Genworth premium increase

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hoops777
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Genworth premium increase

Post by hoops777 » Wed Jan 09, 2019 1:35 pm

Between my wife and I we have been paying 3475 a year combined for LTC.We have had the policy for 6 years and it is a Calif Partnership Plan.Basic benefits are currently 253 dollars per day for 3 years with 5% compound inflation and 90 day elimination period.This is for each of us individually.If we keep it as is,our combined rate will increase over 3 years to 4865 by March 2021.We will be 67 and 69 this month.
The cheapest option is a policy that will cost 3230 in 3 years and less up until then.The reduction would be 220 per day for 2 years with the same 5% inflation.There are 2 other options in between these 2.
Thoughts?We are in that area financially where we can afford the premiums and survive a 3 to 400,000 self funding situation down the road,but would rather leave the money to our kids.
K.I.S.S........so easy to say so difficult to do.

Silk McCue
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Re: Genworth premium increase

Post by Silk McCue » Wed Jan 09, 2019 5:29 pm

Based on what you shared I would keep the plan as is and accept the increases. You can always decline further increases in 3 years when you are both in your 70s or you can gladly sign up for more if circumstances indicate.

Cheers

Topic Author
hoops777
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Re: Genworth premium increase

Post by hoops777 » Wed Jan 09, 2019 6:21 pm

It is a 40 pct increase over 3 years or about 450 dollars a year increase for the next 3 years.
K.I.S.S........so easy to say so difficult to do.

Silk McCue
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Re: Genworth premium increase

Post by Silk McCue » Wed Jan 09, 2019 6:50 pm

hoops777 wrote:
Wed Jan 09, 2019 6:21 pm
It is a 40 pct increase over 3 years or about 450 dollars a year increase for the next 3 years.
I understood that from you first post. The cost benefit is huge should you need it. $450 each year increase over 3 years( $2700 total) is about the cost of 10 days of care if paid out of your pockets (it is also inflation adjusted as you state). Given your age and financial position I would do it given the huge downside it protects you against.

Cheers

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hoops777
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Re: Genworth premium increase

Post by hoops777 » Wed Jan 09, 2019 7:07 pm

Thanks.I was thinking the exact same thing.
K.I.S.S........so easy to say so difficult to do.

JoeRetire
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Re: Genworth premium increase

Post by JoeRetire » Wed Jan 09, 2019 7:08 pm

hoops777 wrote:
Wed Jan 09, 2019 1:35 pm
Between my wife and I we have been paying 3475 a year combined for LTC.We have had the policy for 6 years and it is a Calif Partnership Plan.Basic benefits are currently 253 dollars per day for 3 years with 5% compound inflation and 90 day elimination period.This is for each of us individually.If we keep it as is,our combined rate will increase over 3 years to 4865 by March 2021.
Seems like a great plan. Better than mine and less expensive.

Unless the extra $1390 would put you in the poor house, I'd keep it.

Katietsu
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Re: Genworth premium increase

Post by Katietsu » Wed Jan 09, 2019 7:30 pm

Does the cheaper option permanently give up the right to future inflation increases?

Broken Man 1999
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Re: Genworth premium increase

Post by Broken Man 1999 » Wed Jan 09, 2019 7:31 pm

I would wager your kids would want you and wife to be protected by your LTC policies or via your funds even if it reduced their possible inheritance. So whether via your funds or an insurance policy, do what is best for YOU. I would keep the policy, and I would not reduce the daily amount.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

Topic Author
hoops777
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Re: Genworth premium increase

Post by hoops777 » Wed Jan 09, 2019 7:33 pm

Katietsu wrote:
Wed Jan 09, 2019 7:30 pm
Does the cheaper option permanently give up the right to future inflation increases?
No,it has the same inflation protection.
K.I.S.S........so easy to say so difficult to do.

Topic Author
hoops777
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Re: Genworth premium increase

Post by hoops777 » Wed Jan 09, 2019 7:34 pm

My brother has the exact same policy and has Parkinson’s and has used it all.
K.I.S.S........so easy to say so difficult to do.

Katietsu
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Re: Genworth premium increase

Post by Katietsu » Wed Jan 09, 2019 7:51 pm

Just looking at ball park numbers, it seems like they have done a good job at matching premium increases with the likely payouts using average age of nursing home entry and average stays. So, are you average?

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mlebuf
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Re: Genworth premium increase

Post by mlebuf » Wed Jan 09, 2019 7:59 pm

We have a similar policy with Genworth. In 2017 we faced several options much like you described. Our original policy was lifetime. However if we reduced the length of the policy to 5 years, there would not be a rate increase. We opted to reduce the length to 5 years.

