Ask Terry Questions Long Term Care Insurance

Long Term Care Insurance

By Terry Savage on March 05, 2015 | Insurance & Annuities

My husband and I received letters from Prudential regarding the Long Term Care Insurance policies we have with them. They are offering an increase from $128.00 to $148.00 for the “Daily Maximum for Nursing Home Care”. Our current monthly premium amount would increase from $87.18 each to $123.16 each. The letter states that “rejecting this increase may put at risk our ability to increase your benefits on a guaranteed issued basis”. My husband and I are both 72 years old and in good health (with the help of various medications my husband takes). I’m leaning towards declining this offer of an increase with the understanding that should either one of us need the coverage we would have to subsidize the costs with savings. We have 30 days to respond. Do you agree?

Terry Says:   I really wanted to make sure I gave you the right information, so I turned to my Long Term Care expert Brian Gordon of Maga LTC (  Here’s what he wrote:

It sounds like they have a feature in their policy called the Future Purchase Option (FPO) or the Guaranteed Purchase Option (GPO).  With this feature it allows a person to purchase a policy at a lower premium up front and then the carrier (Prudential for this policyholder) will allow the client to increase their benefits 5-15 percent every 3 years without evidence of insurability.  The additional benefits that they purchase will be priced at their attained age.  I look at them gaining an extra $7,300 per year in coverage for an additional cost of $431.76 per year per person.  I usually recommend a person to increase their benefits at their younger ages since the cost for the insurance is lower.  If a person chooses not  to increase their benefit in the first 1-3 offers the carriers in most cases will not make any other offers to increase.  Most carriers will not offer the increase if a person is over age 91 or if they have been on claim in the previous 2 years from the offering.   If the policyholder is comfortable covering more of the cost out of pocket in the future then they should opt to decline the offer. 




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