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The dreaded LTC increase letter!
Old 09-05-2015, 03:56 AM   #1
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The dreaded LTC increase letter!

I knew it was only a matter of time, but I thought I'd be spared a bit longer. I just got the letter indicating my LTC premium, which is $49 a month, will go up 40% to $69.

I realize those remain modest numbers compared to some others I've seen (probably because I signed up about 10 years ago in my mid-40s), but I'm wary of future increases and wonder about the long-term viability of the LTC insurance system.

I've been provided with a range of options, including keeping my current coverage (inflated $141 a day) at the higher premium, and reducing the daily maximum benefit and/or lifetime benefit to opt for a lower premium.

But I'm most intrigued by the "contingent non-forfeiture right to change your coverage to paid-up status." That means I don't have to pay any more premiums, my waiting period and daily maximum benefit stay the same, but my lifetime benefit maximum is reduced. It seems like a good way to cut any losses and run.

What do others here think? What choice have you made when faced with an LTC premium increase?
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Old 09-05-2015, 06:32 AM   #2
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Like most others here, I have decided to self-insure. At worse case, the State will provide. Odds are, either your health insurance or medicare will cover the necessary time and expense, or you will never make it out alive.

$69 is still cheap from what I have heard. I suspect as you get older, the premium will exponentially increase.

Coverage of $141 a day is light, if you actually need care. If you are on Medicare, that covers ~90 days (30 free, plus another ~60 at ~$100 a day). Your SS will be used to cover what it can. My father's care was over $6K a month, and went on for 5 years. And that amount was almost 10 years ago.

The paid up status is interesting. It's basically a paid up life insurance policy, they just pay a bit before you die. Depending on your asset level, and what you want to leave behind, that might be the better choice. Put the current $69 in the investment account, or buy more term life insurance.

If the $69 was static, like true life insurance, I would keep likely keep paying.
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Old 09-05-2015, 06:53 AM   #3
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Originally Posted by Focus View Post

What do others here think?
What's the total lifetime benefit (dollars or duration) under your present policy? On the face of it, if this is for 3 years of coverage or more, it sounds like you've got a low rate and I would keep paying the premium. If you still need the coverage and haven't found a better option, I wouldn't look for ways to decrease coverage, I'd accept the rate increase and take all the coverage they'd sell me at that rate. FWIW, under the Federal LTCI program, a 55 year old would pay $130/mo for $150/day, 3 year, 4% inflation coverage. And the person would need to meet underwriting criteria.
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Old 09-05-2015, 07:57 AM   #4
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What's the total lifetime benefit (dollars or duration) under your present policy? On the face of it, if this is for 3 years of coverage or more, it sounds like you've got a low rate and I would keep paying the premium. If you still need the coverage and haven't found a better option, I wouldn't look for ways to decrease coverage, I'd accept the rate increase and take all the coverage they'd sell me at that rate. FWIW, under the Federal LTCI program, a 55 year old would pay $130/mo for $150/day, 3 year, 4% inflation coverage. And the person would need to meet underwriting criteria.
That's useful information, especially since it matches my situation so closely. Thanks. My recollection is that my policy is for three years, equivalent to around $150,000 in total benefit (not reflecting the 5% inflation adjustment).

As has been said by others many times before, the tricky part is that premiums could just keeping going up, so there's no way to calculate if it's a good deal or not -- until the end.
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Old 09-05-2015, 08:16 AM   #5
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What choice have you made when faced with an LTC premium increase?
Faced with a similar increase last year, we choose to continue the coverage at the higher premium. Discussed here: LTC insurance premium "surprise"
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