Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Genworth LTC price increase
Old 12-17-2018, 05:38 PM   #1
Thinks s/he gets paid by the post
Ready's Avatar
 
Join Date: Mar 2013
Location: Southern California
Posts: 2,370
Genworth LTC price increase

MIL has been paying for a Genworth LTC policy for many years. She currently has paid in about $41K. Her annual premium was $3500 but next year the rate is going up 72% to $6,100.

She has the option of reducing the benefit from lifetime (first 100 days excluded) to a cap of six years. Either way the maximum benefit is $150/day. She is 85 years old, in reasonably good health. Iím new to reviewing LTC policies so Iím not sure if Iím fully knowledgeable on how they work.

My initial thought is that six years seems like a lot of coverage for someone who is already 85 years old. She has enough money to self insure anyway, so if she really needed more than six years of care she would be fine.

Does it make sense to reduce the premium and go with a six year cap. The rate would be $3,800/yr, so a little higher but not too bad of an increase.

Is there anything else I should be aware of before we recommend something to her?
__________________

Ready is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-17-2018, 06:30 PM   #2
gone traveling
 
Join Date: Mar 2015
Posts: 3,508
Quote:
Originally Posted by Ready View Post
She has the option of reducing the benefit from lifetime (first 100 days excluded) to a cap of six years. Either way the maximum benefit is $150/day. She is 85 years old, in reasonably good health.
Six years is a long time for an 85 year old.
But $150/day is not much, depending on what part of the country she live in.

Quote:
She has enough money to self insure anyway, so if she really needed more than six years of care she would be fine.
So why does she have a policy at all?
__________________

joeea is offline   Reply With Quote
Old 12-27-2018, 05:17 PM   #3
Recycles dryer sheets
 
Join Date: Jun 2018
Location: Alameda
Posts: 107
A couple of things to check:
1) Is this a partnership LTC policy? If it is, the benefits received are tax-free. That can be no small advantage, depending on the tax bracket.

2) So total is $54,750/yr after first 100 days. Assume there is NO home healthcare rider? If there is, what percentage of daily benefit does it pay? Some pay 50%, some pay 100%. Note home healthcare must be provided by a licensed bonded agency, not grey labor.

3) At her age a 6-yr cap is probably fine. $3800/yr for a $54K tax-free benefit for the next six yrs still puts her ahead of the game should anything happen, and at her age you NEVER know what's going to happen.

4) Her life expectancy may be longer than you think. My MIL was 84 when she moved to a full-care senior facility for Asst Lvg. You can believe she was extremely shocked to find that her three assigned dining companions were ALL older than she was. One was 99 yrs old and had been in the facility for 40 yrs, moving in with her husband who had been older and who eventually passed away! It was noticeable, btw, that at a 135-unit facility, women outnumbered men by approximately 9 to 1 ratio.

The fastest growing age group globally is ages 80-100+.
zippy2020 is offline   Reply With Quote
Old 12-27-2018, 05:50 PM   #4
Thinks s/he gets paid by the post
timo2's Avatar
 
Join Date: Jul 2011
Location: Bernalillo
Posts: 2,024
I think it is important if the policy allows for home health care.


It it were me, with what you told us, I'd switch to the 6 year. because $150 does not cover the total amount of the daily nursing costs, so she will be self-insuring for a good part of the cost anyway.


from the link:
Below are some national average costs for long-term care in the United States (in 2016). Average costs for specific states are also available.
  • $225 a day or $6,844 per month for a semi-private room in a nursing home
  • $253 a day or $7,698 per month for a private room in a nursing home
  • $119 a day or $3,628 per month for care in an assisted living facility (for a one-bedroom unit)
  • $20.50 an hour for a health aide
  • $20 an hour for homemaker services
  • $68 per day for services in an adult day health care center

https://longtermcare.acl.gov/costs-h...s-of-care.html
__________________
"We live the lives we lead because of the thoughts we think" Michael OíNeill

"We can cannot compel others to do our will" Norman Goldman
timo2 is offline   Reply With Quote
Old 12-27-2018, 07:59 PM   #5
Thinks s/he gets paid by the post
HNL Bill's Avatar
 
Join Date: Dec 2017
Posts: 1,599
Quote:
Originally Posted by Ready View Post
MIL has paid in about $41K. Her annual premium was $3500 but next year the rate is going up 72% to $6,100.
What if it goes up another 72% next year, and the LTC provider lowers the coverage at the same time?

The cost of LTC keeps going up, as do life expectancies, and therefore, the premiums. If she's really not in need of the policy, consider the $41K sunk costs, and ditch the policy.
HNL Bill is offline   Reply With Quote
Old 12-27-2018, 10:07 PM   #6
Thinks s/he gets paid by the post
Ready's Avatar
 
Join Date: Mar 2013
Location: Southern California
Posts: 2,370
Quote:
Originally Posted by HNL Bill View Post
What if it goes up another 72% next year, and the LTC provider lowers the coverage at the same time?

The cost of LTC keeps going up, as do life expectancies, and therefore, the premiums. If she's really not in need of the policy, consider the $41K sunk costs, and ditch the policy.
That has been my concern with LTC policies all along. Each year you really only know what your cost will be for the year. You have no control over future price increases from year to year, but you feel like you need to keep feeding the kitty so you donít lose your investment to date. I donít like entering into an agreement where I have so little control over future prices. But itís tough to cancel the policy altogether at this point just to save $4K, and then have her need care right after we cancel.
__________________

Ready is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Just got first Genworth LTC increase mf15 Health and Early Retirement 17 05-26-2014 08:38 AM
Genworth 2013 LTC Cost Study mickeyd Health and Early Retirement 1 05-02-2013 06:23 AM
Genworth LTC rates increasing steeply on 8/1 dgoldenz FIRE and Money 7 07-01-2012 12:52 AM
Genworth LTC using benifit? Trawler Health and Early Retirement 1 04-01-2011 08:51 PM
Are Genworth LTC policies at risk of default? Bongleur Health and Early Retirement 5 02-02-2011 08:29 PM

» Quick Links

 
All times are GMT -6. The time now is 08:03 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
×