When reviewing long-term-care insurance rates and plans you might expect to see big differences in costs and a more difficult approval process because MetLife and Prudential Insurance Companies are no longer selling long term care insurance policies. As of Mach 30th Prudential will no longer be accepting applications for individual LTC policies.
In 2010 MetLife stopped accepting new long term care insurance applications, and Unum Insurance Group stated that is no longer selling group long term care insurance. All three of these companies cited that the uncertainty in the economy, and interest rates they can make on their investments have caused them to reconsider their ability to make a profit considering future claims against their profit line.
Most long-term care insurance policies are bought by people in their early 60’s, which often pay premiums for 20-30 years before making an insurance claim. The insurance carriers can build up a reserve that allow them to pay those claims and make a profit, usually with high quality bonds. The current issues are that the current White House administration has ruined our economy with the massive debt, hostility towards business, and investing. Additionally with no relief in sight unless we see positive signs of a new administration in the White House this coming election, these insurance carriers have no reason to turn course and offer long term care insurance coverage.
With the hostility towards investing, high tax rates, and massive debt, bond yields are not high enough for insurance companies to make a profit, along with the aging policy holders continuing to make more claims are some of the negative effects of this current administration.
Most voters don’t realize that the crushing blow to business this White House administration is doing has repercussions that trickle down to the middle class and seniors. For example Prudential policy holders could see a premium increase of around 20% if approved by state insurance regulators. This will cause many seniors to cancel their policy, trim their coverage, and leave them to have to pay for a large share of their long term care costs.
It’s becoming more common for people to buy 3-5 years of long term care benefits and some couples are buying one policy with are shared-rider which allows the couple to split the benefits. Other options include lowering the daily benefit amount and paying for the difference, and lengthening the elimination period in which the insured pays the costs until the insurance kicks in. Additionally lowering the inflation period from 5% to 3%. However keep in mind all these options mean the insured will pay more out of pocket expense for their long-term care services received.
Qualifying for long term care insurance is becoming more difficult as insurance companies scrutinize each application checking an individual’s health records, prescription history, and medical services received. Not being honest on your application can also deny your claim.
Over the long run it’s still less costly to pay for a long term care insurance policy vs. paying for long term care services yourself. Its not a matter of “if”. But a matter of “when” you will need long term care services. For example a policy that costs only $2500 a year over a period of 20 years cost $50,000, and the insured could be covered up to $800,000. If one invested that money it would take them decades longer to have enough coverage to match the policy amount. Yearly costs for long term care can easily run into over $100,000. Start the process with a long term care insurance quote and compare long term care insurance costs.
