If you are like many who have received long term care insurance, you have likely already received a notice that your premium is going to increase. If you haven’t yet, then there’s a likelihood that you will be receiving this notice fairly soon. Many companies have raised their premiums or are already planning to. As a result, there are many people who are seeking to gain a better understanding of long term care and how it works, as well as some insight into ways that they could possibly save money on their policy while still paying a respectable premium.
Long term care insurance helps individuals to pay for the care that they need when they are no longer able to care for themselves. It tends to cover home care, adult day care, assisted living, hospice care, respite care, nursing homes, and facilities for people with Alzheimer's. A long term care insurance policy is going to typically pay around $50 to $250 per day in costs for nursing home care. The prices vary depending on the type of help that the senior is receiving and also their condition at the time.
Over the past few years, many companies that sell long term care insurance policies have had their profits harmed by low interest rates. This is because the companies are investing in policyholders premiums, and when their rates are low, their investment returns are also low. This has caused a lot of companies that used to sell long term care insurance to have completely ceased in these provisions because they feel as if they’re not getting enough profit for providing people with this form of coverage, despite how the amount of demand only continues to increase.
There is also a lot of uncertainty for these insurers. They are underwriting a long term care policy that is dealing with a possibility of an event that may not happen for the next 20 or 30 years. Sometimes it doesn’t happen at all. In the past five years, 14 companies have stopped selling long term care insurance policies. However, those insurers are still honoring current policies that many of their policyholders have kept up to date.
The fact of the matter is that if you have a long term care insurance policy that was issued over 10 years ago, there’s a good chance that you’re going to face a rise in the costs for your premium. When issuing these earlier policies, the companies didn’t understand how they were supposed to underwrite for the risk of long term care in the future. Many of the companies used to underprice their policies to help them attract more customers when the coverage was initially popular. Other companies assumed that more people would allow their policies to lapse, which didn’t meet up to their plans. However, your insurance company cannot raise your individual premium based on your advancing age or your declining health; they can only raise costs based on group premiums.