Incredible increase in LTC policy premium

[bondi688]

Is that the Smith & Wesson LTC policy?

That and the "flying off Empire State Building" policy are too messy, Hemlock sounded more civilized. I do not understand why there has been no real evolution in the thinking in term of how to control your last exit when everyone wants control of his/her life. I had seen horrible ordeals of relatives dying of cancers and the physical, emotional and financial hardship their ends cost their families. If I have a terminal illness and will spend the last days in severe pain and suffering, narcotized out and just have nursing home or hospice staff turns me over once a day at the cost of $1000 a day, I do wish there is a way to decide where, when and how I check out. I am glad that option is available in some enlighted states.

 

[imoldernu]

Because I rarely see this "home protection" discussed here, thought this article could be of interest to some.

Protecting Your House After You Move Into a Nursing Home | ElderLawAnswers

Note the "lein on home" paragraph.

Also this:

But there are some circumstances under which the value of a house can be protected from Medicaid recovery. The state cannot recover if you and your spouse owned the home as tenants by the entireties or if the house is in your spouse's name and you have relinquished your interest. If the house is in an irrevocable trust, the state cannot recover from it.

 

[ejman]

That and the "flying off Empire State Building" policy are too messy, Hemlock sounded more civilized. I do not understand why there has been no real evolution in the thinking in term of how to control your last exit when everyone wants control of his/her life. I had seen horrible ordeals of relatives dying of cancers and the physical, emotional and financial hardship their ends cost their families. If I have a terminal illness and will spend the last days in severe pain and suffering, narcotized out and just have nursing home or hospice staff turns me over once a day at the cost of $1000 a day, I do wish there is a way to decide where, when and how I check out.

Well, I live in Oregon where assisted suicide is legal and available. Death with Dignity Act | Death with Dignity Act

 

[timo2]

I looked at the CalPERS press release. CalPERS Approves Long-Term Care Premium Increase

If it were me, I would switch to the 10-Year/Retained Inflation options. That seems like it would be plenty, without starting over with a new insurer.
http://www.calpers.ca.gov/eip-docs/about/press/pr-2012/oct/ltc-conversion-options.pdf

 

[bondi688]

Well, I live in Oregon where assisted suicide is legal and available. Death with Dignity Act | Death with Dignity Act

I know not everyone thinks or wants that, but that option really should be available if safeguard against abuse can be put in place.

 

[SumDay]

I do wish there is a way to decide where, when and how I check out. I am glad that option is available in some enlighted states.

bondi688, I like your thinking. After prolonged end-of-life happenings with my parents, this has become a very important topic to me. I can only hope the enlightenment spreads.

 

[ejman]

I looked at the CalPERS press release. CalPERS Approves Long-Term Care Premium Increase

If it were me, I would switch to the 10-Year/Retained Inflation options. That seems like it would be plenty, without starting over with a new insurer.
http://www.calpers.ca.gov/eip-docs/about/press/pr-2012/oct/ltc-conversion-options.pdf

The devil is in the details. I haven't actually received the detailed proposal of how this would work yet.

 

[Live And Learn]

I haven't purchased LTC insurance and it does worry me. I have set aside 107k outside my porfolio to over 14 months in a facility. Sad to think this way, but my "hope" is that the second person to go in never gets discharged so that the house pays the rest of the amount owed.

 

[Stanley]

Well, I live in Oregon where assisted suicide is legal and available. Death with Dignity Act | Death with Dignity Act

We try not to remind people of that.

 

[ripper1]

My parents bought a LTC policy years ago. My dad could have used it and gone into a nursing home. Instead we as a family decided to keep him at home as long as possible. The last 18 months of his life we got lots of help from Hospice Care which was covered by Medicare. Mom has had some problems but is not yet ready for full nursing home care. She has been in and is not out of an assisted care facility and is now at home with my brother and sainted sister in law providing assistance for her. My guess is that she will probably never go into a nursing home with the way my family thinks about such things. My very frail next door neighbor probably could have been admitted to a nursing home several years ago and started collecting on his LTC insurance. Instead his family with help from me have worked to keep him at home as long as possible. He has recently gone into an excellent assisted care facility and as yet has not collected on his LTC insurance. I took him to a medical appointment yesterday and seeing how he is declining I cannot imagine how he could live long enough to ever come out ahead on his LTC policy. These personal experiences and what I see in threads like this one have convinced me that LTC insurance is not a good idea...........except for the insurance companies.

