This has become a hot topic – what shouid I do? Rates are going up; companies are getting out of the business; underwriting is getting tougher! There’s more confusion then ever in this marketplace. So- what should you do??
What you should do is a question I can’t answer in this newsletter – but let’s once again take a look at long term care.
First off-Why would you even consider long term care insurance? Those reasons haven’t changed.
Long term care insurance really does two things – independence and asset protection! Let’s be real – you want to hold onto your independence – Do you really want your neighbor, best friend or even your children helping you with the things that long term care will help you with – things like bathing, continence, toileting, eating, transferring and dressing? You want to be able to hire and pay for professional help. The other part of long term care is asset protection – simply said – rather then paying for care out of the money you’ve saved all these years and have earmarked for retirement or for your spouse and possibly your children – have long term care pay for it.
But it’s not a perfect solution. There have been significant rate increases the past few years – there are a few reasons for this. The product was greatly underpriced, claims have been much higher then anticipated and the investment income which support this have been significantly lower then expected. So how do the insurance companies make up for this shortfall? They increase premiums – both for inforce policies and rates for new policies.
So -What are you supposed to do??
First off – don’t panic. Most rate increases will come with options to make policy changes that will keep the premiums flat or have a modest increase. Changing your inflation option will most likely have the largest impact on maintaining your current premium. Other things you can look into changing that will impact the premium are benefit periods. More importantly-call your agent. Maybe your situation has changed as well. We are aware of this issue and we are here to help you manage your way through it. While no one wants to make changes-especially when those changes result in a reduction of benefits, it’s important not to lose sight of what the goal is – independence and asset protection! Planning is not a one and done type thing. It’s an ongoing process that needs to be actively managed!
I urge you to reach out to your broker and have a conversation. As always, feel free to reach out to me!
