Some people with long-term care insurance started 2016 with unpleasant news. Premiums are rising, and the media reported policyholders, such as customers in Pennsylvania, could be paying as much as 130 percent more for their coverage this year.
All but nine states have adopted a long-term care insurance rate stability regulation but is it working?
State rules are supposed to limit company profits.The NAIC long-term care insurance model regulation was first modified to include rate stabilization provisions in 2000. An updated model was developed in 2014. While 41 states have adopted a rate stability regulation, only 11 have published the most recent amendment.
These rules may discourage some insurance companies from choosing to do business in states where a rate stability regulation has been adopted.
Insurance Companies Targeting Older Policy Holders
The most recent rate hikes enacted by the top long-term care insurers were for policies issued before the adoption of rate stability regulations.
Jesse Slome, executive director of the American Association for Long-Term Care Insurance says..."It's too early to tell how the revised rate stabilization rules will impact long-term care insurance because very few states have adopted the new standards and the issue may not be a priority in some states where policy sales have lagged".
So basically, the regulations to limit rate hikes for Long Term Care Insurance are in place but very few states are using them and according to the American Association of Long Term Care Insurance " It's not a priority"
Long Term Care Insurance may not be the best route for you to go when planning for Long Term Care expenses.
Take your time and research other options like life insurance with a long term care rider. The premiums won't increase and if you don't use the funds for long term care it still pays a death benefit to your beneficiaries.
Be cautious of planning for Long Term Care expenses with someone who will profit from selling you products [such as long term care insurance, life insurance, annuities, etc.], they may have their financial interest in mind as opposed to yours when deciding what products you should choose for your planning.
Questions about long term care planning? contact us today!