Broker Check

Premiums Rise for Long Term Care Insurance – Keep or Drop?

| March 26, 2014

“Major insurers have been successfully seeking state approval(s) to raise premiums on existing policies . . .”

 “Big losses on improperly priced polices . . . have prompted some insurers to exit the long term care business altogether.”

Let’s review.  If you’re a single / divorced / widowed guy, you may rightfully feel you don’t need Long Term Care insurance.  And you might be right.  If you need care, you’ll receive the care.  The question is, who pays?  (The answer, for those who can pay and have “spent down” virtually 99+% of their assets (usually) . . . is Medicaid.)


By the way, I said guy because, in my experience, women simply do not think this way – but I digress.


Conversely, if you are a “committed couple” and have based your retirement plans on using your joint resources to retire, then LTCi is critical . . . unless you have an extra (depending on your part of the country) $83,950 per year of income “laying around”  . . . and increasing at more than 4% annually! Ouch.)


What are your options?

(In addition to completely dropping your coverage?)

Cancel the policy and shop for a new one?

Probably a bad idea.  You’re older now, and rates have been going up for equivalent benefits.  So it’s very unlikely you can shop for a new policy and achieve a lower premium for the same benefits.

Choose a reduced benefit level for the same premium?

It makes a lot of sense to have a financial professional look at your numbers.  This idea might work!


Specifically, opt for a lower level of inflation protection?

See answer above – a definite maybe.


When in doubt, get the facts!

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