Genworth LTC at it again

[mf15]

Just got my new notice for price increases, or less coverage. Now they even
have a new wrinkle. a Flex Benefit Option, will have to study this. They are really trying to get everyone to cancel,before they use the insurance,or have little insurance when needed.Also added going from a 90 day to 180 day elimination period.

Oldmike

 

[Golden sunsets]

We've just received the newest price increases on our Prudential LTC policies. They presented 3 options, but our agent who sold us the policy indicated there are many more options and has arranged to have those options sent to us. We can afford the increase in premiums, but will consider some of the options, as our 5% inflation factor, that we have maintained for 13 years, actually gives us such a high current daily rate that we can probably consider lowering either the inflation rate or current daily rate, or both, going forward.

 

[Dtail]

I chose to freeze my mother's premium at 8.2k yearly for 7 years in exchange for giving up an unlimited years benefit and change to a 3 year maximum benefit at the same $350 daily.
My mother would be 95 y.o. at the time of the next increase.
All just a guessing game which no one really wants to play.

 

[Golden sunsets]

The norm for long term care has shifted from when policies were written decades ago, to more Assisted Living from skilled nursing, aka Nursing Home care. The price point is quite different between these two levels of care.

The facility that my DM was in, a Memory Care Unit, was dedicated to keeping her in AL as long as possible, vs a nursing home. She never did progress to skilled care, so the 1.5 years that she resided in AL cost much less than if she had required skilled care.

 

[Bongleur]

The solution is to change the Federal law so that LTC plans can offer LONGER elimination periods.

Buy a 3 year elimination period.

Self-fund for the 1st three years, and most will die by then. So the cost for the longer living portion of the cohort goes way way down.

It becomes true insurance for a low probability event.

IIRC Kitces has an article on this.

 

[athena53]

The solution is to change the Federal law so that LTC plans can offer LONGER elimination periods.

Buy a 3 year elimination period.

Self-fund for the 1st three years, and most will die by then. So the cost for the longer living portion of the cohort goes way way down.

It becomes true insurance for a low probability event.

I might go for that. It would be a real blessing to know that my future LTC costs were capped (based on some reasonable estimate of 3 years of LTC costs) and insurance would take over after that. I'm surprised that regulators don't allow that.

 

[pb4uski]

The solution is to change the Federal law so that LTC plans can offer LONGER elimination periods. ...

Are you sure that it is federal law that prohibits longer elimination periods? I've never heard that and I worked in the insurance industry (but not LTC). I'm skeptical that is the reason. Got a cite?

 

[Out-to-Lunch]

Yes, Kitces's article was influential in my personal thinking: https://www.kitces.com/blog/can-increasing-the-long-term-care-insurance-elimination-period-make-coverage-appealing-again/

According to that article, it is common for state laws, (not Fed.), to forbid long elimination periods:

The problem is that, in an effort to “protect” consumers, most states actually require all long-term care insurance sold in the state to have an elimination period of no more than 365 days, a remnant of laws passed several decades ago when long-term care insurance was cheap enough that ultra-long elimination periods were never anticipated as being likely/necessary. Yet as long-term care insurance has evolved, these state laws today are requiring elimination periods so “low” that it is rendering long-term care insurance unaffordable for many, which limits the pool of participants, forces industry consolidation, and potentially amplifies the challenges.

 

[Chuckanut]

The solution is to change the Federal law so that LTC plans can offer LONGER elimination periods.

Buy a 3 year elimination period.

I tried that a few years ago and got nowhere. I figured that since the vast majority of people don't come near needing 3 or more years of LTC payments, the long elimination period should make for reasonable premiums plus guard me against being wiped out. It simply wasn't offered.

 

[Marita40]

After 10 years of holding a Genworth LTC, I made the tough decision to drop it completely this year. Honestly I'm conflicted, but the price increase is astronomical and will easily double then triple then quadruple in years to come, as that has been the pattern so far. It is a gamble both ways, but the continued increases are getting ridiculous, and the options to continue to lower coverage are also crazy.

