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Pay LTC increase or take nonforfeiture option?
Old 11-20-2020, 08:21 PM   #1
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Pay LTC increase or take nonforfeiture option?

Just got a 19% premium increase letter from my LTC provider. I believe even my new premium is considered quite low ($82/month), since I signed up in my 40s before things went south in the industry.

Nevertheless, I'm wondering whether to take the "contingent nonforfeiture" option. Under that option, I make no more payments, and the waiting period and daily max benefit stay the same, but the lifetime max benefit is reduced.

I'd be curious to hear your opinion on this. Has anyone taken this option?
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Old 11-21-2020, 01:05 AM   #2
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At less than $1,000 per yr.
I'd keep it as just 6 months in a nursing home would be more than 40 yrs worth of payments.

Of course knowing the lifetime max, waiting period and daily max benefit, would allow others to make a more knowledgeable decision.
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Old 11-21-2020, 01:53 AM   #3
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Of course knowing the lifetime max, waiting period and daily max benefit, would allow others to make a more knowledgeable decision.
Good point. The daily max is $180 and lifetime max is $197,100 (three years). They haven't told me yet what the lifetime max would be reduced to if I choose the contingent nonforfeiture option. I can't find a mention of the waiting period, but I think it's 90 days.

I know that the policy is supposed to have a 5% benefit increase each year, but I don't see it mentioned either in this paperwork, which seems to have been written to confuse clients.
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Old 11-21-2020, 02:23 AM   #4
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That premium is exceedingly low in comparison to ours. We are paying about $700/month (combined) for two of us.

Unless it becomes financially unsustainable, our strategy is to keep accepting the increases until we are a lot closer to when we might need the policies — somewhere around 75 maybe? Some days I fret that our LTC policies were a mistake.
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Old 11-21-2020, 07:02 AM   #5
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Unless it becomes financially unsustainable, our strategy is to keep accepting the increases until we are a lot closer to when we might need the policies somewhere around 75 maybe? Some days I fret that our LTC policies were a mistake.
I fretted over the sunk cost in our LTC policies until last month when I got diagnosed with Parkinson's. The likelihood of needing it increased dramatically. Why would you drop LTC at 75 just when you would be approaching the years you would most likely need it.
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Old 11-21-2020, 07:09 AM   #6
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I switched my mother's policy from a lifetime of coverage to 3 years at 350 per day with a 100 day elimination period at a cost of 8200 yearly.
The yearly premium is frozen at this rate until 2028 when she will be 95 years old.
it was a tough choice, but it appeared the premiums were going through the roof.
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Old 11-21-2020, 10:06 AM   #7
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Quote:
Originally Posted by Focus View Post
Just got a 19% premium increase letter from my LTC provider. I believe even my new premium is considered quite low ($82/month), since I signed up in my 40s before things went south in the industry.



Nevertheless, I'm wondering whether to take the "contingent nonforfeiture" option. Under that option, I make no more payments, and the waiting period and daily max benefit stay the same, but the lifetime max benefit is reduced.



I'd be curious to hear your opinion on this. Has anyone taken this option?


We made a similar decision. Our payment is also low (about 2k per year for both of us) because we started in our 40s. We declined the COLA and our daily benefit remains at $200 per day but we do have a lifetime benefit (my understanding is these are no longer old).

I figured a more limited benefit for a more reasonable price was a good compromise between trying to fully find something we may never need and self insuring.
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Old 11-21-2020, 10:23 AM   #8
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I don't have LTC - and for me, that ship has sailed. The cost of that policy, even with the increase, does not seem prohibitive so based upon the information you provided, in your position, I would keep it.
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Old 11-21-2020, 10:39 AM   #9
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When DMIL was confronted with this we encouraged her to pay for the original coverage and not step back. I view these as the insurance co trying to get people to cancel.

She passed this summer at 93. Never tapped the LTC. Same as DFIL, who passed at 81.

My parents have also passed. Not a day in nursing home.

Food for thought. We do not have LTC.
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Old 11-21-2020, 11:02 AM   #10
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I would keep it at that low rate. We bought in our early 50s without COLA ($2,900/yr), and it has increased to $5,100/yr., ($425/mo), now in our early 60s. This coming year, we will see an increase, I'm sure. We also question if this was the right thing to do with premiums rising, but, I'm afraid to let it go. I saw what my mother went through with her husband who did not have LTC (and could have used it), and now I see what my mother is going through, health-wise, and she doesn't have LTC, but, does have great health insurance. I fear she will need LTC services in the not-too-distant future. She's 84. It really is a catch 22 situation for many.

We intend to keep ours; I think we'd regret getting rid of it. If we never have to use it, all the better, and it's probably less headache in the long run. It's piece of mind at this point as we age.
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Old 11-23-2020, 02:55 PM   #11
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The daily max is $180 and lifetime max is $197,100 (three years). They haven't told me yet what the lifetime max would be reduced to if I choose the contingent nonforfeiture option. I can't find a mention of the waiting period, but I think it's 90 days.

I know that the policy is supposed to have a 5% benefit increase each year, but I don't see it mentioned either in this paperwork, which seems to have been written to confuse clients.
I called in to find out the new lifetime max if I take the contingent nonforfeiture option. Turns out it's merely the amount of money I've paid in premiums, which isn't much (just under $9,000).
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Old 11-23-2020, 05:11 PM   #12
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I called in to find out the new lifetime max if I take the contingent nonforfeiture option. Turns out it's merely the amount of money I've paid in premiums, which isn't much (just under $9,000).
So basically a refund IF you needed LTC... What a dirty trick they are playing, trying to get you to cancel.
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Old 11-23-2020, 09:12 PM   #13
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I called in to find out the new lifetime max if I take the contingent nonforfeiture option. Turns out it's merely the amount of money I've paid in premiums, which isn't much (just under $9,000).
That really seems like it should be illegal. I guess a lot of cash strapped folks might consider that, without fully grasping.
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Old 11-23-2020, 09:28 PM   #14
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I called in to find out the new lifetime max if I take the contingent nonforfeiture option. Turns out it's merely the amount of money I've paid in premiums, which isn't much (just under $9,000).
That is so outrageous that I think I would call again and ask for something in writing. My first thought was that you might be talking to some clerk who is confused or forgot to explain something properly. Then again, I have heard enough LTC horror stories about getting claims paid, that I think it might really be true.
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