Long-term Care Insurance and Rising Premiums

If you already have an LTC policy

If you haven't yet had to endure a premium increase, you should nonetheless prepare for that eventuality. Once your LTC company announces a rate increase that you can't easily afford to pay, you have a few options.

Of course, you can drop LTC coverage, but that would probably be a shame. You could also shop for a different and less expensive LTC policy, perhaps a group policy if you have an individual policy. But that's probably a long shot, particularly if several years have elapsed since you took out your original policy, since premiums are based primarily on your age.

The most sensible thing to do is reduce the policy's level of coverage in order to reduce the premium to an amount you can afford. The insurer or your agent can spell out the options, which may include reducing the benefit period (the number of years of care the policy will cover). You might also be able to eliminate some of the optional coverage on your existing policy, such as the inflation kicker. You may also be able to reduce the amount of the daily benefit to bring the premium in line with your budget.

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