Long Term Care Insurance Premium Increase

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TravelforFun
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Long Term Care Insurance Premium Increase

Post by TravelforFun » Wed Mar 18, 2015 11:17 pm

My LTC Insurance Company notified me today that they will increase my premium by 25% in May, 25% next May, and 20% in May 2017. Has anyone on this forum experienced such a sharp premium increase? We've been paying $250 a month for our policy which would cover LTC for both of us for 3 years at $7,000 per month, inflation adjusted.

LeeMKE
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Re: Long Term Care Insurance Premium Increase

Post by LeeMKE » Wed Mar 18, 2015 11:29 pm

We've had our policy for 8 or 9 years. I keep expecting to see a premium increase, but so far nothing. Those are large increases, and our broker explained that we should expect increases at some point. I'll be watching to hear if others are having similar increases when their pool of co-insured begin tapping the carrier.
The mightiest Oak is just a nut who stayed the course.

JustCurious304
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Re: Long Term Care Insurance Premium Increase

Post by JustCurious304 » Wed Mar 18, 2015 11:47 pm

Last year CalPERS gave me the option to almost double my premium on LTHC insurance in order to keep the inflation protection. I chose to pay the same amount and not buy inflation protection. Wish I had never bought the policy as I've had three increases in about 17 years.

island
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Re: Long Term Care Insurance Premium Increase

Post by island » Thu Mar 19, 2015 12:01 am

Who do you all purchase your insurance from, what's the company?

adamthesmythe
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Re: Long Term Care Insurance Premium Increase

Post by adamthesmythe » Thu Mar 19, 2015 7:10 am

> 25% in May, 25% next May, and 20% in May 2017

Telling you that in advance makes it sound like they REALLY want out of the business.

TravelforFun
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Re: Long Term Care Insurance Premium Increase

Post by TravelforFun » Thu Mar 19, 2015 7:32 am

island wrote:Who do you all purchase your insurance from, what's the company?
Unum through my previous employer.

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SanityCheck
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Re: Long Term Care Insurance Premium Increase

Post by SanityCheck » Thu Mar 19, 2015 7:38 am

Yes, I agree with the above comment........your company is losing money in their LTC insurance business unit. They really want to cancel everyone.....but don't want the backlash from a PR standpoint.....so they will price you out of the market. I predict very few insurers being left in this market in the next 5-10 years !

dhodson
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Re: Long Term Care Insurance Premium Increase

Post by dhodson » Thu Mar 19, 2015 7:52 am

Those actually aren't that high of increases compared to others lately.

Mitchell777
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Re: Long Term Care Insurance Premium Increase

Post by Mitchell777 » Thu Mar 19, 2015 8:32 am

Does inflation adjusted mean the policy is $7K per month at purchase and the $7K is adjusted for inflation each year even though you are not yet using it? Thanks

FBN2014
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Re: Long Term Care Insurance Premium Increase

Post by FBN2014 » Thu Mar 19, 2015 8:46 am

There are hybrid products on market that give LTC coverage such as annuities with a LTC rider or whole life policies where you can cancel at any time and get all your premiums back or if you never use the LTC benefit before you die then your heirs get the death benefit. I don't like traditional LTCI for the very reason you sight - no guarantees on what the premium will be in the future and if you never need the coverage or cancel you lose all the premiums you paid in.
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

TravelforFun
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Re: Long Term Care Insurance Premium Increase

Post by TravelforFun » Thu Mar 19, 2015 8:50 am

Mitchell777 wrote:Does inflation adjusted mean the policy is $7K per month at purchase and the $7K is adjusted for inflation each year even though you are not yet using it? Thanks
My monthly benefit would be adjusted for inflation each year whether or not I am receiving the benefit payments.

Dandy
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Re: Long Term Care Insurance Premium Increase

Post by Dandy » Thu Mar 19, 2015 9:26 am

Pretty scary. Insurance companies just don't have a handle on how to price these policies. As the premium goes up I would imagine healthier policyholders will tend to drop coverage leaving a riskier pool hanging on - thus possibly a death spiral (oft overused term).

I love insurance but am very wary of LTC because you don't (and they don't) know what is going on with rates.

