An Issue You Would Not Expect with LTC Premiums

[gabrewer]

Not sure if this is really an issue for the health forum or the money forum, but for me it is more financial matter at this point in time.


My wife and I purchased LTC policies nine years ago (at age 51). We had a guaranteed rate period of five years. The premium has remained the same, but I'm always bracing myself every year to see announcement of an increase.


So imagine my surprise -- and puzzlement -- when upon getting this year's statements to see that the billing for each policy has actually gone down a bit -- a little more than $200 on each policy. Not a drastic reduction, but every little bit helps.



Now I'm not going to stir things up by inquiring with the insurance company or our agent -- I'll just pay it. The statement of benefits appears to be exactly the same as in past years -- even increases on some items for inflation.


So I'm just wondering if anyone out there has experienced the same or has any idea of what may be going on here. Our company is United of Omaha (a subsidiary of M of O). To my knowledge the policy is not "participating" -- as I understand that Northwest Mutual does offer such an animal.


Anyway, this is so unusual I just thought I would share. Happy New Year!

 

[REWahoo]

I think you've found a unicorn.

 

[Janet H]

You might do some digging to make sure that the stated coverage has not changed.

A few years ago we had a substantial rate hike and one option offered to was to maintain the old rate but reduce the coverage. As I recall I had to "accept' the changes and call out a clear choice at the time.

 

[zippy2020]

Not sure what you mean by "participating". Do you mean you bought a non-partnership policy - one that pays taxable benefits?

As long as you and your spouse have run the scenarios and are adequately prepared for the additional taxable income should you and/or spouse ever need to file a claim, then the lower premiums, even if only a small reduction, are a nice little plus for you, and a happy start to 2020.

 

[gabrewer]

Not sure what you mean by "participating". Do you mean you bought a non-partnership policy - one that pays taxable benefits?

"Participating" is a term you sometimes see in relation to traditional whole life insurance policies -- typically sold by mutual life insurance companies. Policy owners "participated" in the financial performance of the company in the sense of getting a "dividend" -- accounting wise actually a refund of past premiums paid -- annually on the policy anniversary date. It sort of made the high premiums on these policies more palpable over time. A few years ago I read an article which reported that Northwest Mutual was offering an LTC policy with this feature.


Cheers

 

[zippy2020]

>>...that Northwest Mutual was offering an LTC policy with this feature.>>

Ah, got it! Thank you for the explanation. Our LTCi policies are 20 yrs old so I haven't paid much attention to the newer policies.

 

[gerntz]

Great for you! Not our experience - yet.