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LTC Insurance Blog
Simplifying the process of understanding Long Term Care, and helping you decide if Long Term Care insurance is right for you.
Why Are Long Term Care Insurance Prices Going Up?
There are two major driving forces behind all the rate increases: more claims and low interest rates.
People are using their Long Term Care policies more than the insurance companies expected. 95% or more of people keep their policies their entire life and a large percentage of people utilize the benefits. People are living longer these days, and most require some kind of assistance during their later years. This is just a fact of life. Insurance companies base their prices on certain assumptions, and when those assumptions are wrong the prices have to go up to make sure that there is enough money to pay claims.
We are also living in a country that has economic issues which are making it very difficult for insurance companies to get good investment returns. The rate of return on their portfolio is another assumption that must be met in order to keep the original pricing they offered to their policy holders. Virtually all Long Term Care insurance companies are being forced to raise rates to maintain their ability to pay claims and make a profit.
The need for Long Term Care is greater than ever and the cost of care continues to rise as the population ages and demand for care increases. Long Term Care Insurance will always be far less expensive than the cost of care itself. Would you rather pay $200 per month for insurance or $4,000 per month for care?