Having worked for an insurance company I wouldn't be thrilled if my insurance company started raising premiums drastically and/or stopped selling the product. It then moves from becoming a source of profit to a expense and a drag on earnings. The major incentive is to just cut the costs. Employees don't want to work in a dying part of the business. Cost pressures affect claim processing/approvals etc. If you contest a claim that is paying $10k a month you can save a lot of money. The criteria for payment isn't always cut and dry - like a death claim. The claimants are usually old and may have diminished capacity so delays can be profitable and claim or legal appeals are not as easy.

You would be surprised how the logic of claim processing can justify actions that we would consider improper how about we owe it to our shareholders to only pay legitimate claims). There are numerous examples related to health care claims. e.g. saying the procedure was experimental, saying the charge was not reasonable or customary (guess who decides that).

LTC should be a viable insurance product low incident but high risk. But today it is very iffy.

blmarsha123
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Re: Long Term Care Insurance Premium Increase

Post by blmarsha123 » Thu Mar 19, 2015 2:44 pm

"FNB2014 Wrote ... There are hybrid products on market that give LTC coverage such as annuities with a LTC rider or whole life policies where you can cancel at any time and get all your premiums back or if you never use the LTC benefit before you die then your heirs get the death benefit..."

I wonder if anyone has experience with the hybrid products? (Is there another forum or thread to discuss?) Reason I ask, these products (life ins, annuity, IRA with LTC rider) were very briefly mentioned at a retirement seminar that I attended last week. The way they were pitched, was to designate a portion, say 200K, that could then be drawn at 2% a month for LTC. So 4K a month directly for LTC, roughly 4 years, for example. The withdrawals are tax free, if I understood correctly (although as FNB2014 wrote, if you never use the LTC benefit, then your heirs pay the taxes.)

Thanks,
Bob

FBN2014
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Re: Long Term Care Insurance Premium Increase

Post by FBN2014 » Thu Mar 19, 2015 3:30 pm

"The withdrawals are tax free, if I understood correctly (although as FNB2014 wrote, if you never use the LTC benefit, then your heirs pay the taxes.)"


Bob, if the LTC benefit is purchased with the hybrid life insurance product then there would be no taxes due from the heirs since life insurance proceeds are not taxable to the beneficiary, but it may be taxable to your estate if the estate exceeds the exemption amount (I believe its around 5.3 million for federal, state exemption depends on the state you reside in.)
"October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May March, June, December, August and February." - M. Twain

blmarsha123
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Re: Long Term Care Insurance Premium Increase

Post by blmarsha123 » Thu Mar 19, 2015 3:35 pm

Good point, FNB2014.

For me, the IRA is probably the route that I would take.

Regards,
Bob

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Uncle Pennybags
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Re: Long Term Care Insurance Premium Increase

Post by Uncle Pennybags » Thu Mar 19, 2015 3:51 pm

Dandy wrote:If you contest a claim that is paying $10k a month you can save a lot of money. The criteria for payment isn't always cut and dry - like a death claim. The claimants are usually old and may have diminished capacity so delays can be profitable and claim or legal appeals are not as easy.
Insurance companies are money changers and not to be trusted. Cramer's, the Mad Money guy, father recently died. Before his father died he was in a long term care facility and his LTC insurer denied payment. Cramer had to sue them to get what his father paid for for many years. He won but it cost him as much in legal fees as he got from the insurance company. He mentioned this on his TV show but didn't mention the insurers name. He didn't have to as they are all the same.

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GerryL
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Re: Long Term Care Insurance Premium Increase

Post by GerryL » Thu Mar 19, 2015 4:10 pm

I've had my policy for more than 10 years and have had a couple of increases, but never anything as dramatic as 25%. Each time the company gave me some options, including stopping the inflation protection for a year, to mitigate the rate increase. Based on news stories last fall I was really expecting an increase on the next invoice, but the premium has held steady for at least 3 years now.

Dandy
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Re: Long Term Care Insurance Premium Increase

Post by Dandy » Thu Mar 19, 2015 4:19 pm

He didn't have to as they are all the same

We have a lot of benefit from the profit motive it spurs innovation and risk taking and society reaps that benefit. There is a downside, as with most things, and when profit and public or customer welfare conflict the pressure is usually on keeping profits. e.g. Auto makers under report or delay reporting serious issues that result in recalls (as a former Pinto owner I am sensitive to that :oops:

Despite that sometimes companies step up and do the right thing. I wouldn't tar all insurance companies with the same brush but only that they, like all for profit companies, have a lot of pressure on profits which often leads to questionable actions that find internal justification.