I look at LTC insurance in much the same way I look at carrying homeowners insurance for a mortgage-free home. If our house were destroyed it would be a financial castrophe and that's why we insure it. If you have enough wealth to self-insure against the need for LTC, you can drop the policy. If you have very little in the way of assets, Medicaid will pay for nursing home care. It won't be the best but it won't cost you anything either.
Best wishes, | Michael | | Invest your time actively and your money passively.

michaeljc70
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Re: Genworth premium increase

Post by michaeljc70 » Wed Jan 09, 2019 11:05 pm

I don't know. What I will say, and this is after seeing my grandparents experience, is you may not need this policy for 20 years. How many more increases will there be? How many times will you need to decide to pony up a big increase or take a cut in benefits? My grandparents eventually wound up with such a watered down policy over 25+ years that it was almost a complete waste. The median stay before death in a nursing home was 5 months in a study I saw.

ResearchMed
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Re: Genworth premium increase

Post by ResearchMed » Wed Jan 09, 2019 11:19 pm

michaeljc70 wrote:
Wed Jan 09, 2019 11:05 pm
I don't know. What I will say, and this is after seeing my grandparents experience, is you may not need this policy for 20 years. How many more increases will there be? How many times will you need to decide to pony up a big increase or take a cut in benefits? My grandparents eventually wound up with such a watered down policy over 25+ years that it was almost a complete waste. The median stay before death in a nursing home was 5 months in a study I saw.
It's obviously a tricky decision.

However, we wouldn't base our decision on the median stay.
The big concern isn't with a short stay, or even a year. It's a multi-year stay that would really add up.

DH has a Genworth policy through Employer. I don't know if they are helping to keep the brakes on rates, but it's been about 5 years now (+/- without checking), and there have been no premium increases.
There has been the regular bump in payments, per the percentage schedule in the policy.
We keep waiting, expecting notification of an increase, of course.

RM
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Topic Author
hoops777
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Re: Genworth premium increase

Post by hoops777 » Wed Jan 09, 2019 11:26 pm

ResearchMed wrote:
Wed Jan 09, 2019 11:19 pm
michaeljc70 wrote:
Wed Jan 09, 2019 11:05 pm
I don't know. What I will say, and this is after seeing my grandparents experience, is you may not need this policy for 20 years. How many more increases will there be? How many times will you need to decide to pony up a big increase or take a cut in benefits? My grandparents eventually wound up with such a watered down policy over 25+ years that it was almost a complete waste. The median stay before death in a nursing home was 5 months in a study I saw.
It's obviously a tricky decision.

However, we wouldn't base our decision on the median stay.
The big concern isn't with a short stay, or even a year. It's a multi-year stay that would really add up.

DH has a Genworth policy through Employer. I don't know if they are helping to keep the brakes on rates, but it's been about 5 years now (+/- without checking), and there have been no premium increases.
There has been the regular bump in payments, per the percentage schedule in the policy.
We keep waiting, expecting notification of an increase, of course.

RM
I just got my increase yesterday after 6 years so check the mail :happy
K.I.S.S........so easy to say so difficult to do.

michaeljc70
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Re: Genworth premium increase

Post by michaeljc70 » Wed Jan 09, 2019 11:30 pm

ResearchMed wrote:
Wed Jan 09, 2019 11:19 pm
michaeljc70 wrote:
Wed Jan 09, 2019 11:05 pm
I don't know. What I will say, and this is after seeing my grandparents experience, is you may not need this policy for 20 years. How many more increases will there be? How many times will you need to decide to pony up a big increase or take a cut in benefits? My grandparents eventually wound up with such a watered down policy over 25+ years that it was almost a complete waste. The median stay before death in a nursing home was 5 months in a study I saw.
It's obviously a tricky decision.

However, we wouldn't base our decision on the median stay.
The big concern isn't with a short stay, or even a year. It's a multi-year stay that would really add up.

DH has a Genworth policy through Employer. I don't know if they are helping to keep the brakes on rates, but it's been about 5 years now (+/- without checking), and there have been no premium increases.
There has been the regular bump in payments, per the percentage schedule in the policy.
We keep waiting, expecting notification of an increase, of course.

RM
Yes, it is a tricky decision. I think a lot of people get the insurance when younger thinking it makes sense because it seem inexpensive without figuring out the total cost long term including all the potential premium increases and/or benefit cuts.

Your financial situation and ability to absorb costs should definitely play a role in the decision. I have a friend whose parents both had Alzheimer's. The kids though were able to keep them in their home and hire caretakers for around $60k a year. That is one condition that would worry me as you can live a very long time with it. I believe his mother has had it for 15+ years (the father has since passed). He said her pension + SS covers the caretakers.

ResearchMed
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Re: Genworth premium increase

Post by ResearchMed » Wed Jan 09, 2019 11:32 pm

hoops777 wrote:
Wed Jan 09, 2019 11:26 pm
ResearchMed wrote:
Wed Jan 09, 2019 11:19 pm
michaeljc70 wrote:
Wed Jan 09, 2019 11:05 pm
I don't know. What I will say, and this is after seeing my grandparents experience, is you may not need this policy for 20 years. How many more increases will there be? How many times will you need to decide to pony up a big increase or take a cut in benefits? My grandparents eventually wound up with such a watered down policy over 25+ years that it was almost a complete waste. The median stay before death in a nursing home was 5 months in a study I saw.
It's obviously a tricky decision.

