Should my mother take this benefit reduction with her CNA LTC

[policywunk]

Mom is 89 has CNA ,3 year ( 80% HH),90 day elim , simple 5% inflation protection and full ROP after 20 years( no claims paid yet). Daily benefit started at 100.00 in 10/1/94 and is now up about 220 daily benefit.Mom is 89 her dob is 10/10/1931

Premiums started at 123.00 monthly and stayed the same until a few years ago and is now 280.00.Of all the benefit reduction options dropping simple inflation has the biggest impact lowering premiums to 180.00.Mom is in remission from stage 4 cancer but otherwise in good health however she is now legally blind from macular degeneration.She is very independent for her situation and would not be able to trigger a claim yet according to CNA.My five siblings all live near by and already help her and mom insist she wont ever leave her house ever so the most likely claim in the future would be for HH.The ROP amount is currently about 45k

Given this scenario is it wise to drop the simple inflation protection?

 

[fed up]

Your daily won't be enough to cover a live-in and is close in many areas to not cover a full day side. 5 siblings should decide to divide the premium and pay it unless 5 siblings want to upend their lives to care for mom when she slides a little more. If you get the premium back, what's to lose?

 

[policywunk]

Your daily won't be enough to cover a live-in and is close in many areas to not cover a full day side. 5 siblings should decide to divide the premium and pay it unless 5 siblings want to upend their lives to care for mom when she slides a little more. If you get the premium back, what's to lose?

Good point.My only hesitation is that we will be very lucky if mom lives another five years so the additional 1200 a year in premium for the simple inflation protection is only adding 1,825 in additional daily benefit a year and if she does go on claim the 45k in ROP account would be depleted in about a year.If it was compound inflation protection or she was younger I wouldn't question it.thanks for your input.

 

[fed up]

Good point.My only hesitation is that we will be very lucky if mom lives another five years so the additional 1200 a year in premium for the simple inflation protection is only adding 1,825 in additional daily benefit a year and if she does go on claim the 45k in ROP account would be depleted in about a year.If it was compound inflation protection or she was younger I wouldn't question it.thanks for your input.

Check your Math. 220 per day X .05 adds $10 per day to the benefit or $3650 per year. If you keep the same benefits, what does the premium jump to? If I could have paid $50 per month as my share of a LTC premium instead of 3 years of sleepless nights in my home caring for my seniors, I would have covered it in a heartbeat. You may find how much your siblings really don't want to get involved if Mom needs to move in with someone

 

[scagnt83]

Is there an option to do 3% simple instead of 5% simple? What effect on premiums does that have?

I would find a middle ground if lowering premium is a must. 3% simple would be a good option if available.

At her age, dropping the inflation rider is not the end of the world. Average inflation rate for LTC is 4%-6% generally speaking. But since it's ROP, and you are expecting that to happen within 5 years... why not take the extra protection since you know your getting the premiums back? If you dont get the premiums back, the out of pocket cost would be significantly higher than the premiums.

 

[policywunk]

Check your Math. 220 per day X .05 adds $10 per day to the benefit or $3650 per year. If you keep the same benefits, what does the premium jump to? If I could have paid $50 per month as my share of a LTC premium instead of 3 years of sleepless nights in my home caring for my seniors, I would have covered it in a heartbeat. You may find how much your siblings really don't want to get involved if Mom needs to move in with someone

Premium is currently 280.00 and would drop to 180.00 if we drop the 5 % simple inflation.This is not compounded inflation protection so it only adds 5% of original 100 .00 daily benefit each year

 

[ltcadviser]

Check your Math. 220 per day X .05 adds $10 per day to the benefit or $3650 per year.

OP math correct, simple not compound.