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Uncle Pennybags
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Re: Long Term Care Insurance Premium Increase

Post by Uncle Pennybags » Thu Mar 19, 2015 5:02 pm

Dandy wrote: I wouldn't tar all insurance companies with the same brush but only that they, like all for profit companies, have a lot of pressure on profits which often leads to questionable actions that find internal justification.
The internal justification is they and their children live wile me and my children die, the law of the jungle is alive and well. Those in the executive suite insulate themselves from the killing by only asking for results from those below them not directing how they get them.

skepticalobserver
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Re: Long Term Care Insurance Premium Increase

Post by skepticalobserver » Thu Mar 19, 2015 5:30 pm

The hybrid products that are either annuities or whole life policies with LTC riders are conceptually great. Look closely, however, at the details. Fees and loads abound and significantly impair the LTC payout. Note fees incurred to generate a multiple of the premium for LTC coverage. Many policies are merely equity indexed annuities or universal indexed life policies with all the complexities and problems those products entail.

Is it likely that you'll receive, on demand, return the full premium after the (rather large) sales commission is paid? Of course not-- there's a rider (fee) to "guarantee" that return of premium.

blmarsha123
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Re: Long Term Care Insurance Premium Increase

Post by blmarsha123 » Thu Mar 19, 2015 6:05 pm

Thanks, skepticalobserver; no such thing as a free lunch no matter how good, conceptually, the products sound.

Thanks,
Bob

bnes
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Re: Long Term Care Insurance Premium Increase

Post by bnes » Tue Oct 18, 2016 3:16 am

The CalPers LTC rate increases are the subject of a class action claim:

http://www.calpersclassactionlawsuit.co ... pdate.html

newstreetnj
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Re: Long Term Care Insurance Premium Increase

Post by newstreetnj » Tue Oct 18, 2016 8:42 pm

Bought a policy from Tiaa ~ 15 yrs ago. Now administered by Metlife. Only 1 increase so far. Bob

Hubris
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Re: Long Term Care Insurance Premium Increase

Post by Hubris » Tue Oct 18, 2016 9:28 pm

My wife (53) and I (56)bought LTC last year, via a universal life product with a lump sum premium and annual premiums at fixed price for life. Very useful for us. If we don't use the LTC coverage, then we have the life insurance benefit for 2nd to die, therefore creating an estate which is a secondary priority for us. Also, lump sum accrues interest @4% annually. There are surrender charges but we can get entire lump sum amount back for 1st 7 yrs without penalty (and without interest.). After 1st 7 yrs, surrender charges apply but return will be original lump sum plus interest less surrender charges; and after 7 yrs surrender charges are less than accrued interest.

I won't go into our reasoning for buying the coverage other than to say some of it was driven by logic and some by emotion, boh of which seem valid to us. The fixed pricing for annual coverage was very appealing and we currently view this coverage as a fixed income-like holding given that we might decide to self insure in 7-10 years, and recover our principal and accrued interest (less surrender charges.)

Hope this is helpful.
H

jimishooch
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Re: Long Term Care Insurance Premium Increase

Post by jimishooch » Wed Oct 19, 2016 12:47 pm

option besides a stand alone LTC insurance policy...

https://www.buaweb.com/cms/resource_lib ... ochure.pdf

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teacher
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Re: Long Term Care Insurance Premium Increase

Post by teacher » Wed Oct 19, 2016 5:28 pm

From their website:
"Unum no longer markets the sale of new group or individual policies for long term care (LTC) insurance."
http://www.unum.com/Employees/Benefits/longtermcare

We have had LTC insurance thirteen years, and we are waiting for the shoe to drop. We knew premiums could possibly increase, but now it seems probable.

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Index Fan
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Re: Long Term Care Insurance Premium Increase

Post by Index Fan » Wed Oct 19, 2016 6:26 pm

I had LTCI at one time but dropped it. Not only are premiums drastically increasing, many providers are getting out of the business. I didn't want to pay for a product that I would have to cancel after many years and many thousands of dollars spent on it.

The final straw was realizing how I get the runaround from health/dental insurance providers, and realizing when I am very old and not in mental shape to deal with insurance people, I will more than likely be screwed by them. You can find such LTCI horror stories if you look around online.