However, we wouldn't base our decision on the median stay.
The big concern isn't with a short stay, or even a year. It's a multi-year stay that would really add up.

DH has a Genworth policy through Employer. I don't know if they are helping to keep the brakes on rates, but it's been about 5 years now (+/- without checking), and there have been no premium increases.
There has been the regular bump in payments, per the percentage schedule in the policy.
We keep waiting, expecting notification of an increase, of course.

RM
I just got my increase yesterday after 6 years so check the mail :happy
Gee, thanks for the encouraging words :(

RM
This signature is a placebo. You are in the control group.

Wolfpacker
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Re: Genworth premium increase

Post by Wolfpacker » Sat Jan 12, 2019 11:07 am

My wife (Age 65) and I (Age 68) similar to you: Genworth LTCi policy in Virginia with 3 years each (partnership so 6 years total), 5% annual compound inflation, 90 day elimination period (0 day if begin with home care) and currently at $191 per day. Total annual premiums are now $4,299. Like you, our hope is to cover most of potential future ltc needs via this ltc insurance and leave most of our savings to kids.
You have 32.5% more daily coverage than us ($253 vs. our $191), but your $4,865 premium would be only 13.2% more than we currently pay. So, even though from $3,475 to $4,865 (a 40% increase) seems high, also remember that over the past 6 years you've had the policies, your daily benefit has risen by 34%.
Since you implied that you seem reasonably comfortable affording the increase at this time, and even the increased premiums seem to me to be attractively priced (I would switch to yours if I could :wink: ) -- so, I would suggest you pay it.

Food for Thought: What is the annual cost of assisted living facilities in your area? $253 per day is $92,345 per year. So, if that is sufficient to meet the cost of care in your area, then you might not need to maintain the 5% compound rate. In a few years, when you get your next increase, you can re-evaluate your situation and maybe consider cutting back to a 3% compound rate at that time for a better annual premium. My experience with my mother who has been in assisted living for 4 years now is that annual increases have been 2.5% to 3.0%, so going from a 5.0% to a 3.0% inflation rate on policies might be a reasonable trade-off against future rate increases.

Topic Author
hoops777
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Re: Genworth premium increase

Post by hoops777 » Sat Jan 12, 2019 1:04 pm

Thanks.At least it goes up in increments over 3 years,so I guess we will pay it and see what happens down the road.
K.I.S.S........so easy to say so difficult to do.

RetiredAL
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Re: Genworth premium increase

Post by RetiredAL » Sat Jan 12, 2019 1:39 pm

My Dad's Genworth LTC premium just came 2 days ago, and it has a 7% increase.

I will pay it. He's currently in a nursing facility, however he may be discharged today. I have not yet reconciled it for home care, but if he goes to assisted living, the coordinator said it was valuable.

He is 94 and has paid into this for 20 years. It started at $2200/yr, and is now is $4900.

hirlaw
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Re: Genworth premium increase

Post by hirlaw » Tue Jan 15, 2019 7:51 pm

A big issue with Genworth is its future solvency.

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arcticpineapplecorp.
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Re: Genworth premium increase

Post by arcticpineapplecorp. » Tue Jan 15, 2019 8:06 pm

the "partnership" part is of great value. I haven't seen any of those plans since I stumbled upon them years ago. Make sure whoever is your POA understands that the amount of your coverage increases the amount you (or your spouse) can keep ABOVE the medicaid limit. That's the partnershp part that's valuable. Most often you have to spend down assets to qualify for medicaid but the partnership plans allow you to keep additional resources equal to the amount of coverage received from the plan. Make sure your POA understands this. Otherwise, you could spend down more than you'd need to.
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willthrill81
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Re: Genworth premium increase

Post by willthrill81 » Wed Jan 16, 2019 11:44 am

hirlaw wrote:
Tue Jan 15, 2019 7:51 pm
A big issue with Genworth is its future solvency.
This is a major concern with all LTC policies. There has been a mass exodus of companies offering such policies, and there's no guarantee that the one you select will be there in the future.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

hirlaw
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Re: Genworth premium increase

Post by hirlaw » Wed Jan 16, 2019 12:18 pm

hirlaw wrote: ↑
Tue Jan 15, 2019 8:51 pm
A big issue with Genworth is its future solvency.

This is a major concern with all LTC policies. There has been a mass exodus of companies offering such policies, and there's no guarantee that the one you select will be there in the future.
This is much more of a concern with Genworth. I own Genworth LTC policies. Its insurance ratings have fallen to very low levels and it has been trying to be get regulatory approval to be acquired by China Oceanwide. If Genworth were to become insolvent/liquidated, my state's insurance guaranty fund is limited to $300,000 in total recovery (i.e., the "long" term care would then become very "short" term care).

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