Navigating Increasing Long-Term Care Insurance Premiums

Seventy percent of people turning age 65 will need some form of long-term care during their lifetime, with women needing care longer than men. Knowing the cost of care is not covered by insurance or Medicare, you still obtained insurance, hoping to be amongst the 30%.

Your premium increased years ago, and you hoped the cost would stabilize. This year, you open that envelope, you see those numbers, and your heart skips a beat. Pain is inevitable, suffering is optional. You have options.

Why Is This Happening?

The truth about why these increases are happening is simple: these insurance companies didn’t do the math right! They didn’t anticipate how long we’d live, how many of us would keep our policies, or how expensive healthcare would become.

And now? Now they’re asking us to make up the difference, or they could go out of business. If they do, you and every other policyholder with that company would have no coverage whatsoever.

I had a conversation with Martha, a 72-year-old retired teacher whose premium jumped from $2,400 to $3,480. She looked at me and said, “I didn’t budget for this!”. Many Americans are feeling the same way.

You Have Choices

When that increase notice arrives, remember you have three powerful options:

1. Pay the increase if you can. Robert, a wonderful 68-year-old gentleman I met, told me he looked at his budget, cut back on a few restaurant meals, and kept his full coverage. “This is worth it to me,” he said. And for many of us, it will be, too. He didn’t want to put a price tag on his peace of mind.
2. Modify that policy. You can absolutely negotiate! Most Americans have regular cash flow that increases with inflation from social security, so your insurance doesn’t have to cover the total cost of long-term care. Lower your daily benefit. Shorten that benefit period. Adjust the inflation protection. Susan – a brilliant woman who knows her worth – reduced her benefit from a lifetime to 5 years and changed her inflation protection. Her premium stayed the same.
3. Look at non-forfeiture. James paid $42,000 over 15 years and chose to stop paying but keep some coverage. That’s your right as a policyholder.

What You Need To Do

• Get real about your needs. Ask yourself: What’s changed since you bought this policy?
• Talk to a senior care advocate. Ellen did this when her premium jumped 60%. Her advocate showed her that care in her area costs less than her policy covered – she could reduce coverage and still be protected!
• Consult a financial advisor. They can show you how these increases fit into your financial picture.
• Explore hybrid policies. If you are healthy, these combine life insurance with long-term care and often guarantee no premium increases.
• Take. Your. TIME. This is not a decision to rush.

The Future Is Still Bright

Please remember: Even with modifications, your policy is valuable protection against what could be catastrophic costs down the road. By making thoughtful adjustments, you’re showing wisdom and foresight.

And when you know better, you do better.

YOU’VE GOT THIS!