Q&A with client on Long Term Care Insurance quotes past and future potential rate increases


Please explain Nonforfeiture Benefit.

Difference between Step Rated and Compound increase options.

What is List Bill payment method?

Don’t see cc option for ongoing payments.

Are companies other than the long term care insurance quotes you sent likely to have lower premium increases? Percentages of past long term care insurance quotes increases on worksheet seem astronomical. 25-35% every year or two? Is this right? Doesn’t make sense if I already pay for inflation protection. Please clarify.

Compare LTC:

1) the non-forfeiture rider adds about 15% to the long term care insurance quotes cost and it would give you the ability to drop your policy at any time and all premiums you put in up to that point are set aside by the company. In the even you end up needing care you’d have the premiums paid to use as benefits. 99% of people who buy one of the long term care insurance quotes we sent end up keeping it so it’s probably not worth the money.

2) The step rated will grow both your benefits and premiums that percent each year. This is only used by us for older clients who buy a policy in their 70’s who have a much shorter time horizon.

3) For small group plans, you’d be direct bill for your long term care insurance quotes and they would mail you a good old paper bill when do.

4) You can pay with a CC just on the first year’s payment. They send a bill going forward and don’t allow a CC because of the fees. No LTC company will allow CC payment indefinitely and in fact, there are only two companies where you can make the first year’s payment by CC.

5) They all have had increases except a major mutual company. They however has not been selling it for nearly as long, the one we sent started in 1981 and the major mutual in the year 2000. The industry underpriced the risk on those older policies from the 1980’s and 1990’s as they were just learning the actuarial numbers. The long term care insurance quotes being sold now have corrected for those miscalculations such as women file 68% of claims so now the one we sent charges women more than men, don’t diabetics who take insulin, along with other health related changes. In short, they just take the healthy now.

The 25-35% increases were not in all states and across the board. They have to file state by state as different populations file claims at different rates. It certainly was not every two years, the policies that allowed the increase made them break the increase up over a three-year period. Now they have corrected for the underpricing the long-term care insurance quotes initially.  Premiums will be must more stable going forward in my opinion.

One last macro-economic item that caused the increases with the long-term care insurance quotes is back in the 1980’s when they were pricing this stuff they had no idea fast forward 20 years we’d have a Fed manipulation interest rates for so long. They thought they could take premiums received and buy US treasuries and get the 5% that had been the average for 100 years, not the 10 year T-bill is paying just 2%. From an insurance companies view that’s a huge miss on anticipated revenue. Now, they are pricing the current long term care insurance quotes based on an ultra-low interest rates environment for the foreseeable future and thus premiums will be much more stable in my opinion.

To be fair, rate increases on long term care insurance quotes can happen but they are highly regulated.