LTC Coverage

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big bang
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LTC Coverage

Post by big bang »

Received a rate increase notification;
Location: HCOL
Ages 62 / 63
Daily benefit amount: $161
Total Lifetime Benefit: Unlimited
Premium: approx. $1,000 a year for each of us.
Is it a reasonable policy?
Thank you!
(1) save a lot, (2) select an asset allocation containing both stock and bond asset classes, (3) buy low cost, widely diversified funds, (4) allocate funds tax-efficiently, and (5) stay the course.
mtmingus
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Re: LTC Coverage

Post by mtmingus »

Try to estimate the costs at

https://www.genworth.com/products/care- ... lator.html

Your numbers look a lot better than genworth's with 4 and 5years Benefit Multipliers.
chw
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Re: LTC Coverage

Post by chw »

Seems to be reasonable- especially with the unlimited lifetime benefit.
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willthrill81
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Re: LTC Coverage

Post by willthrill81 »

$58k of annual benefit won't cover all the costs of a nursing home, but it should at least mostly cover everything else. With an unlimited lifetime benefit, I'd definitely keep that policy.
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Kookaburra
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Re: LTC Coverage

Post by Kookaburra »

Can LTC providers just raise rates anytime they want on existing policies? Doesn’t quite seem fair.
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willthrill81
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Re: LTC Coverage

Post by willthrill81 »

Kookaburra wrote: Tue Oct 20, 2020 9:52 pm Can LTC providers just raise rates anytime they want on existing policies? Doesn’t quite seem fair.
On old policies, basically yes. I believe that most states now regulate the premium increases on newer policies. That doesn't mean that they can't go up because they sometimes do, but they have to demonstrate that there is a genuine actuarial need for doing so.
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BruDude
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Re: LTC Coverage

Post by BruDude »

Without knowing the other policy details, I'd say that is still an extremely good price and you can't even get an unlimited benefit anymore. If the policy has a COLA/inflation increase benefit, you're pretty much stealing from the insurance company. Even for a 5-year benefit on a new policy you'd be paying 3-4x the price.
neilpilot
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Re: LTC Coverage

Post by neilpilot »

willthrill81 wrote: Tue Oct 20, 2020 9:56 pm
Kookaburra wrote: Tue Oct 20, 2020 9:52 pm Can LTC providers just raise rates anytime they want on existing policies? Doesn’t quite seem fair.
On old policies, basically yes. I believe that most states now regulate the premium increases on newer policies. That doesn't mean that they can't go up because they sometimes do, but they have to demonstrate that there is a genuine actuarial need for doing so.
The premium on my "old policy", purchased back in 1999, hasn't changed. IIRC the brochure that described our group LTCI indicated that it was a "fixed" premium.

Maybe our policies aren't old enough? :D
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Stinky
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Re: LTC Coverage

Post by Stinky »

Kookaburra wrote: Tue Oct 20, 2020 9:52 pm Can LTC providers just raise rates anytime they want on existing policies? Doesn’t quite seem fair.
I believe that most all LTC policies are "guaranteed renewable". That is, the insurance company can't cancel you, but they can raise your rates.

Those rate increases almost always require state regulator approval. Different states approve different amounts of rate increases, so your premium rate from (name of insurer) may be different from your friend who lives in another state.

There may be a few older policies that are "non-cancellable"; that is, rates can't be increased. But those aren't common.
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Re: LTC Coverage

Post by nisiprius »

(Oops, Stinky scooped me). I think whether and how much they can increase premiums depends on the case-by-case judgements of your state's division of insurance.

I agree that an unlimited lifetime benefit is worth thinking about keeping. And $1,000/year each seems reasonable.

Without going into policy details, we were paying about $2,600 year each but the arrangements "fully paid off in ten years," which roughly doubled the annual premium, and we had opted for 5% annual compounded increase in benefit, which also roughly doubled the annual premium. And we were getting less because we only had a 6-year benefit (with shared-care rider), and a 180-day exclusion. So, same ballpark.
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bsteiner
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Re: LTC Coverage

Post by bsteiner »

I agree with several of the comments that the unlimited benefit period is an important factor. The purpose of insurance is generally to protect against things that are unlikely to occur but would cause a hardship if they were to occur. The chance of needing care for a very long time is an example of this.
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JoeRetire
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Re: LTC Coverage

Post by JoeRetire »

big bang wrote: Tue Oct 20, 2020 7:08 pm Received a rate increase notification;
Location: HCOL
Ages 62 / 63
Daily benefit amount: $161
Total Lifetime Benefit: Unlimited
Premium: approx. $1,000 a year for each of us.
Is it a reasonable policy?
Thank you!
While the daily benefit is low (at least for my part of the country), the unlimited part is terrific!
Do you have any inflation rider?
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Artful Dodger
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Re: LTC Coverage

Post by Artful Dodger »

Kookaburra wrote: Tue Oct 20, 2020 9:52 pm Can LTC providers just raise rates anytime they want on existing policies? Doesn’t quite seem fair.
As noted by others, the company has to apply for the right to raise your rates through the state's department of insurance.

