He said he recently advised a 75-year-old California customer with an unlimited lifetime insurance policy – meaning his benefit pool is never exhausted – to ignore the settlement offer because his policy allowed for better cost management. Mr. Robinson recommended that the client switch to a six-year benefit period and reduce his daily benefit amount from $546 to $300. His premium will be $2,340 per year instead of the $16,400 he pays now, and he still has a benefit limit of about $660,000. He can also invest his annual savings of $14,000 to cover future care. Even if Genworth gets approval for significant rate increases, Robinson said, the customer can afford them because of its lower rate.
“People have no idea they might have options,” Mr. Robinson said.
Here you will find some questions and answers about long-term care:
Where can I get help understanding a care settlement offer?
The comparison offer includes a customer service number, but if you have a financial adviser or insurance agent you trust, seek advice from them first, Mr Robinson said. You can also try contacting your state's federally funded State Health Insurance Assistance Program office, known as SHIP, Ms. Burns said. SHIP advisors cannot provide recommendations but can help consumers understand their options, she said.
The New York Times recently published a helpful guide to long-term care insurance.
How likely is it 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 fight,” she said. Some states limit annual rate increases, so larger increases must be staggered.
Some regulators, like those in New York, recognize that their previous increases may have been too stingy given the scale of the problem. Genworth has also said it could 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 listed in the letter, Mr. Robinson said. Time limits vary, but he said he has found that some may offer a grace period of at least 45 days upon request.