Adjusting Long Term Care Insurance Premiums

Since the episode when long term care insurance premiums increased from 10 to 40%, people started to have the notion that insurance companies can impose an increase on premiums anytime that they want.

That, however, is untrue. In real life, insurance companies should get approval from the department of insurance first before it can impose an increase. What’s more, it is not allowable to single out an individual’s policy for the increase, as it should involve a class with a specific long term care insurance (LTCI) policy.

Now if you are a new buyer, you have nothing to fear because you still have the freehand to dictate how much you’ll be paying annually for premium. Everything stipulated in your LTCI policy will have an effect on your premium so study your choices carefully.

Let’s say you’re 40 and paying an annual premium of $2,490 because you have just purchased a comprehensive LTCI policy which stipulates a maximum benefit worth $200,000 for a five-year coverage period. Apart from these factors, you also picked a 30-day elimination period and a 5% compound annual inflation protection.

Had you gone for smaller numbers you could’ve saved yourself a chunk of cash. For instance, instead of a five-year benefit period, you could’ve opted for three years. A waiting period of 90 days to one year would’ve pulled down your premium drastically but since you went for 30 days, you’re now paying a fortune.

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