Long Term Care Premium Increase Decision

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teacher
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Location: California

Long Term Care Premium Increase Decision

Post by teacher » Sun Dec 31, 2017 12:23 pm

After 14 years of no Long Term Care premium increases, we finally got our letter requiring a 15% premium increase with a promise there will be more increases in future. If we don’t want to pay the increase, (knowing more are on the horizon) here are the options:
•Reduce the benefit level to reflect amount paid to date with no further premiums in future. (Change to a paid-up policy.)
•Reduce policy daily benefits without additional underwriting.
•Reduce policy maximum days benefit period and/or increase the elimination period.
We have not contacted customer service to find out what the reduction in benefits would be for any of the three options. I am hoping to get some input first, so here’s my question:
For those who have received a LTC premium increase notice, what choice did you make and what influenced your decision?

DrGoogle2017
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Re: Long Term Care Premium Increase Decision

Post by DrGoogle2017 » Sun Dec 31, 2017 12:30 pm

I got rid of mine last year after giving it some thought. I only paid with pretax amount for 5 years. A few reasons for dropping my LTC, no AD in my family, there might be longevity gene in my family, the benefits might be shrinking with the same premium, it maybe harder to qualify, easier for my family to manage, but I plan to have 6-figure budget for LTC starting age 80. The budget is there, whether I need it or not. My LTC was only for 3 years, max benefit was $535k.

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teacher
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Re: Long Term Care Premium Increase Decision

Post by teacher » Sun Dec 31, 2017 12:36 pm

In our neck of the woods, the cost of long term care can reach six figures in one year....for each of us.

2017 Cost of Long Term Care By State
http://longtermcareinsurancepartner.com ... e-by-state

stan1
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Re: Long Term Care Premium Increase Decision

Post by stan1 » Sun Dec 31, 2017 12:58 pm

It's really a personal decision that requires some sole searching on your personal risk, longevity, family history, social network, and availability of other family members or friends to provide care. Sometimes caretakers (family, friends, longtime employees) are remembered and thanked as part of estate planning. Age differences or health differences between spouses can be factors. Elderly people who are part of a strong social network may be able to live independently for a longer period of time. Sometimes there isn't a family member willing and able to assist; other times it is assumed a family member will take on this burden out of love and maybe even a sense of familial obligation. It's a many-faceted issue.

These days I think there are a few groups of people who keep long term care insurance: those who can probably afford to self insure their long term care but would rather leave a larger estate to their heirs; those who have income to afford the premiums and are focused on worst case situations (like needing 10 years of nursing home care which is very rare) or not wanting to burden their family members or with a high percentage of net worth locked up in real estate; and those who have a strong family history or even early evidence of cognitive decline leading to a higher expectation of needing years of long term care outside of hospice. People who bought paid in full policies years ago got a pretty good deal but that's not relevant to decisions today.
Last edited by stan1 on Sun Dec 31, 2017 1:00 pm, edited 1 time in total.

DrGoogle2017
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Re: Long Term Care Premium Increase Decision

Post by DrGoogle2017 » Sun Dec 31, 2017 12:59 pm

teacher wrote:
Sun Dec 31, 2017 12:36 pm
In our neck of the woods, the cost of long term care can reach six figures in one year....for each of us.

2017 Cost of Long Term Care By State
http://longtermcareinsurancepartner.com ... e-by-state
It depends on your situation. I’m a lot younger than my husband, I’m the child bride, haha, but seriously, I’m 8 years younger, the odds that both of us needing nursing care is low. Most likely, one goes first and the other one follow a few years later. Plus I’m female, younger, most likely will live longer. But I will go the route of getting help at home first before a full blown nursing home. The high cost of these facilities are probably is due to high housing cost.

Alan S.
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Re: Long Term Care Premium Increase Decision

Post by Alan S. » Sun Dec 31, 2017 2:53 pm

For people without strong local family ties, relocation to the southeastern states will reduce nursing home costs by over 50% compared to the high cost NE states. Look at such a move as paying half your LTC costs without messing with a dysfunctional LTC marketplace.

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Phineas J. Whoopee
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Re: Long Term Care Premium Increase Decision

Post by Phineas J. Whoopee » Sun Dec 31, 2017 2:54 pm

I have an LTC insurance policy, a group one. Every third year I have the opportunity to bump it up by 5% compounded in return for whatever the new premium at my new age for my group would be for that amount. So far I've accepted them, but may not in the future. It's a case-by-case decision.

My reasons for maintaining the policy have nothing to do with leaving a larger estate. My purpose is to use it to stay out of a nursing home. Where I live Medicaid pays for nursing homes, but not measures short of them. I want the option to stay home with a health aid, or something like that, unless it's absolutely necessary that I be institutionalized, and in the latter case to have a wider range of options than Medicaid offers.

Should I die without collecting anything on the policy I will not feel really, really bad inside.

YMMV (Your Medicaid May Vary).

PJW

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teacher
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Re: Long Term Care Premium Increase Decision

Post by teacher » Sun Dec 31, 2017 3:43 pm

Phineas J. Whoopee wrote:
I want the option to stay home with a health aid...
That is our wish, also. We want to be prepared to be able to stay in our own home. We bought this policy due to it's unique flexibility. It allows family members to be compensated for providing assistance if it is deemed necessary by our physician.

Through the generations, none of our family members have been placed in a facility; they have lived out their last years with family. But if our children are not able or prefer not to continue that trend, we will be prepared financially, but it will cut into inheritances. It's a concern to depend entirely on the portfolio as the market may become erratic in future.

Both of us have short longevity on our fathers' side (mid 50's to early 60's) and very long longevity on our mothers' side (late 80's to mid 90's), so our longevity is not predictable.

Moving is not an option as we have close family ties, and could not separate from our children and grandchildren. Since nursing homes can run $100,000 for a private room per year, it seems at minimum, we should earmark six hundred thousand dollars to cover three years for both of us, maybe more. Of course the hesitation is, how many more times will rates be increased and by what percentage each time? No easy answer.

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