+1......I totally agree. This is what family is supposed to be about. Help one another.

 

[Mulligan]

Yes it is. Thank you for the links. It's interesting that 8% of men and 13% of women stay longer than 3 years. And that tail end risk is what worries me and keeps me from unpluging so far (plus the $21 k already thrown down this rat hole)

Its funny how people can read the same statistics and come up with a different answer. I think of it as, I have a 92% chance of skating through financially pretty much unscathed. If I have a 92% success rate in the sports-book, I would bet 7 days a week! Of course I am looking for a reason not to buy this as I see insurance as a drain on my finances. If I took out every insurance policy available to protect myself, I would have nothing to protect. I certainly understand the $21k issue. That philosophy has also caused me to not sell some stocks back in the day when I should have! Everyone's situation is different though, and I am certainly understanding of that. Now if they would actually sell a truly meaningful policy, like a low cost plan that doesn't kick in until after a 3 year stay, I would listen.

 

[gerrym51]

my wife and i bought 4 year policies 10 years ago-150 per day/5 percent yearly inflation/now at about 220 per day. total price then(and now 2700 yearly).

she 57/me 52 at the time.

the calpers policies for unlimited lifetime benefits were probably underpriced.

although the stronger players in the market will probably remain the ones that underpriced policies are leaving the business.

as far as i can tell even the stronger players are dropping unlimited benefit and years policies.

 

[timo2]

although the stronger players in the market will probably remain the ones that underpriced policies are leaving the business.

as far as i can tell even the stronger players are dropping unlimited benefit and years policies.

Here is an article about the situation What's Killing The Long-Term Care Insurance Industry - Forbes

My DW has an individual LTC policy with CNA Insurance Companies purchased in 2002. In 2003, CNA quit selling individual policies, but kept the individual ones they already sold. So it is concerning that the premiums might go up extremely at some future time.

 

[timo2]

The devil is in the details. I haven't actually received the detailed proposal of how this would work yet.

That is true. However, from what I've been reading, you might have some big sticker shock if you want to change insurers, not only because you are older now than when you first purchased LTC, but new policies are more expensive anyway, because apparently nearly all the old policies were underpriced.

My group LTC plan through work changed underwriters several years ago, and the first thing they did was to raise the premiums, unless I took the option of reducing my plan and keep the premium the same. I reduced my plan slightly. The reason they used for increasing the premium or reducing coverage was that the original insurer had under priced the policies.

 

[imoldernu]

We have gone through 3 providers, and are currently under a trust-type arrangement with SHIP where they basically do the income and payout, but do not sell or provide much service.

SHIP - Welcome

This long list of providers who have exited the LTC business is just partial.

Long Term Care Rate History Inactive

Our original policy was written by Travelers, then transferred to Conseco, then transferred to the Pennsylvania trust company (SHIP). The original policy had some restrictions on premium increases, so our costs haven't gone up very much over the past two decdes.

(LTC... Pensions) same problem?

 

[REWahoo]

My DW has an individual LTC policy with CNA Insurance Companies purchased in 2002. In 2003, CNA quit selling individual policies, but kept the individual ones they already sold. So it is concerning that the premiums might go up extremely at some future time.

DW and I also purchased LTC policies from CNA in 2000 (ages 52 and 53), with premiums under $600/year each. The policies had a 10 year guarantee of premium and I was expecting an increase when the guarantee expired a couple of years ago, but (fingers crossed) so far no change.

Our policies have a 90 day waiting period and a 5% compound annual inflation rider. I'm hoping the fact the policies are for three years rather than lifetime coverage will keep us off the radar screen for some of the big increases we've been hearing about.

 

[mickeyd]

Every time that I read one of these LTCi premium increase posts I am encouraged more and more that I made an ititial decision years ago that I would not toss my hard-earned money after this flawed insurance product. As insurance companies drop this product or choose to continue it but jack up the rates each year (seemingly) I wonder how many more LTCi policyholders will come to the same conclusion that I made a while ago.

 

[ejman]

Its funny how people can read the same statistics and come up with a different answer. I think of it as, I have a 92% chance of skating through financially pretty much unscathed. If I have a 92% success rate in the sports-book, I would bet 7 days a week! Of course I am looking for a reason not to buy this as I see insurance as a drain on my finances. If I took out every insurance policy available to protect myself, I would have nothing to protect. I certainly understand the $21k issue. That philosophy has also caused me to not sell some stocks back in the day when I should have! Everyone's situation is different though, and I am certainly understanding of that. Now if they would actually sell a truly meaningful policy, like a low cost plan that doesn't kick in until after a 3 year stay, I would listen.

