled with the duration and cost. Salesmen and ads will tell the scariest scenario of many years and extreme costs. Yes, both possible if you're a vegetable and have the misfortune of surviving a decade. More likely, you will die sooner and be less sick.

Stats that are shown by carriers are around 2.2 years average duration in LTC (higher for women) and costs are all over the map. Insurer's will tell you $350,000/year, other sources $50,000-$120,000 per year. Depends on type of care of course. For a couple years that's not insignificant, but it's something many can absorb with other changes. Not everyone, I get it.

Back to my clients as example since it's a good illustration - they are already planning for and will have assets to spend that much or more each year of retirement being well, so they are actually cheaper to care for when they stop traveling, buying wine and Porsches, etc. In almost every case, only reason for LTC coverage is asset preservation and they're already leaving a metric shit-ton to kids anyway, most aren't concerned with that.

For us mere mortals, we probably have other options in worst case scenario. Again, if your retirement planning is built around supporting a lifestyle of $50-100K (today dollars) through age 90-93 you're probably ok. If in addition you have a paid off house that could be leveraged or sold, then that is already a financial insurance policy, just invested 100% in real estate. That is exactly how we look at our home - it will be worth a lot when our kids get and sell it if we live to 93, but in the event that we needed to sell and tap into that value due to the misfortune of long illness or living to 105, well, that's my house and investment and I'm going to use it.

YMMV due to amounts, pessimism, views on estates, etc.

So you have nothing other than the benefit if you keep paying?
If that is the case than forget it. Put the money in something else like a high yield saving acct. every month.

If it is something like whole life insurance. Again take out what you have paid in and forget it.

Remember the story about you buying your insurance and financial professional a Yacht or second home on the water. Yeah, its true.

I think the 20% policy increase notice I just got is just the first of many big ones to come until they force us older policy holders out.

I’ll reevaluate this weekend but I’m betting I’m going to do something different.