Thinking about Long Term Care insurance…

better read this story…

Dozens of insurers were selling LTCI around 2000, but inaccurate assumptions about interest rates, policy lapse rates, policyholders’ use of benefits, and the cost of benefits hurt issuers’ performance. Most have dropped out of the market, and many have sought regulator permission to raise premiums by 100% or more. The issuers say they need the increases to keep blocks of LTCI business solvent. Many policyholders and some regulators assert that the issuers were in a much better position than the customers to assess and manage claim risk, and that the issuers, not the customers, should bear most or all of the burden for the increases..

Source: State Regulators Free the Long-Term Care Insurance Rate Hawks | ThinkAdvisor

One comment

  1. I received several mailings of LTCI around that time. The premium was $46 per month for someone 44 years old. . The low rate sent off alarm bells for me. Even after 40 years $22,080 of premiums did not seem like enough. I knew take rate was low, cancellation and future cost high. It also helped that my sister worked for a State Farm agent and had income 3 times more than me. She said NO WAY, she was going to purchase LTCI. Insurance companies could raise premiums, file bankruptcy, go out of business over a 30 to 40 year period. Family history at the time showed that most died before or spent less than 3 months in a facility before death. Dodge a bullet on the LTCI it seems.


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