The key is they are raising rates on everybody in your class. So, for all policies of a certain type or form sold in X years. They can't go in and cherry pick you based on medical history or age. Also, when they raise rates, you are assumed to still be your age of issue. So, if you were to price a similar policy now sold by the company, you'll still have a lower rate on your older policy, even after the increase.
Katietsu
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Re: LTC Coverage

Post by Katietsu »

JoeRetire wrote: Wed Oct 21, 2020 12:33 pm
big bang wrote: Tue Oct 20, 2020 7:08 pm Received a rate increase notification;
Location: HCOL
Ages 62 / 63
Daily benefit amount: $161
Total Lifetime Benefit: Unlimited
Premium: approx. $1,000 a year for each of us.
Is it a reasonable policy?
Thank you!
While the daily benefit is low (at least for my part of the country), the unlimited part is terrific!
Do you have any inflation rider?
Even without inflation coverage, it does protect well against the one serious risk that I am most concerned about. I am concerned about the situation where there is a healthy spouse and a spouse in need of assistance and this occurs at a “young” age and for an “extended” time. I understand that a 63 year old with Alzheimer’s and a 15 year life span is not the typical patient but it is the one that can derail the finances of the healthy spouse.
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JoeRetire
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Re: LTC Coverage

Post by JoeRetire »

Katietsu wrote: Wed Oct 21, 2020 1:20 pm
JoeRetire wrote: Wed Oct 21, 2020 12:33 pm
big bang wrote: Tue Oct 20, 2020 7:08 pm Received a rate increase notification;
Location: HCOL
Ages 62 / 63
Daily benefit amount: $161
Total Lifetime Benefit: Unlimited
Premium: approx. $1,000 a year for each of us.
Is it a reasonable policy?
Thank you!
While the daily benefit is low (at least for my part of the country), the unlimited part is terrific!
Do you have any inflation rider?
Even without inflation coverage, it does protect well against the one serious risk that I am most concerned about. I am concerned about the situation where there is a healthy spouse and a spouse in need of assistance and this occurs at a “young” age and for an “extended” time. I understand that a 63 year old with Alzheimer’s and a 15 year life span is not the typical patient but it is the one that can derail the finances of the healthy spouse.
Perhaps that depends on your expectations regarding inflation.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
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big bang
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Re: LTC Coverage

Post by big bang »

willthrill81 wrote: Tue Oct 20, 2020 9:56 pm
Kookaburra wrote: Tue Oct 20, 2020 9:52 pm Can LTC providers just raise rates anytime they want on existing policies? Doesn’t quite seem fair.
On old policies, basically yes. I believe that most states now regulate the premium increases on newer policies. That doesn't mean that they can't go up because they sometimes do, but they have to demonstrate that there is a genuine actuarial need for doing so.
It's look like this policy is looked by the New York state insurance regulator.
(1) save a lot, (2) select an asset allocation containing both stock and bond asset classes, (3) buy low cost, widely diversified funds, (4) allocate funds tax-efficiently, and (5) stay the course.
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big bang
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Re: LTC Coverage

Post by big bang »

BruDude wrote: Tue Oct 20, 2020 11:55 pm Without knowing the other policy details, I'd say that is still an extremely good price and you can't even get an unlimited benefit anymore. If the policy has a COLA/inflation increase benefit, you're pretty much stealing from the insurance company. Even for a 5-year benefit on a new policy you'd be paying 3-4x the price.
The inflation coverage is an optional periodic increase.
Last time that they have offered an increase to the daily benefit was in 2018. Before that it was in 2015.
I am not sure of the frequency or what triggers them to offer daily benefit increase.
(1) save a lot, (2) select an asset allocation containing both stock and bond asset classes, (3) buy low cost, widely diversified funds, (4) allocate funds tax-efficiently, and (5) stay the course.
ncbill
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Re: LTC Coverage

Post by ncbill »

willthrill81 wrote: Tue Oct 20, 2020 8:48 pm $58k of annual benefit won't cover all the costs of a nursing home, but it should at least mostly cover everything else. With an unlimited lifetime benefit, I'd definitely keep that policy.
Here it'd cover an ALF just fine.

Even with significant assistance (feeding, changing, bathing) the ALF I used last year cost under $4,000/month for a private room versus the $8,000+/month semi-private room at the nursing home from where I moved my terminal relative last year so they could die in the ALF around the corner from me instead of at the nursing home across town.

People on this forum are awfully glib about spending their last days/weeks/month in a nursing home.

Trust me, you'd rather die anywhere else than on the custodial (not rehab) side of a nursing home.
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