I read through all the replies. Some are accurate but some not. I'm new to the Villages and didn't expect to see the constant barrage of info about anything financial, but I guess I understand it. There are a ton of retirees down here and everyone wants to sell something. I do have some professional points that folks can take or leave;
Traditional LTC insurance is generally the use it or lose it variety. As people live longer and the costs get higher to care for someone, particularly if they have cognitive issues that can go on for years, the insurance companies pay out more and more in claims, so the premiums will only get higher. Premium pays for protection of assets. I've seen nest eggs and retirement accounts decimated because of the costs of not only facility care, but in-home care of a spouse.
It's true that if you dont use it, you dont get anything back, and premiums will go up but, like it or not, how to pay for medical care like this is a huge financial risk for retirees, and most don't want to be a financial burden to their kids. People who buy LTC insurance are playing the odds, but statistics do show that chances are good one or both spouses will need some form of care when they get older.
To those who say "oh, I'll just rely on Medicare or Medicaid to take care of things.": Have a better plan, because that one sucks. The more Medicare, Medicaid, and government is involved, the less choice you will have in what happens. Medicare stops paying after 90 days. Medicaid is the door to crappy facilities, restricted options for care, and spend-down scenarios with longer and longer lookback periods. These things are not what someone wants to deal with when they have to make hard decisions about the care of a loved one.
Because of the down sides of LTC insurance, companies do offer other options for those who want some protection against having to come up with $6 or 8,000 a month to take care of their spouse. I've seen some hybrid products introduced that are sometimes a better option. Some are life-insurance based, others are annuity-based. If you have a decent financial planner, he or she should have let you know about these. I've seen annuity products that double or triple a one-time investment if the funds are used for LTC needs. That one requires good health but the person gets it back if they don't use it. For those who say that annuities are always bad; I disagree. They are very effective when used for the right purpose for the right person, and, like anything else, are just a piece of a good plan. The point is, investigate what is out there. There are actually some great solutions if huge long term care expenses might be in your future.
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