Thousands of long-term care insurance policy holders face unexpected premium increases tied to actuarial losses on older policies. Carriers cite services inflation and higher-than-assumed costs, including nursing home and home health expenses, along with underwriting assumptions that no longer hold. A retiree example shows a premium rising from $4,200 to $8,400 at renewal with a short decision window. Without inflation riders, the daily benefit buys a smaller share of care over time as costs rise. Policyholders typically must be offered downward modifications under state regulation, such as accepting the increase, reducing the daily benefit, or other options that trade premium affordability for reduced coverage.
"Most carriers, under state regulation, must offer downward modifications rather than force an all-or-nothing choice. The realistic paths: Accept the new premium. Pay $8,400 annually for a benefit that already trails inflation. If she lives to 90, that is another two decades of premium drag on the portfolio. It's defensible only if she has strong family longevity, no other liquid coverage, and values the certainty."
#long-term-care-insurance #premium-rate-increases #actuarial-assumptions #inflation-and-healthcare-costs #retirement-planning
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