Long Term Care Insurance Settlement Offer

[jroon]

Long term lurker here. I appreciate all the wisdom shared on this forum and would appreciate any recommendations regarding this settlement offer.

This is a California partnership plan.

My offer - Age 67

Current Max Daily benefit: $415
Inflation benefit: 5% compounded
Benefit period: 6 years
Total Lifetime Benefit: $910, 602
Annual Premium: $2672

Settlement Offer:

Cash Payment - $3952
Maximum Daily benefit: $311
Inflation benefit: 5% compounded
Benefit period: 4 years
Total Lifetime Benefit: $455,301
Annual Premium: $1684

Spouse's Offer - Age 75

Current Max Daily benefit : $415
Inflation benefit: 5% compounded
Benefit period: 6 years
Total Lifetime Benefit: $910,602
Annual Premium: $4411

Settlement Offer :

Cash payment: $6916
Maximum Daily benefit: $311
Inflation benefit: 5% compounded
Benefit period: 4 years
Total Lifetime Benefit: $455,301
Annual Premium: $2682

My retirement assets are between 1 and 2 million. The only health diagnosis I have is Osteoporosis. My spouse takes blood pressure and cholesterol medications. We both have relatives that have spent between 5 and 10 years in nursing homes, but no known dementia issues.

I posted this on the Bogleheads forum also but did not receive many replies.

 

[Sunset]

I'm being dense here.
Your Offer , is this what you currently have ?
Settlement Offer, what is this, is this the insurance company saying take a lower plan because (why)

 

[OldShooter]

Are "my offer" and "spouses offer" the current terms of existing policies? Assuming so, you can assume that any "settlement offer" is more favorable to the insuror than the status quo. It does not seem that the cash payment would be material to your lives. So if you feel you need LTC insurance, keep the status quo and consider whether the policies are adequate or you want to beef them up.

Lots of experts here on LTC. I am just coming from an analytical sort of view.

 

[Brat]

Neither offer would be attractive to me. Statistically, women spend more time in LTC so reject the offer for a woman off hand.

 

[athena53]

Are "my offer" and "spouses offer" the current terms of existing policies? Assuming so, you can assume that any "settlement offer" is more favorable to the insurer than the status quo. It does not seem that the cash payment would be material to your lives.

Agreed on both points. You're giving up half the max lifetime benefit for a measly payment up front and your family histories indicate you might use up that benefit. Your current $415 daily benefit is not enough for decent LTC (my Dad was paying $10K/month in SC before he died last month) so the $new $311 benefit leaves you on the hook for more $$.

Interesting that they're offering cash up front- I hadn't seen that up till now.

 

[Dtail]

My parents received conceptually a similar offer. I rejected the cash offers on both of them.

 

[jroon]

The settlement offer was the result of a class action lawsuit. I listed my current terms first, then the settlement offer terms. Then, I did the same with my spouse.

It is not the cash payment that is attractive, it is the significant reduction in premiums which keep rising every year.

My premium goes from $2672 to $1684 and my spouse from $4411 to $2682. We would keep the inflation rider at 5%.

Thanks.

 

[Golden sunsets]

Why was there a class action lawsuit?

 

[MarieIG]

Agreed on both points. You're giving up half the max lifetime benefit for a measly payment up front and your family histories indicate you might use up that benefit. Your current $415 daily benefit is not enough for decent LTC (my Dad was paying $10K/month in SC before he died last month) so the $new $311 benefit leaves you on the hook for more $$.

Interesting that they're offering cash up front- I hadn't seen that up till now.

This.

 

[athena53]

Why was there a class action lawsuit?

It might be this. https://www.longtermcareinsurancesettlement.com/Home/FAQ

Genworth has had a long history of issues with underpricing; they were among the first to offer this product and their estimates of the % of people who would enter LTC, how long they'd stay and the number of policyholders who would let their coverage lapse proved to be too optimistic, resulting in huge rate increases and cutbacks in coverage.

 

[Dtail]

It might be this. https://www.longtermcareinsurancesettlement.com/Home/FAQ

Genworth has had a long history of issues with underpricing; they were among the first to offer this product and their estimates of the % of people who would enter LTC, how long they'd stay and the number of policyholders who would let their coverage lapse proved to be too optimistic, resulting in huge rate increases and cutbacks in coverage.

Exactly.
My mother has her premiums fixed through 2027, so didn't make sense to accept any cash.

 

[RobbieB]

I hate Genworth. They refused to pay and cancelled my claim. Great news they got sued and lost. Can't think of a company that deserves it more.