It certainly would be better than Long Term Care Insurance. We have
discussed my problems with that system before, but here's a new one.
Since the Assisted Living home gets it's money (cash from you)up-front,
it has NO incentive to prepare and send it's paper work to the LTC
insurer. The LTC insurer has NO incentive to ask for or process the
paperwork. The longer it can stall, and it does, the longer they have
my money working for them. The insurer was also threatening to lapse
because they had not received anything from the home for 2 months.
The suckers who buy this junk are the ones shelling out the cash to keep
Mama in the home and constantly fighting both the home and the insurer
to get reimbursement.
BTW, here in Phoenix the costs for a moderate home are $2800/month.
An immediate annuity for a 90 year old would yield 18%, so the yield
for a 95 year old should be much higher.
So a $200,000 immediate annuity would cover the costs of a home
indefinitely possibly reducing the burden on the assets of loved ones.
If I had this discussion 8 years ago, my then 80 yo MIL would have taken
out a deferred annuity (my wife as beneficiary) to cover her assisted
living and NEVER would have considered paying the high premiums and low
coverage for LTC insurance. I was (still am, I guess) financially naive
and swayed by the ad hype and my MIL fears. I hope none of you sell
this stuff. It's bad financial planning and a PITA to use.