 

[REWahoo]

I've posted previously about the history of price increases on our CNA LTC policies we purchased in 2000. After being notified in 2020 of yet another increase that would have seen our original premiums increase by a total of 320%, we opted to remove the 5% compound annual benefit increase and freeze our daily benefit amount at the then current level of $265/day. In return our new premiums were reduced substantially - to slightly less than they were when we took out the policies in 2000.

We did this because we've reached the age and financial situation to allow us to self-insure but keeping the policy will help reduce the possibility a long stay could result in a big hit to the nest egg. Keeping the LTCi policies should pay a significant chunk of any LTC costs, even though the benefit amount will be degraded over time due to inflation.

 

[Dawg52]

I had a LTC policy through my old employer but a few years ago I got a 50% price increase when I turned 55(I think). I could see the writing on the wall so dropped it. Now if someone offered a policy with a longer elimination period I would certainly consider that.

 

[mf15]

Tuff decision. Currently have 4 years coverage, my dad had Alzheimers and it took him
8 years to pass. I am much older than he was when he got it, and I have no symptoms,but who knows. What I saw happen to him, was not pretty. Oldmike

 

[Golden sunsets]

I've posted previously about the history of price increases on our CNA LTC policies we purchased in 2000. After being notified in 2020 of yet another increase that would have seen our original premiums increase by a total of 320%, we opted to remove the 5% compound annual benefit increase and freeze our daily benefit amount at the then current level of $265/day. In return our new premiums were reduced substantially - to slightly less than they were when we took out the policies in 2000.

We did this because we've reached the age and financial situation to allow us to self-insure but keeping the policy will help reduce the possibility a long stay could result in a big hit to the nest egg. Keeping the LTCi policies should pay a significant chunk of any LTC costs, even though the benefit amount will be degraded over time due to inflation.

Our situation is much like yours RE, right down to the 5% inflation component of our policies. We are currently awaiting a number of pricing options from reducing the inflation rider to the daily rate or both. Our insurance agent concurs that we can easily self insure, but he observed that he has seen a number of situations where the healthier spouse(usually the wife) worked themselves to the bone keeping their mate at home with no assistance in order to preserve assets(a poor quality of life scenario). So a primary benefit of a policy is to provide for at home care, which is less expensive and preferred, without reducing the remaining assets. That is exactly what our wishes are and our policy provides for in home care.

 

[youbet]

Our situation is much like yours RE, right down to the 5% inflation component of our policies. We are currently awaiting a number of pricing options from reducing the inflation rider to the daily rate or both. Our insurance agent concurs that we can easily self insure, but he observed that he has seen a number of situations where the healthier spouse(usually the wife) worked themselves to the bone keeping their mate at home with no assistance in order to preserve assets(a poor quality of life scenario). So a primary benefit of a policy is to provide for at home care, which is less expensive and preferred, without reducing the remaining assets. That is exactly what our wishes are and our policy provides for in home care.

We all have our own ways of looking at the financial aspects of end of life care and I certainly respect yours. But I wouldn’t consider myself self-insured unless we could cover all reasonable scenarios. This would include making care decisions the same as if we had a generous and flexible LTC policy. And the surviving spouse would still be left with assets for the balance of his or her life.

It’s ok to reduce the remaining assets as long as the balance easily supports the survivor.

 

[Golden sunsets]

We all have our own ways of looking at the financial aspects of end of life care and I certainly respect yours. But I wouldn’t consider myself self-insured unless we could cover all reasonable scenarios. This would include making care decisions the same as if we had a generous and flexible LTC policy. And the surviving spouse would still be left with assets for the balance of his or her life.

It’s ok to reduce the remaining assets as long as the balance easily supports the survivor.

Youbet; I agree 100% with everything in your post. We are in this unique category of being well able to self insure, but we also can afford LTC premiums, so looking for the sweet spot, of reducing premiums, while also not reducing our potential final estate.

 

[RetireeRobert]

I have a hybrid LTC/Life Insurance policy. With a single pay premium (or another option was ten years to fully paid), covered both wife and I for LTC in one policy, the 2nd-to-die life insurance pays a multiple of my single premium to kids if I never need the LTC (or don't use all of it), since premium is paid there are never any premium increases.

