Some Long-Term Care Insurance (LTCI) Premiums are Increasing- What you Need to Know

August 15, 2022

Over the past few months, some clients have received notification that their long-term care insurance premiums are increasing. If you are considering not paying the increased premium or have questions, please contact your advisors at Financial Plans and Strategies.

Before making your decision, it is important to understand the process that insurance companies must undergo to increase their long-term care insurance premiums for active policies.   For example, in Indiana, the insurance company is required to receive approval from the Indiana Commissioner of Insurance. This requires updated actuarial tables that show the need for the insurance provider to increase their premiums based on their projected costs for the policy coverage. After the request has been approved, they must notify clients of the premium increase and provide the clients with their options in writing.

While some increases in cost seem extreme, it is important to remember that these premiums are not raised very often. In fact, one of our clients who was impacted by this recent increase had not had a premium increase in almost 25 years. When insurance companies do get the approval to increase their premiums, it is usually to protect the insurance company from policies that have greatly outperformed their expected value.

We have provided a link below to an article from the American Academy of Actuaries that goes into greater detail as to why premiums are increased.

Please be advised to review your bill carefully as well.  In some cases, the bill may be for a lower premium that would reduce benefits.  Be diligent to verify that the coverage you are paying for is what your policy initially covered or that is at the level you wish to maintain.

As always, you should feel free to contact us with your questions.  It is our pleasure to assist you with these matters.