Long Term Care Insurance Increase

[RockyMtn]

Just got my bill from State Farm for six months of long term care insurance. Price went up a whopping 40% over what I have paid since 2003.

Annualized since 2003 I guess it's only 4% but man...that seems like quite a jump.

Anyone else see dramatic increases lately?

 

[Chuckanut]

"It's deja vu all over again" - Yogi Berra

 

[RockyMtn]

"It's deja vu all over again" - Yogi Berra

To be clear it went up 40% from 2013 last six months to 2014 first six months.

 

[Chuckanut]

Annualized since 2003 I guess it's only 4% but man...that seems like quite a jump.

It's also 10 less years off the maximum amount of time they might have to pay you benefits.

Here is why it is a deja vu kind of post: http://www.early-retirement.org/forums/f38/long-term-care-insurance-increase-69833.html

 

[RockyMtn]

It's also 10 less years off the maximum amount of time they might have to pay you benefits.

Which makes it even worse.

Here is why it is a deja vu kind of post: http://www.early-retirement.org/forums/f38/long-term-care-insurance-increase-69833.html

I guess a link to my link is deja vu...or just a repeat!

 

[ziggy29]

I know this product helped my parents when my dad needed home hospice care during his battle with cancer in 2005, and paid for itself several times over. That said, I no longer trust this product, especially at my relatively young age. I don't trust that my "locked in low" premiums won't see repeated double-digit increases, and I'm trusting that the whole system of delivering and paying for LTC won't see drastic changes by the time I'm in the peak demographic for needing it (in about 20 years).

 

[Chuckanut]

That said, I no longer trust this product, especially at my relatively young age. I don't trust that my "locked in low" premiums won't see repeated double-digit increases, and I'm trusting that the whole system of delivering and paying for LTC won't see drastic changes by the time I'm in the peak demographic for needing it (in about 20 years).

Exactly my problem. When I bought life insurance years ago, I locked in a range of premiums from a low to a high premium each year. No matter what they could never charge me more than the maximum amount for that year as stated in my policy. That was one of the big advantages of buying it while I was young and in good health. As far as I know, this does not apply to LTC insurance.

 

[ziggy29]

Exactly my problem. When I bought life insurance years ago, I locked in a range of premiums from a low to a high premium each year. No matter what they could never charge me more than the maximum amount for that year as stated in my policy. That was one of the big advantages of buying it while I was young and in good health. As far as I know, this does not apply to LTC insurance.

Yes and no. As long as you keep paying your premiums, they can't single you out for a rate increase if you develop significant health conditions (same as for individual health insurance in the pre-ACA days). But if they decide they underpriced your policy as a group (relative to loss history), they can jack up the rates as much as can be justified. So at best, their marketing to younger people urging them to "lock in low rates while you can" is a half-truth. Yes, your rates would be lower than if you waited and yes, you can lock in lower rates while you are healthy and insurable.... but the rates are not guaranteed to be fixed. The advertising never claims your rates will be fixed for life, but they phrase things in a way that makes it easy to infer (incorrectly) that they did.

Life insurance is a predictable product with a known future benefit limit which the actuaries know how to price -- and have done so for centuries. LTCI, on the other hand is a new product with different dynamics and a lot more moving parts. And they have historically badly underpriced their product given changes in life expectancy and health care costs overall.

 

[F4mandolin]

I've kept an eye on this product from near the beginning......quite simply if you sign a contract where you and they agree on the product......they expect you to follow through with your obligations.....but they leave room for themselves to bail-out at any time it is no longer in their best interest.