So, hybrid solved two of the big problems most people find objectionable in the traditional LTCi policies: (1) guaranteed no premium increases; (2) single premium is never "wasted" if you don't use the LTC--the heirs get the life insurance.

I investigated the traditional LTCi policies and kept coming to those two objections myself. Hybrid solved them for me. YMMV

 

[easysurfer]

I'm going down the rabbit hole of applying for a hybrid LTC/Life Insurance policy.

When asked by a broker today if I have any outstanding health issue (which I don't) I just said "No" and did not elaborate . There was dead silence and then he went, "Oh, okay ..." and moved on with the phone conversation.

 

[easysurfer]

Got a little deeper in the hybrid LTC rabbit hole.

Application submitted and underwriting phone interview scheduled. Just gathered all my medical history for the phone interview (not until over a week away).

I'm a bit puzzled though. For underwriting, don't the insurance companies check your medical records anyhow? If so, then why do an interview? As seems kind of like a company asking you to provide you credit history then the company does a credit check on you anyway.

 

[ejman]

Just got a notice from CalPERS that a rate increase of 52% will take effect by November of 2021 and if necessary a second increase of another 25% fall of 2022. Ive been contributing to this sinkhole since 1998> I've come to the conclusion that it is one of the dumbest "investments" I've ever done. We can cover nursing home costs for the average stay of 3 years from our investments the only reason I've kept it is in case of one of those infrequent 10+ year long stays. I wish there was a LTC policy available with a 3 year wait period at reasonable rates but no such thing exists to my knowledge.

 

[easysurfer]

Just got a notice from CalPERS that a rate increase of 52% will take effect by November of 2021 and if necessary a second increase of another 25% fall of 2022. Ive been contributing to this sinkhole since 1998> I've come to the conclusion that it is one of the dumbest "investments" I've ever done. We can cover nursing home costs for the average stay of 3 years from our investments the only reason I've kept it is in case of one of those infrequent 10+ year long stays. I wish there was a LTC policy available with a 3 year wait period at reasonable rates but no such thing exists to my knowledge.

If not on medicaid, which isn't a bed of roses either, I kinda think when comes to LTC there are three doors to choose from:

Door #1: Go broke paying for LTC
Door #2: Go broke paying for LTC insurance
Door #3: Be a lucky one and die early

 

[Dtail]

If not on medicaid, which isn't a bed of roses either, I kinda think when comes to LTC there are three doors to choose from:

Door #1: Go broke paying for LTC
Door #2: Go broke paying for LTC insurance
Door #3: Be a lucky one and die early

Can't there be a door #4 whereby you die "late", but have no need for LTC.

 

[easysurfer]

Can't there be a door #4 whereby you die "late", but have no need for LTC.

Guess so. that's the really lucky door .

 

[Chuckanut]

Guess so. that's the really lucky door .

Actually, half of us won't need LTC, and most of those who do will need it for less than two years.

 

[zippy2020]

.....I'm a bit puzzled though. For underwriting, don't the insurance companies check your medical records anyhow? If so, then why do an interview? As seems kind of like a company asking you to provide you credit history then the company does a credit check on you anyway.

Full medical underwriting is EXPENSIVE for a company. That's why "non-med" policy limits have risen substantially. But when LTC is in the mix, full underwriting is a necessity.

Like many consumers you are misunderstanding the M.I.B., aka Medical Information Bureau, which is what insurers check on every life/health policy. That merely says that Mr. XX or Ms. YY applied for a policy on a certain date, and if any medical impairments were noted, they are indeed "coded in" to the M.I.B.

But if you have never applied before for a 'required medical' policy, the M.I.B. has no record on you. The insurer cannot check your medical records without permission anyway - HIPAA law - and many HMOs/doctors take forever to answer insurer questions.

It's faster and more direct to just ask the applicant for their medical history. Also, you might be surprised (or again, might not be) that some people flat-out lie about their medical history. Or, to be charitable, they don't understand how some of their medications/past history can affect the overall underwriting rating.