It is a growing concern among consumers that long term care premiums will be increased every year or two. Recent articles posted on Forbes, and other financial websites, could easily be distorted to support that theory.
“It’s understandable and unfortunate because little is being done to address the mistaken perception that increases on policies written years ago mean new policies will be treated similarly,” admits Jesse Slome, director of the American Association for Long Term Care Insurance, “the past does not equal the present or the future.”
Premiums for long term care insurance are designed to be level. They are based on age and health at time of application. While all insurance carriers reserve the right to increase rates in the future, they must first get approval from the State Department of Insurance and provide substantial proof as to why a rate increase is needed.
Individual policies written years ago have had the greatest impact on recent rate increases. Insurers simply did not anticipate the low lapse rate, the influx of claims or the current extended low interest rate environment, but policies sold today are priced with that already factored in, so that concern should no longer remain.
This is a complex topic and one that should no longer be avoided. We are here to help you address your clients’ concerns in an honest and straightforward manner. Please give your LTC Sales Rep a call today for further discussion.