DW and I have LTCI policies and the annual premiums are due on the 10th. We were notified in January of yet another rate increase, this time 64%. This is the third increase in premiums in the last seven years, resulting in rates 220% above where they started.
Since the rates were very reasonable when we took out the policies 20+ years ago, I had initially decided to hold my nose and pay up. But the Covid-19 situation has caused me to re-think my decision and go another route. We have the option of removing the automatic 5% benefit increase rider (compounded annually) from the policy, thus freezing the benefit amount at the current level. This will drop the premium by a substantial 70%, back to an amount close to what we were originally paying. I'm going to take this option.
My rationale for doing so goes beyond the obvious fact I'm [-]cheap[/-] frugal. Being pessimistic, I could say Covid-19 will make it unlikely any of us would survive for an extended period in a LTC facility. Why pay ever increasing rates for something that is even less likely to be of benefit than BCV (before coronavirus)?
While that may be the case for now, no one knows how long the threat of the disease in LTC facilities will continue. However, even if a vaccine shows up in the near future and things go back to normal, the decision to modify our policies to remove the inflation rider is still my preference. DW and I have reached our early 70's with a sufficient conservatively invested nest egg that we should be able to self-insure for our LTC needs, especially with the benefits from the LTCI policy we will retain.
I just cut our expenses by $200/mo.
