...(hope) your insurer maintains the policy...
willthrill81 wrote: ↑
Wed Oct 17, 2018 11:32 am
Even if all you do is break-even, which I don't believe is likely to be the case, that must be compared to the alternatives: paying for LTCi and hoping that rates don't go up dramatically and your insurer maintains the policy or becoming impoverished so that Medicaid will step in. None of these are ideal, but some are far less so than others.
What's your plan to deal with the risk of LTC?
From this and other posts you've made, you seem to be under the impression that an insurance company can cancel a long-term care policy for any reason. That's false. Long-term care insurance policies canNOT be canceled by the insurance company. If the insurer stops selling new policies, they must continue to service and honor all the policies they ever sold. The only party that can cancel a long-term care policy is the policyholder. Over 100 insurance companies incurred long-term care insurance claims last year, totaling almost $15 Billion. 87 of those 100 companies don't sell long-term care insurance anymore, but they are legally obligated to pay all claims and service those policyholders.
...paying for LTCi and hoping that rates don't go up dramatically...
If long-term care policies had the same regulations today that they had 15 years ago, then, yes, I would be concerned about dramatic price increases. But just like new cars are safer because they have airbags and anti-lock brakes, LTCi policies are safer now because of the Rate Stability Regulation. To prevent rate increases, 41 states have enacted very strict pricing regulations for new
For an insurance company to get approval to sell a new long-term care insurance policy today, the policy must comply with the following pricing regulations:
It must include ALL prior rate increases in the new pricing, and
It must include a pricing “cushion” (about 10%) as extra protection from future rate increases.
For example, if the older policy sold by the insurance company cost $1,000 per year for X benefits and that policy had an 80% rate increase, a new policy with X benefits must be priced no less than $1,980. Here’s how that’s calculated:
$1,000 (older policy pricing)
plus 80% (older policy rate increase)
plus 10% (cushion)
= $1,980 (new policy pricing)
So I'm not concerned about new policies have exorbitant rate increases because they already have all the old rate increases included in the current pricing.
Additionally, these 41 states have removed the profit incentive from rate increases. If an insurer seeks a rate increase on one of these newer policies, they have to REDUCE THEIR PROFITS and they can't price any net profit into the rate increase itself.
So, based upon the new regulations, I'm not worried about exorbitant rate increases on my long-term care policy.
...becoming impoverished so that Medicaid will step in...
44 states now offer Long-Term Care Partnership Programs which can protect 100% of your savings from Medicaid even if your long-term care policy runs out of benefits.
15 years ago most states did not have LTC Partnership Programs. If your policy ran out of benefits you were out of luck. Today, in 44 states, a consumer can protect most, if not all, of their assets if they buy a policy that has an amount of benefits equal to (or near) their net worth.