Think this article explains some of the reasons cited for the LTCI increases some have experienced this year. industry is saying low interest rates are part of the problem...
Article from Employee Benefit website...
LTC underwriters expected to seek hefty rate hikes
By Editorial Staff
February 21, 2010
A steep increase in long-term care insurance (LTC) premiums
is in the forecast for 2010, with some of the industry’s largest underwriters expected to seek permission from state regulators to pursue such action.
Among the reasons recently cited by A.M. Best Co. analyst Jeff Lane in a published report: ultra-low interest rates, which have eroded insurance company investment earnings, as well as policyholders living longer
and holding onto their policies.
With regard to the former point, the American Association for Long Term Care Insurance
estimates that investment returns finance up to 60% of LTC benefits. Less rigorous medical standards in older policies also play a role, resulting in an unexpectedly high number of LTC claimants.
The Prudential Insurance Company of America, Met Life Inc. and John Hancock Life and Health Insurance Co. have sought rate hikes ranging from 18% to 25% on policies that were underwritten a decade ago, according to Investment News
. Policyholders who were age 70 or older when the policies were sold are exempt in most cases.
Claude Thau, an LTC insurance wholesaler and president of Thau Inc., noted that financial advisers often are caught off guard by such increases because such activity is rare, though they’re now more cautious. Added D. Randolph Waesche, president of Resource Management Inc., argued that policyholders should not drop coverage in the face of a rate increase when factoring in higher costs relative to the benefits provided.