ziggy29
Moderator Emeritus
Sounds like he bought in when LTCI was a fairly new product and insurers didn't have a handle on pricing it properly since it's based on future investment returns and future health care/long term care inflation. And 20 years ago it's a pretty safe bet that they significantly overestimated investment returns and underestimated health care inflation over his lifetime.The premiums have been fixed at just over $600/year for nearly 20 years. Of course this is obscenely low for the benefits received, and he earned all of his premiums back in just the first two months of payout. But even if he'd been paying $4000/year he'd still be receiving 4x the benefits.
I suspect mispricings like these are why so many contracts are seeing huge rate increases. Though I wonder why it seems like only some insureds are hit with them and others, even with the same insurer, seem to have huge increases every few years.