LTC insurance premium "surprise"

dgoldenz said:
Anyone entering a nursing home with LTC paying a benefit has to have lost 2 of the 6 ADL's anyway, so there are no "healthy" people going into a nursing home that are on LTC claim.
Click to expand...

"Healthy" in the study meant healthy at age 65, apparently defined as no symptoms of "diabetes, cancer, lung disease, heart disease, and stroke".
 
Annual update: Three years after our 10 year guarantee of premium expired our LTC rates remain unchanged. Our annual premium billing notices arrived yesterday and the amount due is the same as it was when we first obtained the policies in May of 2000.

Yes, I'm fully aware I'm tempting fate by continuing to post about our good fortune in having no rate increase for the past 13 years.

No, I don't think our luck will last, but I plan to enjoy it while it does.
 
Which company? We just signed my husband up with Genworth. They wouldn't take me.
 
REWahoo said:
Our policy is with CNA, who stopped offering new LTC coverage around 2003.
Click to expand...

Since they are out of the business for almost 10 years maybe they just forgot about you. Once and a while you just get lucky.
 
73ss454 said:
Since they are out of the business for almost 10 years maybe they just forgot about you. Once and a while you just get lucky.
Click to expand...

I suppose it's a dead giveaway (note the pun) that you're getting old when you start associating 'getting lucky' with LTC premiums.... :)
 
REWahoo said:
I suppose it's a dead giveaway (note the pun) that you're getting old when you start associating 'getting lucky' with LTC premiums.... :)
Click to expand...


Yeah, I remember "getting lucky" meant something years ago but I just can't place it.:rolleyes:
 
REWahoo said:
Annual update: Three years after our 10 year guarantee of premium expired our LTC rates remain unchanged. Our annual premium billing notices arrived yesterday and the amount due is the same as it was when we first obtained the policies in May of 2000.
Yes, I'm fully aware I'm tempting fate by continuing to post about our good fortune in having no rate increase for the past 13 years.
No, I don't think our luck will last, but I plan to enjoy it while it does.
Click to expand...
I wonder if this is one of those situations where you're supposed to start setting aside extra funds to save up for the day when they actually raise the premiums. "You've saved for retirement, now it's time to start saving for long-term care insurance."

Maybe you could calculate your payoff ratio as "total payout divided by premiums paid in" and see how much longer you're ahead of the game.

Ideally you'd just keep paying until you die and never need to make a claim, right? Does that mean you win or you lose?
 
Ideally you'd just keep paying until you die and never need to make a claim, right? Does that mean you win or you lose?

Considering my strong family history of Alzheimer's, if I never have to file a claim, that would be a huge win. I hope my family never has to file a claim for me......
 
Independent said:
Maybe you could get more technical. The only ratio I can think of that would have come over from life insurance was lapse rates. They can't keep getting lower and lower because zero is the lower bound.

If it's a matter of requested rate increases aren't getting approved, do you have numbers on what percent of the typical request goes through? (Company names would help here.)
Click to expand...


I am returning to this forum after a long time. So sorry for the super delayed response. I hope you find this helpful.

This article addresses some of points in your post and provides a good summary of what's going on.

A. LTC products were underpriced because:
1. Lapse ratio was underestimated
2. Higher life expectancy is causing longer claim cycle
3. More claims volume than anticipated

Information on % approval rates for rate increase is available in the 10K (annual reports) of LTC insurers. I search (googled) for example "10K Genworth Long Term Care Insurance".

I found this: genworth 10K
I then searched for 'rate increase' and here is an extract:
'...In this regard, we began filing for a rate increase of 18% on two blocks of older long-term care insurance policies in November 2010. As of December 31, 2011, we have received approvals in 39 states which represent approximately 65% of the targeted premiums. The state approval process of an in-force rate increase and the amount of the rate increase varies, and in certain states the decision to approve or decline can take up to two years. Upon approval, premium increases may only occur on an insured's billing anniversary date. Therefore, the benefits of any rate increase may not be fully realized until the implementation is complete...'

For list of LTC Insurers search "List of Long-Term Insurance Companies in USA" or narrow the search results by state.
 
REWahoo said:
Annual update: Three years after our 10 year guarantee of premium expired our LTC rates remain unchanged. Our annual premium billing notices arrived yesterday and the amount due is the same as it was when we first obtained the policies in May of 2000.

Yes, I'm fully aware I'm tempting fate by continuing to post about our good fortune in having no rate increase for the past 13 years.

No, I don't think our luck will last, but I plan to enjoy it while it does.
Click to expand...

What you might want to do is to contact your state's Insurance Commissioner's office and find out whether your company has a premium increase application in process because insurance companies must have LTC premiums approved (after jumping through a bunch of hoops). That's what I did starting about 3 or 4 years ago. I was at least able to get advance notice that (first) something was cooking, and then (this year) that the sucker was ready to come out of the oven. :facepalm:

Latest news: John Hancock will be jacking up premiums this year for LTC policies issued in Maryland. Anticipated increase for lifetime coverage policies: 90%. :mad:

Alex in Virginia
 
I did noodle around on my state's insurance website and stumbled across a 10 year history of LTC rate increases for the companies listed below. Could be helpful to many here as the information provides information on all increases by the listed company, regardless of state:


 
Once again, I'm updating this thread I started almost four years ago.

