What Happens If My Long-Term Care Insurance Policy Premiums Keep Increasing and I Can’t Afford to Pay Them?

If you are faced with an egregious increase in your premium you may have legal recourse by:

1. Contacting state insurance regulators or
2. Voicing concern at public meetings to consider rate increases or
3. Lawsuit if the rate increase was not lawful

Consider making public record request to your state department of insurance to verify the new rate increase was granted by the regulators, or the insurance company secured a rate increase by other lawful means.  Check your states public records laws.

Large Long Term Care Insurance Premium Increases Force Challenging Financial Decisions

Many people who bought long-term care insurance policies to protect their assets against the rising costs of potential long-term care are facing large premium increases and are in the position where they have to make hard financial decisions. Unfortunately, they have three main choices:

1. Pay the rate increase
2. Reduce the coverage or
3. Let the policy lapse and lose the benefits for which they paid premiums for years and were counting on to pay for long-term care.

If you are in a financial situation where you can afford to pay your long-term care premium increase, this is probably your best option. If you don’t want to or can’t pay the higher premiums, your insurance company will usually give you a few options to reduce your coverage and lower your premiums. Not all companies will modify the terms. However, policy terms coupled with lower or frozen premiums seems to be an emerging trend.

Three options to lower your premium by reducing your coverage include:

1. Reduce the coverage term.Reducing the coverage term is one way to reduce premiums. If you have lifetime benefits, you can usually reduce coverage to three or five years, which would encompass the average claim period.
2. Cut inflation protection.Cutting back from 5% protection to about 3% can reduce your premiums and could be a good choice, depending on your age and how much the coverage has increased.
3. Take the paid-up option.Some states require insurers to offer this option to policyholders who drop their insurance. Instead of losing all the coverage you paid for, you’d get a benefit equal to the premiums paid to that point (the calculation varies by state).

There are also a few alternative options to long term care insurance to cover long term care costs, they include:

1. Purchase policies that combine long-term-care and life insurance. These policies pay-out whether you need care, and the premiums stay level. These have not been around for a long-time so how these policies will pan-out is not known.
2. You can add a chronic-care rider to a permanent life insurance policy which allows you to use a percentage of the death benefit for long-term care.
3. You can also cover some long-term care costs by buying a deferred-income annuity in your fifties or sixties that pays out in your eighties to help with long term care cost when you may need the care.

Schedule a No-Risk Consultation With an Experienced Long-Term-Care Attorney Knowledgeable in Long Term Care Insurance Products

Jonathan M. Feigenbaum, Esq. assists families nationwide with long-term-care insurance applications and appeals and litigation. He is a respected insurance policy holder advocate with extensive experience handling claims for long-term-care insurance, disability insurance, health insurance, and life insurance. Call today.