How do you track a fully paid up long term care policy?

Diels Alder

The policy is a single premium universal life insurance with an LTC rider. If LTC isn't needed, then there is a death benefit. If LTC is needed, then the policy will pay for that based on its market return (e.g., if market does well, the total amount for paying the LTC will be higher). It seems like this should be tracked since it will have a direct impact on future cash flow, as well as the policy could be surrendered which would result in almost 100% return of premium.

Mark1104

to me, the asset value is today's current value, i..e if you called the company and cashed it out, how much would they send you? 

anything is the future is uncertain and dependent on certain events occuring.  that isn't an 'asset' to me...

 It's not the value of the death benefit (because "I" can't get that - my heirs can :-)) 

it's also uncertain whether you'll ever get the LTC benefit.  For most people, they never need it because their demise happens in a way that LTC isn't needed.  

the only thing that is certain is that you can call the company today and ask for all your money back - - whatever they quote you is the CURRENT VALUE.

All just my two cents. 

Mark1104

@Diels Alder - what is the current value of the policy? that number could be set up as an 'other asset'.

if you surrendered the policy today, how much would be returned to you? do you get quarterly statements of its value? 

Diels Alder

@Mark1104 - the “current value” of this hybrid long term care policy is not a single number. If I go on claim then it will pay a monthly amount up to the amount of the “LTC benefit” until that amount is all depleted. For example, if the LTC benefit is 100k and the monthly payment maximum is a 5k, then it would pay for 20 months. So in that case 100k could be set up as as asset in my Quicken account. However, I can always surrender my policy and get back $. That amount changes each year, but it will not be the same as the LTC benefit described above. Fwiw, there is a death benefit as well but that will go to my beneficiary so not going to track that in my acct.

So which “current value” do you think I should track? The LTC Benefit or the surrender value? Thanks in advance.

Mark1104

to me, the asset value is today's current value, i..e if you called the company and cashed it out, how much would they send you? 

anything is the future is uncertain and dependent on certain events occuring.  that isn't an 'asset' to me...

 It's not the value of the death benefit (because "I" can't get that - my heirs can :-)) 

it's also uncertain whether you'll ever get the LTC benefit.  For most people, they never need it because their demise happens in a way that LTC isn't needed.  

the only thing that is certain is that you can call the company today and ask for all your money back - - whatever they quote you is the CURRENT VALUE.

All just my two cents. 

Diels Alder

This was really helpful. Thanks so much.