The other shoe finally dropped. After 14 years without an increase to our LTC premiums I received notice today that they will be going up by 50%. While that is a huge increase percentage wise, our annual premiums were less than $600 each and will increase to $875. The 50% number is roughly an increase of 3% compounded annually over the 14 year period.

We have the option of reducing coverage on either or both our policies rather than paying the increase, but for now I think $875/yr for a policy which, after annual inflation adjustments, will pay out more than $215,000 in benefits is worth keeping. This is subject to change should the rates continue to climb or if our net worth stays healthy as we get older and we feel we can self-insure.
 
Last edited:
REWahoo said:
but for now I think $875/yr for a policy which, after annual inflation adjustments, will pay out more than $215,000 in benefits is worth keeping. This is subject to change should the rates continue to climb or if our net worth stays healthy as we get older and we feel we can self-insure.
Click to expand...

I would tend to agree with your assessment. My homeowner's policy provides coverage of up to $250,000 for replacement in the event my house suffers damage, and my annual premiums run about $750/year - with a $2,500 deductible.

I'd say the chances of me (or anyone else) needing nursing care of up to $200,000 are substantially greater than my house suffering some damage that would need up to $250k in repair/replacement!

Of course, the big unknown is how much more your premiums may rise in the future...but even then, I would consider your situation 'fair', compared to my homeowner's policy.
 
REWahoo said:
Once again, I'm updating this thread I started almost four years ago.

The other shoe finally dropped. After 14 years without an increase to our LTC premiums I received notice today that they will be going up by 50%. While that is a huge increase percentage wise, our annual premiums were less than $600 each and will increase to $875. The 50% number is roughly an increase of 3% compounded annually over the 14 year period.

We have the option of reducing coverage on either or both our policies rather than paying the increase, but for now I think $875/yr for a policy which, after annual inflation adjustments, will pay out more than $215,000 in benefits is worth keeping. This is subject to change should the rates continue to climb or if our net worth stays healthy as we get older and we feel we can self-insure.
Click to expand...

$875 per YEAR is awesome so I am with you - keep the coverage ! And the increase % is why we like to have fluff in our budgets before we ER.
 
Mine is $1546/yr for I don't remember the coverage offhand. But no notice of increase as of yet...
 
HFWR said:
Mine is $1546/yr for I don't remember the coverage offhand. But no notice of increase as of yet...
Click to expand...
Lots of variables on how the policies were/are priced: age, sex, daily benefit amount, waiting period, length of coverage, inflation adjustment, etc.
 
REWahoo said:
Lots of variables on how the policies were/are priced: age, sex, daily benefit amount, waiting period, length of coverage, inflation adjustment, etc.
Click to expand...

Don't have all the info here at w*rk, but my notes say $4500/mo, total $270k, 3% inflation adjusted. Bought policy about 1.5 years ago.
 
Update to this old thread.

Two years ago we were notified of our first premium increase:

REWahoo said:
After 14 years without an increase to our LTC premiums I received notice today that they will be going up by 50%. While that is a huge increase percentage wise, our annual premiums were less than $600 each and will increase to $875. The 50% number is roughly an increase of 3% compounded annually over the 14 year period.

We have the option of reducing coverage on either or both our policies rather than paying the increase, but for now I think $875/yr for a policy which, after annual inflation adjustments, will pay out more than $215,000 in benefits is worth keeping. This is subject to change should the rates continue to climb or if our net worth stays healthy as we get older and we feel we can self-insure.
Click to expand...

Today we were notified our LTC insurance premiums were going up another 30%. That's a increase of 95% in rates during the 16 years we've had the insurance. The premium for each of us is now $1,138, a compound increase of 4.3% per year.

Edit: Note the policies have a 5% per year inflation rider, so the increase in benefits continues to exceed the increase in premiums - FWIW.
 
Last edited:
I dropped mine a couple of years ago. It was a group plan I had through my old employer. The policy was just a bare bones plan anyway and with the steep rate increases I decided to self insure. Being single I don't have to worry about securing a portfolio for a spouse.
 
Our policies are over 20 years old. They are $27xx per year. Increased 80% a while back. Sometimes you just have to look the other way and pay the bills knowing that despite what appears to be a ripoff, it's still the right decision.

Sent from my Nexus 4 using Early Retirement Forum mobile app
 
My fear is that as I grow older I will be literally priced out of the market about the time I am most likely to need the insurance.
 
You must log in or register to reply here.

Similar threads

FiveDriver
What exactly does FEMA Flood Insurance cover?
Replies
5
Views
449
FiveDriver
FiveDriver
erkevin
Advice on Inherited Qualified Annuity and Taxes
Replies
11
Views
521
all4j
A
M
Should I change home/rental house property insurance to ACV policies from RCV polici
Replies
3
Views
459
OldShooter
OldShooter
Chuckanut
Safe Driving Class
Replies
12
Views
378
audreyh1
audreyh1
C
Question on Home Insurance & the Home Value - UnderInsured or OverInsured?
Replies
12
Views
1K
COcheesehead
C

Latest posts

Back
Top Bottom