Should I accept this Met Life Long-Term Care Inflation Offer?

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Topic Author
biscuits
Posts: 149
Joined: Tue Nov 13, 2018 7:24 pm

Should I accept this Met Life Long-Term Care Inflation Offer?

Post by biscuits »

This is a really in-the-weeds long-term care insurance question. I wonder if anyone else is wrestling with a similar decision.

I am 67 and have a long-term care policy with Met Life which I bought in 2002. My current daily benefit is $443 for in-home or in-facility care. My monthly premium is $399 (yes the premiums have tripled since I bought the policy). This policy has a 90-day exclusion period, an unlimited lifetime benefit, and an inflation option with an annual offer to increase the daily benefit in accordance with the CPI along with an increased premium.

I have almost always accepted the optional inflation increase (my daily benefit has risen from $300 to $443). This year, the option is to increase the daily benefit to $484 (about 10% increase) with the premium increasing to $497.23 (about 25% increase). I called Met Life today and spoke with a rep: I said that in past years the percentage increase in the premium has seemed more in line with the percentage increase in the daily benefit. Yes, she said, that's true. She said that as I age, the premium increases will become larger as this is basically increasing a benefit for an older person without underwriting. She pointed out that my policy requires that I accept at least one inflation offer every three years, to maintain the option. Since I accepted the offer last year, I could skip the next two if I wish.

I can't figure out what's the right decision here. I could afford the increased premium. I think that I could also afford to self-insure for that additional $40/day benefit. Emotionally, I'm inclined to take the inflation increase even though it seems expensive. As I've reported on another thread, I did claim on my late husband's long-term care insurance (with John Hancock) in 2021, and having that insurance provided great peace of mind. I have health problems that could very likely land me in long-term care, but these are problems I could possibly live a long time with. I'd like to have the option to be in the nicest care situation possible and still leave money to my kids (even though they don't need it and tell me not to worry about them). Is it possible to know what makes sense here, or is this unknowable, because the future is unknowable?

Grateful for any thoughts.
Leesbro63
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by Leesbro63 »

My mother has a MetLife policy purchased about the same time as you. She, however, is 86. The increases are unsettling but the cost of long term care is more unsettling. At her age, we are committed to paying whatever it is to keep the policy in force. At your age, it's a tough decision. It may be that you are paying into a policy that you eventually won't be able to keep up with. But my inclination would be to pay the juice for now.
VanGar+Goyle
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by VanGar+Goyle »

This first sounded like one of the good old LTC policies: inflation adjustments, unlimited lifetime benefit,
but then takes a dark turn with increasing the premium at least every 3 years.
I suggest checking out what a new comparable LTC policy would cost you - probably much more.
Take your kids at their words, expect prices to jump up several more times, and make sure that your current policy will cover what you need.
Note that I did not tell you if you should accept the inflation offer, or what you need to be covered in a better place.
Well, you pay a little bit, we're a little bit tough. | You pay very much, very much tough. | You pay a too much, we're too much a tough. | How much you pay? ... Well, then we're plenty tough. - Marx
Jack FFR1846
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by Jack FFR1846 »

Are the premiums set if you don't do any inflation increases? Or do they go up periodically anyways? If they increase anyways, I would tend to expect that they will go through the roof until they exceed the monthly payment when used.

If your kids tell you not to try to leave them anything, they're like me and my sister. I've been trying to get my own 86 year old mom into an independent facility for over a year. She can well afford it. If I'm left money based on what she has now, I'm fully planning to do something exceptionally stupid like buying myself a new Ferrari (I now drive a Subaru).
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Topic Author
biscuits
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by biscuits »

Leesbro63 wrote: Fri Jan 27, 2023 5:51 am It may be that you are paying into a policy that you eventually won't be able to keep up with. But my inclination would be to pay the juice for now.
Thanks for your perspective. Yes, I definitely plan on keeping the policy. Not sure about continuing to accept every optional inflation increase, though, now that they come with such big premium hikes.
Topic Author
biscuits
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by biscuits »

VanGar+Goyle wrote: Fri Jan 27, 2023 4:52 pm This first sounded like one of the good old LTC policies: inflation adjustments, unlimited lifetime benefit,
but then takes a dark turn with increasing the premium at least every 3 years.
I suggest checking out what a new comparable LTC policy would cost you - probably much more.
Take your kids at their words, expect prices to jump up several more times, and make sure that your current policy will cover what you need.
Note that I did not tell you if you should accept the inflation offer, or what you need to be covered in a better place.
Thanks--good, advice.

