- Reduce monthly benefit from $6,900 to $5,100 (26%, same proportion as premium increase) and keep $1,360/yr premium
- "Shared cost option", which involves reducing monthly benefit by just 12% to $6,100, and also requiring the insured to pay 12% of any covered services; the $6,100/mo cap applies to the insurer's portion
- "Reduce future annual inflation rate", from 1.8% to 0.7% (whatever that means)
- "Paid-up policy option", which involves capping the total policy benefit at $37,000 (150% of his total premiums paid to this point) and paying no further premiums. Monthly benefit limit still applies, and no future inflation adjustments, but policy otherwise remains the same.
Edit: The insurance company states that the policy limit is $6.9M, so effectively an unlimited benefit.
I understand very little about LTC insurance. The future annual inflation rate reduction in particular is confusing. I would expect that this would apply only in the case that LTC care is started. Then, the monthly benefit gets increased with inflation so you can receive the same quality of care. If that's correct, it seems like the best choice by far - how many years are people in LTC facilities? Usually not enough where inflation would become a dominant factor. But, I worry this also somehow also applies to the "pre-benefit" portion of the policy, and would have adverse consequences I'm not seeing. The shared cost option could be reasonable. The paid-up option is basically canceling the policy, and if he needs it that $37k will be blown through very quickly. Although, given his spending habits and high chance of getting butchered in the next market crash, maybe this is the best choice - save the premiums, expecting that he'll be close to broke by the time he would need this coverage, and then let Medicaid pick up the bill. I know, there is a moral hazard problem, but he's already in this situation. Anyone have a suggestion on how to proceed?