Long term care insurance - premiums changing?

Question

Hi, I was told it's normal for long term care insurance premiums to be raised every five years, even if I buy the more expensive coverage. Is this true, or are there policies that are locked in at a specific rate? Thanks for your assistance.

Answer 1

The short answer is no. Long term care insurance is not term insurance, it is a life purchase as long as you pay the premium. You should look at your contract which will spell out the premium terms. I have heard of some companies writing adjustable premium clauses into their policies but this is not common in the industry.

Answer 2

That is absolutely not true. Too many new Long Term Care providers have jumped in in the last 20 years, and now that they are starting to pay claims and don't have enough policyholders to make up for it, they are raising their rates. I work for a company that has been in business for 127 years and has offered Long Term Care for over 60 years. We have had one rate increase! Other companies have stopped offering it, and raised their rates so high in the hope that their policy holders will cancel and they don't have to pay out their enormous claims.

No reputable insurance carrier can promise you that they will never raise the rates. It does not matter if you go with the cadillac plan or not. It is the company and their claim paying history.

Helpful hints for a good policy that will pay when you need it and not cost a ton of money. Do not over insure yourself.

Average length of a good policy is 3 - 5 years. (Not a lifetime like most brokers recomment) they are looking for commission not statistics on care.
Never get over a 30 day Elimination Period. Medicare/Private Insurance only pays about 20 days of skilled care for the average person. Many illnesses do not ever have skilled level of care (getting better every day), so with a 90 or 180 day elimination period you will be paying out $18 - $36K before the policy ever triggers on top of the expensive premiums.

Email me your age, and health, and I'll be happy to give you rates that are modest with a company that believes in customer service and is one of the leading in the nation for paying claims.

Answer 3

It's not normal for the pure premiums to be changed for the same coverage.

It is normal however, for the policyholder to decide to buy inflation protection so that each year your daily payout gets higher and higher as the average costs increase accordingly.

For example, if you buy a policy without inflation protection that pays $50 per day and 10 years later...it still pays only $50 per day. But the average daily charge of a nursing home in that same period goes from let's say $100 to $279.....then you are going to have a bigger and bigger gap.

So, every so often, it's important to rethink your daily payout rate and consider upping it.