I remember when I first signed up for the policy, I had an option of paying about $5,000 per year for the same benefits and an annual inflation increase that did not come with a premium increase, or about $1,200 per year for annual optional inflation increase that came with a premium increase. I could not afford the $5K premium in 2002, and so did not consider it and began with a $1,200 annual premium. But it is only this year, 22 years later, that my premium will surpass that $5K, IF I take the inflation offer.
Topic Author
biscuits
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by biscuits »

Jack FFR1846 wrote: Fri Jan 27, 2023 5:12 pm Are the premiums set if you don't do any inflation increases? Or do they go up periodically anyways? If they increase anyways, I would tend to expect that they will go through the roof until they exceed the monthly payment when used.

If your kids tell you not to try to leave them anything, they're like me and my sister. I've been trying to get my own 86 year old mom into an independent facility for over a year. She can well afford it. If I'm left money based on what she has now, I'm fully planning to do something exceptionally stupid like buying myself a new Ferrari (I now drive a Subaru).
The premiums do go up periodically, whether or not I take the inflation increase. Met Life has to petition the state and get approval to raise them, and my state never grants all the increases they want. I asked the customer service rep if an increase was in the works, and she said that they usually know about a year in advance, and she didn't see anything coming. But if I take the optional inflation increase, with the $1200 per year premium increase, that will of course be the new basis for premium increases that are not linked to the optional inflation offer.

I can just take the inflation offers until I feel I can't afford them anymore, but keep paying the premiums.

Thanks for the advice! Good luck with your mom and enjoy the Ferrari if it comes to that...
SuzBanyan
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by SuzBanyan »

Do you have other assets that can be used for LTC that were not as readily available when you husband needed LTC such as a paid off house? As the survivor, your financial calculation is different than it was for your husband. It sounds like you have a good relationship with your kids, so you may want to discuss this with them. In all likelihood it will be your kids who will benefit — or not — from the peace of mind knowing you have adequate LTCi coverage.
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biscuits
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by biscuits »

SuzBanyan wrote: Fri Jan 27, 2023 9:48 pm Do you have other assets that can be used for LTC that were not as readily available when you husband needed LTC such as a paid off house? As the survivor, your financial calculation is different than it was for your husband. It sounds like you have a good relationship with your kids, so you may want to discuss this with them. In all likelihood it will be your kids who will benefit — or not — from the peace of mind knowing you have adequate LTCi coverage.
Yes, I do have other assets, including a paid-off house which would be sold if I went into assisted living. But there's always the hope of staying at home with in-home care, which my husband did. However, he had me to manage the in-home care...

Thank you for this perspective.
Topic Author
biscuits
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by biscuits »

SuzBanyan wrote: Fri Jan 27, 2023 9:48 pm It sounds like you have a good relationship with your kids, so you may want to discuss this with them. In all likelihood it will be your kids who will benefit — or not — from the peace of mind knowing you have adequate LTCi coverage.
That was great advice. You prompted me to discuss this with my kids and it was a valuable discussion in several ways. It got us talking about the details of this policy which they could have to manage for me someday. It got us talking about long-term care options. It got us talking about the whole idea of "legacy preservation." They advocated taking the inflation option for peace of mind, and while I could have gone the other way--and may in some future year--I feel OK with that decision after discussing it with them.

Thanks for the suggestion. Now I feel like--duh, why didn't I talk to the kids about this from the beginning? The outside perspective from the Forum gave me the nudge I needed. Thanks to all who posted.
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Rager1
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by Rager1 »

We have a John Hancock LTC policy started in July, 2004. We bought the best policy offered at that time with a 5% inflation rider, unlimited lifetime benefit, 100% Home Care benefit and a 90 day waiting period. It also includes a rider for Stay at Home Modifications.

Over the years, JH has offered a reduced premium if we reduced the inflation rider. With our experiences of taking care of our parents (no LTC), we've always declined their offers and have paid the increased premiums in the 3 years they raised them. In real (inflation adjusted terms), our premiums have increased over the past 16 years at a compound rate of 1.68%. Our daily rate and Home Modifications have increased (again in inflation adjusted terms) at a compound rate of 2.48%.

