With Premiums Rising Dramatically, Should You Keep Your Long-Term Care Insurance?
Long-term care insurance is not for everyone. When clients ask us whether it is right for them, we consider their overall plan and unique situation. Sometimes we recommend long-term care insurance, sometimes we don’t, depending on the client’s needs and goals.
But what if you’ve already bought long-term care insurance, and you’ve seen your premiums rise dramatically in recent years? First of all, you’re not alone. A recent article in the New York Times noted that some premiums have gone up as much as 40 to 60 percent in recent years. The reason is that many insurance companies have suffered major losses on policies written more than ten years ago, and they are looking to recoup those losses. (A number of companies no longer offer long-term care insurance at all.)
If your premiums have increased, should you keep the policy? Make changes to it? Look for a cheaper one? Here are some factors to consider:
- If your policy is more than two years old, you probably will not be able to find a cheaper one to replace it if you choose to cancel the existing policy. It may also be harder to qualify for a new policy
- If your premiums have risen more than 20%, you may want to reduce your daily benefit to try and keep the premium down
- You might be able to reduce your premium by lowering the rate of inflation protection. However, make sure it is not applied retroactively
Given that every family is unique, with particular needs and goals, it is advisable to discuss matters such as long-term care insurance with an experienced elder law attorney. We can review your policy and your existing plan to determine whether it is in your best interests to keep your existing policy. We can also recommend other tools and strategies that can help ensure you get the long-term care you need without losing your life savings. Contact us today for a consultation.