4 Ways to Handle Long Term Care Insurance Rate Hikes

If you can still live comfortably despite the increase in premiums, keeping your policy is still the best option. Bear in mind that historically, 7 in 10 Americans who survived to the age of 65 will need long term care. If you cancel your current policy and decide to buy a new one when you’re older, not only will you have to pay premiums that are more expensive than today’s rate, you’ll also have to face new underwriting policies that may lead to the disapproval of your application.

If the new rates will cause too much financial sacrifice on your part, consider lowering your benefit amount. Your benefit amount is one of the factors that greatly affect the costs of your LTCI. The lower it is, the more affordable your policy will become. Before you do this, however, consult a long term care adviser who can guide you in determining the right amount of benefits needed to pay the cost of care in your area.

If you have the money, owning a policy with lifetime benefits is a good way to secure your old age. After all, even if the average claim for LTCI is just 2.8 years, no one can say for sure how long you will need care. But compared to cancelling your policy altogether because of high premiums, shortening your benefit period to 3-5 years is a better option.

For people aged 70 and older, a policy with 5% compound inflation protection may no longer be advisable since it is very likely that they will file a claim in the next few years. The cost of services by then may not be very different from today, which means even without the inflation protection, the policy can still pay for it. For these people, dropping or reducing the inflation rate is a good option to consider.