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Comment by forrestthewoods | Hacker News Reader

$140,000 in premium and $73,000/year in payout seems like a terrible deal for the insurance company.

Two sets of my grandparents have needed daily helpers for years. And that’s just for regular day to day care. Not in response to a particular trauma.

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It has been a terrible deal. These policies have been a disaster for the industry. They're very expensive and they've raised premiums to cover rising costs, which causes people to drop the policy unless they're sure they'll need it. And then those people often require care for many years, generating massive losses.

Insurance is wonderful when it works, but the conditions for it to work can be quite fragile.

Certain types of insurance can be funny because of how much information asymmetry there is.

Or perfect pricing. When insurance pricing is perfect, it’s never worth it.

“It appears you’re slipping on ice and about to hit a tree with your automobile, to continue your insurance, please deposit $27k within the next 6 seconds”

The basic bargain of insurance is supposed to be: the insured buys it before they foresee needing it, and the insurance company keeps premiums level. If either side defects from this protocol, things fall apart.

No the basic bargain of insurance is a community paying their surplus into a pool that pays out for random unfortunate events that are uncorrelated and could happen to any member of the community.

Adversarial for profit insurance does not make sense as it creates perverse incentives.

LTC policies are such a bad deal they almost bankrupted General Electric.

It is a terrible deal. Most don't offer LTC insurance anymore.

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