There seems to be a lot of activity in the long term care insurance marketplace as it relates to premium rate increases. Often times, people will hear an announcement regarding a rate increase and automatically assume that if they have a policy from that particular long term care insurance company that their policy will automatically be affected, this usually isn’t the case. In fact, prior to a long term care insurance company increasing rates they must receive approval from the state in which the increase will occur. This can cause some confusion because states will approve different increases. The most important thing for people to understand is that insurance companies cannot increase rates for an individual. Rates must be increased for entire class or pool of insureds.
Genworth Long Term Care Insurance
In October 2010, Genworth announced they would be seeking approval for a rate increase on two of their long term care insurance policies, PCS I and PCS II. These policies are older policies, and increases at this time will only occur in Texas and Pennsylvania. Policy owners in Texas will experience an 18% premium increase, while Pennsylvania will phase-in a 9% premium increase per year over a two year period (for a total increase of 18%). Impacted policy owners will be notified by mail 30-days in advance of their next premium payment becoming due.
Mutual of Omaha Long Term Care Insurance
Mutual of Omaha has filed for a rate increase on long term care insurance policies purchased in 2004 or earlier. The filing will be for the following Mutual of Omaha long term care insurance products:
Mutual of Omaha has filed for a rate increase of 30% in 2011 & 11.5% in 2012 for policies containing a lifetime benefit period. Mutual of Omaha is seeking a rate increase of 15% in 2011 for policies with all other benefits. Please note that this is what Mutual of Omaha has applied for with each state these policies were issued in. This doesn’t necessarily mean the rate increase will be approved, and/or if an increase is approved it will be at the same level requested.
Prudential Long Term Care Insurance
Prudential has announced that it will refresh its rates on their LTC3 long term care insurance product. This is Prudential’s most current LTC insurance product and should not impact any existing policy holder’s. The refreshed rate will affect those applying for long term care insurance with Prudential in Alabama, Minnesota, Nebraska, New Hampshire, New Jersey, and New Mexico. This increase will affect those considering purchasing the Prudential LTC3 product. Applicants will have until June 22, 2011, to submit their applications in order to receive the existing rates. Any application received from June 23, 2011 and on will be issued the new rates.
Other interesting news from Prudential includes the addition of a few new product features that include: 2% Compounded & 4% Compounded Inflation Protection options and a 1-Year Benefit Pool. These features may not be available in all states. Prudential has also discontinued the availability of the following Optional Riders:
- Full Cash Benefit Rider & Flexible Cash (50/50) Benefit Rider
- Unlimited/Lifetime Benefit Option
For policy owners who already own policies with these features they will not see any changes.