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Old Yesterday, 11:33 AM
 
Location: SLC
507 posts, read 447,620 times
Reputation: 943

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Our LTC insurance rates went up quite a bit - more than $1000 for the year. And - I seem to recall a less demanding adjustment a couple of year back. It is not a huge deal for us at this point but welcome it was not. Also, concerning that they can raise the rates in somewhat arbitrarily and as frequently as they like. What's to prevent them from raising the rates to the payout level later in life. That said, this is an important coverage so we plan to keep it on.

Apparently, this market segment is troubled. This is an interesting article from NYT covering this issue:

https://www.nytimes.com/2019/08/23/y...it_my_20190826
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Old Yesterday, 12:37 PM
 
11,413 posts, read 11,405,401 times
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Considering they may be on the hook to pay $80,000/yr for several decades I think $1000/yr. is incredibly cheap. In fact I had to do a double-take.
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Old Yesterday, 12:45 PM
 
1,308 posts, read 1,770,673 times
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I think the OP meant the increase was 1,000 not the premium
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Old Yesterday, 12:53 PM
 
2,455 posts, read 864,604 times
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This product was originally priced with very little data and it turned out to be underpriced- possibly because mortality rates among people in LTC are lower for those of the same age living on their own or with family. Most companies have exited the market after taking huge losses.

Rates are NOT just whatever the company wants to charge. They must be approved by the appropriate state regulators with studies and statistics. I've worked with these regulators. Trust me- most are looking aggressively for any assumptions that might overstate your need for a rate increase and have no interest in finding any reason your estimate might be too low.
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Old Yesterday, 01:20 PM
 
Location: SLC
507 posts, read 447,620 times
Reputation: 943
Quote:
Originally Posted by newred5 View Post
I think the OP meant the increase was 1,000 not the premium
Indeed. Thanks!

We are in late 50s and pay about $4600 for the annual premium for the policy we have had for a few years. But - it seems a good policy, with a max daily benefit of $370 and max lifetime cover of above $1.2 million. Hope not to collect any but hope isn't the strategy here.
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Old Yesterday, 01:28 PM
 
11,413 posts, read 11,405,401 times
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Quote:
Originally Posted by newred5 View Post
I think the OP meant the increase was 1,000 not the premium

Oh, okay. Silly me. That makes a hell of a lot more sense.
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Old Yesterday, 01:53 PM
 
73,066 posts, read 72,858,103 times
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We have a New York State partnership plan .we pay 7800 a year for two of us and get back a state tax credit of 1600 dollars for having it .

It offers us 3 years insurance coverage and once it is up we have 100% asset protection and income protection ... a special version of Medicaid picks up the bills at that point .....we have no look backs , trusts , no nothing needed
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Old Yesterday, 02:02 PM
 
30,021 posts, read 35,141,715 times
Reputation: 11923
Quote:
Originally Posted by athena53 View Post
This product was originally priced with very little data and it turned out to be underpriced- possibly because mortality rates among people in LTC are lower for those of the same age living on their own or with family. Most companies have exited the market after taking huge losses.

Rates are NOT just whatever the company wants to charge. They must be approved by the appropriate state regulators with studies and statistics. I've worked with these regulators. Trust me- most are looking aggressively for any assumptions that might overstate your need for a rate increase and have no interest in finding any reason your estimate might be too low.
Bada Bing! We are happy to pay the now occurring increases to keep the insurance solvent down the road.
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Old Yesterday, 02:19 PM
 
Location: SLC
507 posts, read 447,620 times
Reputation: 943
Quote:
Originally Posted by mathjak107 View Post
We have a New York State partnership plan .we pay 7800 a year for two of us and get back a state tax credit of 1600 dollars for having it .

It offers us 3 years insurance coverage and once it is up we have 100% asset protection and income protection ... a special version of Medicaid picks up the bills at that point .....we have no look backs , trusts , no nothing needed
That's about where we were before the latest increase. Now it is about $9000 for the two of us - and there is no credit from the state. Our coverage is a bit higher. I am frankly not concerned about the current (increased) premium level - but about the seemingly unclear rules around the rules around when and/or how much the premiums can be increased in the future. For instance, if the insurance company wanted to get rid of the insured - could it, say, change the premium from $4,600 to $46,000? A ridiculous example but I am wondering if there is any control on the frequency and amount/percentage of increase?

To elaborate - this insurance seems to involve a moral hazard for the insurance company. The younger subscribers are less likely to collect. They are mostly contributing to the pool when they are younger. Obviously - as they grow old, their chances of collecting go up (more than the premiums would justify). So, it's in the insurance of the insurance company to have the subscribers drop out when they get older. What stops them from exorbitantly increasing the premiums to them later on?

Last edited by kavm; Yesterday at 02:32 PM..
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Old Yesterday, 02:30 PM
 
1,150 posts, read 512,387 times
Reputation: 3078
Quote:
Originally Posted by athena53 View Post
This product was originally priced with very little data and it turned out to be underpriced- possibly because mortality rates among people in LTC are lower for those of the same age living on their own or with family. Most companies have exited the market after taking huge losses.

Rates are NOT just whatever the company wants to charge. They must be approved by the appropriate state regulators with studies and statistics. I've worked with these regulators. Trust me- most are looking aggressively for any assumptions that might overstate your need for a rate increase and have no interest in finding any reason your estimate might be too low.

All correct, except the first round of mis-pricing (when the product was very new, decades ago) was largely due to underestimating lapse rates. More people kept their policies, and hence filed claims, than was anticipated in the initial calculation of premium rates.


idk how old the OP's policy is, but currently offered LTC policies generally have limited benefit periods (2, 3, 5 years) - no more "lifetime benefit" periods. They are generally "guaranteed renewable" - meaning the company cannot arbitrarily cancel your policy but can increase premium rates, rather than "non-cancelable" - meaning the company cannot arbitrarily cancel your policy *or* increase premium rates.


Many companies took huge financial losses on LTC... and clearly it's still not something that's been nailed down.
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