He said he recently advised a 75-year-old California client with an unlimited lifetime benefit policy (meaning his set of benefits never runs out) to ignore the settlement offer because his policy allowed for a better way to manage benefits. costs. Mr. Robinson recommended that the client change to a six-year benefit period and reduce his daily benefit amount from $546 to $300. His premium will be $2,340 a year instead of the $16,400 he pays now, and he will still have a benefit limit of about $660,000. He can also invest his annual savings of $14,000 to help cover future care. Even if Genworth wins approval for significant rate increases, Robinson said, the customer could afford to pay them, based on his lower rate.
“People have no idea that they have options,” Robinson said.
Here are some questions and answers about long-term care policies:
Where can I get help understanding a long-term care agreement offer?
The settlement offer includes a customer service number, but if you have a financial advisor or insurance agent you trust, seek their advice first, Robinson said. You can also try contacting the federally funded State Health Insurance Assistance Program office, known as SHIPsaid Ms. Burns. SHIP counselors cannot offer recommendations, but they can help consumers understand their options, she said.
The New York Times recently published a useful guide to long-term care insurance.
What are the chances that state regulators will approve large premium increases?
Regulators must balance the need for a company to raise rates to pay claims and remain solvent with the need for policyholders to be able to afford their coverage, Ms. Burns said. “It's a terrible struggle,” she said. Some states limit annual rate increases so that larger increases must be staggered over time.
Some regulators, such as those of NY, are realizing that their previous increases may have been too stingy, given the magnitude of the problem. Additionally, Genworth has said he can sue states that refuse to approve “justified” increases.
My settlement letter has a deadline. What if I need more time?
Check with the customer service contact included in the letter, Robinson said. Deadlines vary, but she said she has discovered that some can offer a grace period of at least 45 days upon request.
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