04 Sep Our long-term care policy is changing. What to do?

Q. We have a long-term care policy with Genworth and have paid premiums for maybe 15 years. My husband is 82 and I am 76. We received a notice that they are requesting to raise the premiums and we were given about four options for what we want to do. We want to keep this policy but the options are super confusing and without knowing how much the premium will increase, we have no idea if we can afford it. Can you please dumb down the choices?
— Needing help

A. It can be difficult to navigate the options available to you when you receive a notice that your long-term care provider is requesting to raise the premiums on your policy.

Let’s try to get you asking the right questions.

First, maintaining this policy could be very important for your overall financial picture given the significant percentage of people above the age of 65 that will need some level of long-term care services at some point in their lives, said Charles Pawlik, a certified financial planner and chartered financial analyst with Beacon Trust in Morristown.

He said it’s not uncommon for a long-term care need to last two to three years or longer, and given the high cost of care, the policy can be a huge help.

Pawlik said you should contact your insurance provider to review the current provisions of your policy.

You want to check items including, for example, the amount and duration of benefits you are currently entitled to under your policy, your elimination period (how long you have to wait before coverage starts) and any inflation protection the policy may have.

You’ll also want to discuss in detail the various options that are being presented to you alongside the amount of the requested increase in premium, and how these options may impact the key provisions of your policy, he said.

“Generally speaking, some of the key provisions of the policy can typically be modified in order to maintain the policy and mitigate the increase in premiums,” he said. “For example, lengthening the elimination period and having simple versus compound inflation protection can potentially serve to reduce premiums.”

With that said, you’ll want to ensure you are getting a clear explanation of what the impacts on the policy may be relative to the options being presented and what happens if you modify some of the key provisions, Pawlik said.

You want to make sure you’re not sacrificing the overall quality of your coverage too much in an effort to offset the increase in premiums, he said.

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This story was originally published in September 2024.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.