I live in the San Francisco Bay area and have a LTCI policy with CNA, effective 1/1/2011 (purchased under the Roche group policy). My current monthly premium is $2014.16. My premiums are slated to go up 70% in Aug 2016 ($347.08), and an additional 15% in Aug 2017 ($399.14) (total 95%). My policy benefits include: Daily benefit – $290, Lifetime Max $529,250. Includes inflation and worldwide coverage. Based on the amount of increase and CNA’s track history of denying claims, I am trying to decide whether to keep CNA or move to another LTC provider.

Please do not cancel your CNA policy. It looks like you have paid about $14,500 in premium so far. Using the 2017 premium of $399 a month, if you pay another 20 years without having a claim, you will pay about $96,000 plus the $14,500, so $110,500.  If you have 5% compound inflation, your benefit pool in 20 years will be $1.4 million vs. paying $110,500. Even with another rate increase, it’s a heck of a deal. Your daily benefit in 20 years will be $769 a day.  If you divide that daily benefit into the $110,500 premium, you will see that you would get all your premium back in 144 days, less than five months. You don’t say how old you are, so I’m just using another 20 years as an example, but I think you can understand the concept. Here’s the simple calculator I use to determine future benefits:

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

Also, policies today cost a lot more than in 2011. If this policy is truly unaffordable for you, you can call CNA and ask what it would cost to reduce your benefit account. You have a 5 year bucket [$290 x 1,825 days = $529,250] so ask what the premium would be for a 3 or 4 year bucket.  By keeping the daily benefit high, you are increasing the chance that you won’t use it all every day, in which case the extra would stay in your account and make the benefits pay longer.

Finally, you will be glad to know that CNA has a new claims management team and they are working extremely hard to restore the great customer service to CNA policyholders.

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