We intend to continue paying the premium increases to keep this policy in effect.

Ed
SuzBanyan
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by SuzBanyan »

biscuits wrote: Sat Jan 28, 2023 6:34 pm
SuzBanyan wrote: Fri Jan 27, 2023 9:48 pm It sounds like you have a good relationship with your kids, so you may want to discuss this with them. In all likelihood it will be your kids who will benefit — or not — from the peace of mind knowing you have adequate LTCi coverage.
That was great advice. You prompted me to discuss this with my kids and it was a valuable discussion in several ways. It got us talking about the details of this policy which they could have to manage for me someday. It got us talking about long-term care options. It got us talking about the whole idea of "legacy preservation." They advocated taking the inflation option for peace of mind, and while I could have gone the other way--and may in some future year--I feel OK with that decision after discussing it with them.

Thanks for the suggestion. Now I feel like--duh, why didn't I talk to the kids about this from the beginning? The outside perspective from the Forum gave me the nudge I needed. Thanks to all who posted.
Glad you had a productive discussion with your kids. As a recent widow, you lost your partner. It will probably take some time before your mindset changes from “couple” to “single.”
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Blues
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by Blues »

I just got "the letter" yesterday for the John Hancock policies my wife and I each have had for a good many years with a 5% inflation rider.

I think we're just going to suck it up, pay the additional freight and hope that we'll never need to use either policy. (And consider it money well spent in that eventuality.)
Topic Author
biscuits
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by biscuits »

Rager1 wrote: Sat Jan 28, 2023 8:02 pm We have a John Hancock LTC policy started in July, 2004. We bought the best policy offered at that time with a 5% inflation rider, unlimited lifetime benefit, 100% Home Care benefit and a 90 day waiting period. It also includes a rider for Stay at Home Modifications.

Over the years, JH has offered a reduced premium if we reduced the inflation rider. With our experiences of taking care of our parents (no LTC), we've always declined their offers and have paid the increased premiums in the 3 years they raised them. In real (inflation adjusted terms), our premiums have increased over the past 16 years at a compound rate of 1.68%. Our daily rate and Home Modifications have increased (again in inflation adjusted terms) at a compound rate of 2.48%.

We intend to continue paying the premium increases to keep this policy in effect.

Ed
Thanks for your perspective. My late husband had a similar John Hancock policy, and I was pleasantly surprised by how well the claims and reimbursement process went. We used all of the home modification benefit, and had full-time care for him at home for 9 months. Tuck this in the back of your mind: before I initiated the claim, he had a hospitalisation and was released with home care paid for by Medicare for 90 days. A rep at John Hancock told me to request the UB04 bill from the home care agency (that is the bill they submit to Medicare for reimbursement) and that care would meet the 90-day exclusion--even though Medicare paid for it, not us. That worked. So when I started the LTC claim and home care with a different agency, John Hancock reimbursed me for those bills from the start. Saved me about $20,000.
Topic Author
biscuits
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by biscuits »

Blues wrote: Sat Jan 28, 2023 9:41 pm I just got "the letter" yesterday for the John Hancock policies my wife and I each have had for a good many years with a 5% inflation rider.

I think we're just going to suck it up, pay the additional freight and hope that we'll never need to use either policy. (And consider it money well spent in that eventuality.)
Thanks for your perspective. As I wrote to Rager1, above, my late husband had a John Hancock policy, and I was pleasantly surprised by how well the claims and reimbursement process went. Tuck this in the back of your mind: before I initiated the claim, he had a hospitalisation and was released with home care paid for by Medicare for 90 days. A rep at John Hancock told me to request the UB04 bill from the home care agency (that is the bill they submit to Medicare for reimbursement) and that care would meet the 90-day exclusion--even though Medicare paid for it, not us. That worked. So when I started the LTC claim and home care with a different agency, John Hancock reimbursed me for those bills from the start. Saved me about $20,000.
Topic Author
biscuits
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Re: Should I accept this Met Life Long-Term Care Inflation Offer?

Post by biscuits »

[/quote]
As a recent widow, you lost your partner. It will probably take some time before your mindset changes from “couple” to “single.”
[/quote]

This is so true. Among other things, it is very strange and difficult to go from having a partner to always talk over decisions with, to being the sole decider.

Thank you.
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