NY Life Guaranteed Premium

[fueldude]

Hi,

Just a data point I thought I would share with everyone. I'm a long-term lurker and infrequent poster, but have gained a wealth of knowledge from this board.

I received a notice from NY Life that my LTC policy is having an increase in premium. It will be the second increase since I've bought the policy, but it will be the last. As part of the increase, they are making adding language that the premium will never increase again on my policy, assuming I make no changes to the policy (decrease elimination period, add riders, etc....) They are also making is guaranteed renewable and non-cancelable.

I've mentioned in other posts that LTC insurance was something my spouse insisted we purchase. She had a bad experience caring for family members and never wants to place others in a similar position. I've had mine 11 years and purchased it when I was 25.

Current policy is as follows:

Issue state: Missouri
$252/day benefit (Original was $150.)
5% compounded inflation benefit
Unlimited benefit period
180 day elimination
$1348 annual premium. (Original was around $900)

Keep everything the same, the premium will increase to $2425 per year.
Reduce daily benefit to $145/day and the premium will stay $1348.
$252 daily benefit, but reduce benefit term to 3 years: $1298

I've emailed our agent to see if the reduction in daily benefit cancels the 5% inflation rider. If it does not, I'm probably going to take the offer to reduce the benefit to $145. If I make it to 70 (34 years), that will get me $760 daily benefit. If it does remove the 5% inflation rider, then I'll have to reevaluate. My company currently pays my policy, but I am struggling to find the value in keeping the same benefits at twice the cost, especially if I keep the 5% inflation rider.

I have not read any industry publications and my friends in the business have not heard if NY Life or other companies are going to start offering fixed premiums on new policies. If they do, I'm sure the premium will be high enough to price the people who need it most out of the market.

 

[kpbdy99]

Fixed-premium (non-can) LTC policies are pretty unlikely, but NGL is going to do this wiht their 10-pay offering. Of course, the price is going to have to go up significantly to do that.

 

[ltcadviser]

Fixed-premium (non-can) LTC policies are pretty unlikely, but NGL is going to do this wiht their 10-pay offering. Of course, the price is going to have to go up significantly to do that.

Fairly rare to request rate increases within early years of a filing of a new block of business. My Genworth 10 Pay which was issued in 2012 at crazy low pricing had no rate increases. I just received a rate increase for the 10th payment of 12%. It is smart for NGL to make the 10 Pay guaranteed, but with the new pricing the hybrids from Nationwide and Securian will now eat NGL’s lunch. Traditional is now officially dead.

 

[ltcadviser]

Hi,

Just a data point I thought I would share with everyone. I'm a long-term lurker and infrequent poster, but have gained a wealth of knowledge from this board.

I received a notice from NY Life that my LTC policy is having an increase in premium. It will be the second increase since I've bought the policy, but it will be the last. As part of the increase, they are making adding language that the premium will never increase again on my policy, assuming I make no changes to the policy (decrease elimination period, add riders, etc....) They are also making is guaranteed renewable and non-cancelable.

I've mentioned in other posts that LTC insurance was something my spouse insisted we purchase. She had a bad experience caring for family members and never wants to place others in a similar position. I've had mine 11 years and purchased it when I was 25.

Current policy is as follows:

Issue state: Missouri
$252/day benefit (Original was $150.)
5% compounded inflation benefit
Unlimited benefit period
180 day elimination
$1348 annual premium. (Original was around $900)

Keep everything the same, the premium will increase to $2425 per year.
Reduce daily benefit to $145/day and the premium will stay $1348.
$252 daily benefit, but reduce benefit term to 3 years: $1298

I've emailed our agent to see if the reduction in daily benefit cancels the 5% inflation rider. If it does not, I'm probably going to take the offer to reduce the benefit to $145. If I make it to 70 (34 years), that will get me $760 daily benefit. If it does remove the 5% inflation rider, then I'll have to reevaluate. My company currently pays my policy, but I am struggling to find the value in keeping the same benefits at twice the cost, especially if I keep the 5% inflation rider.

I have not read any industry publications and my friends in the business have not heard if NY Life or other companies are going to start offering fixed premiums on new policies. If they do, I'm sure the premium will be high enough to price the people who need it most out of the market.

My quick thoughts: don’t change anything whatsoever on your policy. Don’t even think about reducing your daily benefit from $252 to $145. HUGE mistake. Write the $2425 check for now. Alternatively ask your agent what the 7 year benefit period premium will be with $252 day, 5% compound, 180 day ep.

 

[kpbdy99]

Fairly rare to request rate increases within early years of a filing of a new block of business. My Genworth 10 Pay which was issued in 2012 at crazy low pricing had no rate increases. I just received a rate increase for the 10th payment of 12%. It is smart for NGL to make the 10 Pay guaranteed, but with the new pricing the hybrids from Nationwide and Securian will now eat NGL’s lunch. Traditional is now officially dead.

As long as you have the Partnership program and clients with limited budgets, there's going to be a need for traditional LTCi.

 

[ltcadviser]

As long as you have the Partnership program and clients with limited budgets, there's going to be a need for traditional LTCi.

For women the cost of traditional policies is getting out of hand. The value proposition is eroding quickly.

 

[fueldude]

My quick thoughts: don’t change anything whatsoever on your policy. Don’t even think about reducing your daily benefit from $252 to $145. HUGE mistake. Write the $2425 check for now. Alternatively ask your agent what the 7 year benefit period premium will be with $252 day, 5% compound, 180 day ep.

Appreciate the insight. I'll be sure and ask when I call them next week. I do know that for each dollar of daily benefit, I'm paying around $9.46 in annual premium. The options they gave me were just two they chose. I can pick any daily amount I'd like.

If I end up making any changes, it'll be no lower than $175/day. My wife has a separate policy that is going to have the same increase next year when it renews. She's uninsurable now and will, without a doubt, be using her policy sooner than later. We're going to pay the full rate increase on hers....

 

[Tahoe Ray]

Appreciate the insight. I'll be sure and ask when I call them next week. I do know that for each dollar of daily benefit, I'm paying around $9.46 in annual premium. The options they gave me were just two they chose. I can pick any daily amount I'd like.

I would look at it like you're paying $1 of premium for $38 of benefit per year.

Also, if the premiums don't go up again, you'll be paying $1 of premium for $158 in benefits by the time you're in your mid-70s.

The guy who responded to you before writes more long-term care than everyone on this forum combined. I would take his advice and not touch your policy, accept the rate increase, and know that you have an LTC policy that anyone would be enviable of.

 

[scagnt83]

Take LTCAdvisors advice. He is one of the foremost experts on the subject of LTCI in the entire country.

 

[ltcadviser]

Appreciate the insight. I'll be sure and ask when I call them next week. I do know that for each dollar of daily benefit, I'm paying around $9.46 in annual premium. The options they gave me were just two they chose. I can pick any daily amount I'd like.

One thing
If I end up making any changes, it'll be no lower than $175/day. My wife has a separate policy that is going to have the same increase next year when it renews. She's uninsurable now and will, without a doubt, be using her policy sooner than later. We're going to pay the full rate increase on hers....

When you are older you will be grateful you kept the 5% compounded inflation to keep up with healthcare costs. 5% compound works. Also, the premium of $2425 may seem high today, but as you grow older this amount of money due to inflation will not seem very high to you in 25-35 years.