Yes a policy like the one you describe would certainly be appealing if priced appropriately but with the experience I'm having I would want some guarantee as to the rate of allowable premium increases.

 

[ejman]

Every time that I read one of these LTCi premium increase posts I am encouraged more and more that I made an ititial decision years ago that I would not toss my hard-earned money after this flawed insurance product. As insurance companies drop this product or choose to continue it but jack up the rates each year (seemingly) I wonder how many more LTCi policyholders will come to the same conclusion that I made a while ago.

I'm starting to come around to your way of thinking. I'm now starting to realize that the original LTC unlimited policies were fundamentally a different product than normal insurance - say life, home, auto or excess liability or medical as it used to be before Obamacare. There was a limit to the insurers potential liability and some good calculations as to future obligations could be made. Apparently not so for LTC unlimited policies.

 

[Dawg52]

DW and I also purchased LTC policies from CNA in 2000 (ages 52 and 53), with premiums under $600/year each. The policies had a 10 year guarantee of premium and I was expecting an increase when the guarantee expired a couple of years ago, but (fingers crossed) so far no change.

Our policies have a 90 day waiting period and a 5% compound annual inflation rider. I'm hoping the fact the policies are for three years rather than lifetime coverage will keep us off the radar screen for some of the big increases we've been hearing about.

Mine is similar to yours. I pay $460/yr to Unum and also has a 5% inflation rider, but caps out at twice the initial per annum benefit. So if I live in my 80's and then I need the policy, it won't pay anywhere near what the going nursing home rates will charge. But I can live with it thinking of it as a supplement policy. This plan will pay up to 6 years of nursing home care. My policy is part of a group plan my old employer offered and still offers. Portable of course.

I've had it for 10 years and also hope it falls under the radar screen for similar reasons. No increases to this point.

 

[obgyn65]

Personally, I would not drop it - even after an 85% increase.

I'm conflicted and very tempted to just drop it but would certainly appreciate your input.

 

[JoeWras]

We have a policy and are waiting to find out what our increase will be. They are still working it through the state regulators.

Frankly, we bought this more for early life issues than late life. By perhaps bad coincidence, we've had young friends' spouses come down with early dementia problems (age less than 65). It has been devastating to them and their families, both emotionally and financially. After seeing this, we bought the LTC when a group window opened at w*rk.

It will be a tough call. Right now the premium is very affordable. I can't see how it won't go up significantly. We shall see.

 

[timo2]

We have a policy and are waiting to find out what our increase will be. They are still working it through the state regulators.

Frankly, we bought this more for early life issues than late life. By perhaps bad coincidence, we've had young friends' spouses come down with early dementia problems (age less than 65). It has been devastating to them and their families, both emotionally and financially. After seeing this, we bought the LTC when a group window opened at w*rk.

That's one of the reasons I and DW have our LTC policies. LTC is not only for the last 5 years of life, but for potential consequences of automobile accidents, premature health conditions, etc. Two years after I bought mine, I had a heart attack at age 51. I've recovered well, but I definitely could not replace my policy after that. Also, I realized that if I were an older person, I would not have recovered so well - it took me 5 years of hard work until I felt somewhat-normal again. An older person with the heart attack I had may indeed have needed some LTC for a period of time.

 

[samclem]

Frankly, we bought this more for early life issues than late life.

If that were my concern, I'd get one of the very reasonably-priced policies without inflation protection. Even buying 2x the coverage is much cheaper (for those who are relatively young) than buying the policies with the inflation costs built into the premium.

Count me as among those waiting for a "pure insurance" product: 24-36 month elimination period, shared benefit between the two of us. I haven't seen anything like that.

 

[martyp]

We have had a LTC policy with CALPERS since 1998 and have paid about $21K for a basic policy currently covering nursing home to $162/day, Residential Care facility to $81/day. It has a 5%/year inflation protection, a 90 day deductible and lifetime coverage. Premiums are currently $1,908/year for the two of us (Ages 64 and 62). There are about 150,000 members enrolled but enrollment has been closed for a few years now.

We just received a notice "You are receiving this notice because your policy provides lifetime benefits and built in inflation protection. Policies of this type are subject to the 2013 and 2014 five percent premium increase, as well as the 2015 premium increase of approximately 85 PERCENT".

My wife and I both got the same letter last week. We are waiting to see what other options will be offered.