5 Easy Ways to Deal with Long Term Care Insurance Rate Hikes

September 22, 2017

A lot of policy owners today doubt whether their policies are still worth keeping following notices from insurance providers indicating their plans to increase long term care insurance rates. Long term care insurance specialists, however, advised the public to keep their policies because compared to using life savings to pay for care, paying a pre-determined amount every month for premiums is still way affordable. A semi-private room accommodation in a nursing home, for example, can cost an individual as much as $82,125 annually; this amount is more than what an average American makes in a year. A family who will have to spend this much to pay for care will surely suffer financially.

 

Here’s a table of the average annual cost of long term care:

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Rather than canceling their policy and face the consequences of not being insured, policy owners are advised to strike a deal with their insurance providers and negotiate how they can keep their premiums within their paying capacity.

How to Deal with Long Term Care Insurance Rate Hikes
1.     Pay the new premium

2.     Cancel LTCI riders you no longer need

3.     Lower your daily benefit amount

4.     Shorten the length of your benefit period

5.     Adjust your policy’s inflation rate

 

 

 

 

 

 

 

 

 

 

 

Pay the new premium

 

If you can pay the new premium without too much financial sacrifice on your part, keeping your policy is still the best option. If you discontinue your policy because of the higher rates, and decide to purchase a new one in the future, there’s a great chance that you will be charged with an even higher rate because by then you will be older. Remember that the older you are, the more expensive your policy will be.

 

Cancel policy riders you no longer need

 

Evaluate your contract and see if you have purchased riders you no longer need. Cancelling them is a wise move in keeping your long term care insurance rates affordable. For instance, if you and your wife are already separated, the Spouse Survivorship rider you bought a long time ago is no longer necessary.

 

Lower your daily benefit amount

 

Adjusting your benefit amount to a level that’s still enough to pay the actual cost of care in your area is another way to keep your premiums affordable.

 

Shorten the length of your benefit period

 

The average length of claim is just 2.8 years based on the report made by the American Association for Long Term Care Insurance. If you bought a policy with lifetime benefits, you might want to consider cutting the benefit period to three (3) years, or if you want to be safe, five (5) years.

 

Adjust your policy’s inflation rate

 

The inflation protection is one of the most important riders for younger policy owners because there’s a great chance that by the time they file a claim, the costs of services are already way more expensive than today. However, for people aged 75 and older, who are very likely to file a claim in the not so distant future, this rider may no longer be necessary. For them, dropping or adjusting this rider is a good option to consider when faced with an increase in long term care insurance rate.

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