Letter: Thinking about purchasing Long-Term Care Insurance?

Camas resident Anna Miller discusses the many things we’re not told when we purchase Long-Term Care Insurance

Editor’s note: Opinions expressed in this letter to the editor are those of the author alone and do not reflect the editorial position of ClarkCountyToday.com

So, you meet with an insurance agent (salesperson) from a well-known and trusted company. After several hours of discussion, you choose the plan that suits you best. The salesperson informs you that you will pay $1500 a year. Your spouse signs up also. His yearly premium is $1500. Whew, at $3000 a year, it’s expensive! However, you think it will be worth your peace of mind and protect your heirs by not burning up their inheritance on medical bills for your care. You pay a yearly premium of $1500.00, and the Insurance Company will pay up to $147,939.00 for your medical care for up to three years. You are assured that the average person only needs Long-Term Care for no longer than three years.

You faithfully pay the premium on time for years. One day you go to your mailbox to find a four-page letter from your insurance company. Bad news. Your premiums are being increased. Gulp. It’s a big hike, but you are still willing to pay for it for peace of mind. But here is the thing that is annoying. The sales agent did not mention that the insurance company could petition the Insurance Commissioner every three years for permission to raise the premiums on your plan.

Fast forward. Since that first four-page letter in the mailbox from the insurance company, you have received that four-page letter, every three years. More bad news each time. Premium increases.

The Insurance Company out of an abundance of care for you (sarcasm – and likely legally forced to do so when they get permission to raise your premiums) will make a deal with you.

Option 1; Your yearly premium goes from $1500 to $2,693.78 and the monthly benefit of $5,923 will stay as is, along with the total amount they will pay over a 3-year benefit period of $147,939.00

Option 2; Reduce your annual inflation rate from 5% to 3%. This can result in your monthly benefits not keeping up with inflation and your policy limit may run out more quickly due to the higher costs of your care. That’s what the insurance company is betting on here, in my opinion. However, your yearly policy premium increase is lower at $2,072.14 and your policy limit of $147,939 remains the same.

Option 3; Reduce your Monthly Benefit (MB) from $5,923.00 to $4,555.00; a reduction of $1,368 per month. Also, a reduction in the amount the insurance company will pay (policy limit) from $147,939.00 to $113,783.00. A reduction of $34,156. With this option the yearly premium is $2,071.84.

Option 4; Paid Up Policy. You get a $5923.00 monthly benefit. No premium payments. No benefit period. No inflation option. Here is the kicker. Your policy limit (threshold) goes from $147,939.00 to $43,465.26. So, the insurance company will pay $5,923 a month until you reach $43,465.26 in care costs. That won’t last long.

Option 5; Buy Out. No premium payments. No benefit period. No inflation option. No policy limit.

The policy is cancelled, and the insurance company pays you a check for $17,782.54. You no longer have any long-term care benefits. But hurry! This is a limited time offer. Fill out the forms and sign on the bottom line and mail them back right away!

Who do I get mad at? Do I get mad at all? The Insurance Company for doing business like a for-profit business? The Insurance Commissioner for approving big increases on the elderly every time the insurance company comes calling? The salesperson who failed to mention the four-page letters that will start coming when you reach a certain age. (The fact that they start as you become elderly, is just a coincidence, I’m sure. Right?)

Like the cowboy said, “there’s a whole hell-of-a-lot of things they didn’t tell me when I hired on with this outfit.”

Anna Miller
Camas