Long Term Care Insurance-Premiums On the Rise

The NY Times ran an article at the beginning of the month about the rising premiums for long term care insurance policies. Managing the Costs of Long-Term Care Insurance notes that New Yorkers with policies are seeing “double-digit increases in the premiums,” not the first policy holders to do so.

Insurance regulators in many states have been approving large increases in long-term care premiums for older policies, as it became clear that insurers badly misjudged the pricing on the policies and are losing money on them. In particular, regulators say, insurers overestimated the number of consumers who would let their policies lapse before filing any claims. That means more people are holding on to the policies, raising the likelihood of more claims.

The story notes that some policy holders have received notices of premiums increasing by 48-60% although some lower increases are occurring, especially with changes to the existing policies.  Some companies no longer sell new policies, according to the story, but seek rate increases on existing policies.