I Just Got a Rate Increase on My Long Term Care Insurance Policy

By Fredrick P. Niemann, Esq. of Hanlon Niemann Wright, a Freehold, NJ Estate Planning Attorney

Clients with long term care policies are calling more frequently about rate increases.  They receive a letter from their long term care insurance company that they are increasing premiums by a whopping 60%.  If that’s not bad enough, the letter warns that the individual should expect further increases in future years.

Take hypothetical Jim who is 71 years old and healthy.  While he doesn’t have a crystal ball to look into the future, he is currently healthy and has no idea if or when he’ll need long term care.  How many rate increases could he face – and will he be able to afford them – before he ever starts to receive benefits under the policy?

The letter Jim received gives him options.  One of course is to pay the 60% rate increase and keep his benefits the way they are.  A second option is to reduce his daily benefit – the amount paid per day for care – or to reduce or eliminate the inflation protection that raises the daily benefit each year to keep pace with the rising cost of care.  A third option is to keep a more limited benefit for long term care.  In that case Jim does not have to make any more premium payments.

Jim is unsure of what to do.  He’s not even sure he understands each option to be able to make an informed decision.  In my next post I’ll explain the options and give you the pros and cons of each.

To discuss your NJ estate planning matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.