Thursday, March 22, 2012

Don’t let a rate increase destroy your long term care planning

Did you receive notice of a double-digit increase for the premium on your long-term care insurance (LTCI) policy?

A lot of people have. And they’re pissed!

Policyholders are seeing increases of 10%, 30%, and as high as 90%!

Now they’re asking why.  

The big problem is that long-term care costs are an unknown for insurance companies. It’s a black hole. In fact the problem is so big that President Obama had to pull the CLASS Act provision, which was meant to provide Americans an affordable policy, out of his healthcare plan.

As I wrote on page 32 of A Boomer’s Guide to Long-term Care:

“There has never been any sound actuarial or statistical data indicating that LTCI policies are in any way immune from rate increases.”

The bottom line: Expect premiums to go up.

So what can you do if your premiums take a huge leap?

First of all, take a deep breath … relax … don’t drop the policy. People are living longer, Medicare and Medicaid are under pressure to cut spending, and the healthcare system is in turmoil. With that in mind, long-term care costs will continue to rise and more of the burden will be put on those who need the care. Therefore it’s more important than ever to protect your assets.

Second, contact your insurance agent or the company directly. Ask what alternatives are available to keep the premiums close to where they are now. For example, do you currently have lifetime benefits? Reducing it to 5-year or 3-year could make a big difference in your premium. Another idea: Increase the waiting period from say 30 days to 90 days.

And if your blood is still boiling, consider picking up a copy of A Boomer’s Guide to Long-term Care where you’ll find more tips on cutting premiums and alternatives to nursing home insurance. You can download it right now for only $9.95.

Best wishes,


P.S. Got a question or comment about this posting or something else I’ve written? Then go to the comment box below. Or if you’d rather e-mail me directly, click here.

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