Edit: just noticed this one:
Uncle Pennybags wrote:Insurance companies are money changers and not to be trusted. Cramer's, the Mad Money guy, father recently died. Before his father died he was in a long term care facility and his LTC insurer denied payment. Cramer had to sue them to get what his father paid for for many years. He won but it cost him as much in legal fees as he got from the insurance company. He mentioned this on his TV show but didn't mention the insurers name. He didn't have to as they are all the same.
"Optimum est pati quod emendare non possis." | -Seneca

blueberry
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Re: Long Term Care Insurance Premium Increase

Post by blueberry » Wed Oct 19, 2016 7:32 pm

Index Fan wrote:I had LTCI at one time but dropped it. Not only are premiums drastically increasing, many providers are getting out of the business. I didn't want to pay for a product that I would have to cancel after many years and many thousands of dollars spent on it.

The final straw was realizing how I get the runaround from health/dental insurance providers, and realizing when I am very old and not in mental shape to deal with insurance people, I will more than likely be screwed by them. You can find such LTCI horror stories if you look around online.

Edit: just noticed this one:
Uncle Pennybags wrote:Insurance companies are money changers and not to be trusted. Cramer's, the Mad Money guy, father recently died. Before his father died he was in a long term care facility and his LTC insurer denied payment. Cramer had to sue them to get what his father paid for for many years. He won but it cost him as much in legal fees as he got from the insurance company. He mentioned this on his TV show but didn't mention the insurers name. He didn't have to as they are all the same.
From my experience, there is something very wrong with the concept of LTCI because trying to collect on it when you qualify for it happens when you are likely no longer able to deal with an insurance company. If my Dad hadn't had 2 proactive kids dealing with the insurance company, there is no way he could have collected on it. It seemed crazy that I had to take my 90 year old decrepit dementia Dad to a particular doctor in a crazy location to get a sign off on the fact that he needed care (which was so ridiculously obvious). I was really livid that I had to put him at that kind of risk when he really should not have been out of the facility at that point. We'd tried to get the coverage earlier but they were clearly suspicious about it. He's gone now, and the insurance did come through for his last few months, but not retroactively. That was enough craziness for me to not bother with LTCI. I'm pondering maybe annuity purchase at some point to automatically cover expenses, or what? I really don't want my kid to have to deal with my old age problems (and esp., insurance companies!). In general, insurance gives peace of mind and I'm all for that, but I can't feel that way about LTCI after seeing how difficult it was to collect for my Dad.

As my late uncle said, "growing old is not for wimps".

bb

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teacher
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Re: Long Term Care Insurance Premium Increase

Post by teacher » Thu Oct 20, 2016 10:14 am

There are three alternatives to Long Term Care insurance for the elderly who need medical supervision:
–Family takes on full responsibility (as we did for our mother from ages 92 to nearly 97 in our home)
–Pay out-of-pocket for a nursing home, which amounts to $9,000 a month on average in our area.
–In-home care which is not less expensive than a nursing home if the patient needs around-the-clock care.
We chose to keep Mom with us as she had done for our grandmother. Our mom, like her mother, was very sweet and cooperative even when vascular dementia set in. If she had been irascible, it would not have been possible because physical needs were a 24/7 proposition.

After seeing the direction the LTC insurance industry is moving, we probably would not have purchased LTC insurance and would have resigned ourselves to self-insure instead.
If rates are increased in future, we will probably consider renegotiating the benefits to stay within budget. If rate increases become untenable, we will cancel and self-insure. But that would really frost my cookie if it came to that since we have already paid premiums for thirteen years.

Insurance actuaries can purchase "Errors and Omissions Insurance", but the consumer of LTC insurance products are not protected against arbitrary premium increases. Those who purchase LTC insurance need protection from insurance actuary errors.

Nova1967
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Re: Long Term Care Insurance Premium Increase

Post by Nova1967 » Thu Oct 20, 2016 5:54 pm

I would just assume go without LTC, I have no heirs and if I get to the point where I need long term care I don't believe I will be able to enjoy my assets in such pursuits as travel,golf, going to nice restaurants etc. If worst comes to worst I have a home worth about 400k to take care of things for a while. It's probably good for some people but every situation is different

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