Tag Archives: Long-term care insurance


Genworth’s Rate Increase History in Florida

Florida enacted its long-term care insurance Rate Stability Regulation with an effective date of March 1st, 2003.


Genworth* has not had any premium increases on any of the policies they’ve issued in Florida since March 1st, 2003.

Every long-term care policy purchased today by a resident of Florida is protected by Florida’s Rate Stability Regulation.


Click here to view the Long-Term Care Insurance
Rate Increases in all 50 states.


* Genworth Life Insurance Company (NAIC#70025)

SOURCE: 2013 Long-Term Care Rate Guide Data Call

Transamerica’s Rate Increase History in Florida

Florida enacted its long-term care insurance Rate Stability Regulation with an effective date of March 1st, 2003.


Transamerica* has not had any premium increases on any of the policies they’ve issued in Florida since March 1st, 2003.

Every long-term care policy purchased today by a resident of Florida is protected by Florida’s Rate Stability Regulation.


Click here to view the Long-Term Care Insurance
Rate Increases in all 50 states.


* Transamerica Life Insurance Company (NAIC#86231)

SOURCE: 2013 Long-Term Care Rate Guide Data Call

North Carolina Protects LTC Insurance Policyholders from Rate Increases

Rate Hike ProtectionNorth Carolina has a regulation to protect long-term care policyholders from the large rate increases which have occurred on many of the earlier LTCi policies.

Long-term care insurance premiums used to be calculated according to the amount of claims the insurer projected to pay.  When actual claims proved to be much higher than projected claims, the insurers were allowed to request (and they received) some very large premium increases.

To try to avoid large, long-term care insurance rate increases, and to promote more stable premiums over time, North Carolina has enacted one of the stricter LTC insurance regulations in the country.

This regulation requires that before any long-term care insurance policy can be sold to a resident of North Carolina, the insurance company must first provide the North Carolina Department of Insurance with certification from a qualified actuary that the policy is priced appropriately enough so that no future premium increases are anticipated.

A new long-term care insurance policy cannot be sold to a North Carolina resident unless the policy has this certification in place.

The actuary must certify that:   “…the premium rate schedule is reasonably expected to be sustainable over the life of the (policy) form with no future premium increases anticipated.”

North Carolina’s regulation requires that a “cushion” be priced into the policies so that even if the actuarial assumptions are not met, a premium increase may still not be required.  In other words, the actuaries must price into the policy a “margin of error”.

Before this regulation was enacted, Insurance Companies were not allowed to have a margin of error when they priced their policies.  Because the insurance companies were not allowed to have a margin of error, the pricing on some earlier policies has proven to be inadequate which has led to the need for premium increases.

IMPORTANT:  Not every long-term care policy is covered by this regulation. 

Not every LTC policy is covered under this regulation.  This regulation only protects those who purchased their long-term care policy in North Carolina after February 1st, 2003.  Policies that were purchased before that date are not governed by this regulation.

How well has this regulation worked?

11 companies sell more than 90% of the long-term care insurance policies that are purchased today.  7 of those 11 companies have not had any premium increases on any of the policies they’ve sold in North Carolina since this regulation took effect on February 1st, 2003. 

Those 7 companies are (alphabetically):  Genworth, Lifesecure, Mass Mutual, New York Life, Northwestern Mutual, Thrivent and Transamerica.

The other 4 leading companies have each had just one rate increase on only a small portion of the policies they’ve sold in North Carolina since February 1st, 2003.

Bankers Life & Casualty had one premium increase ranging between 5% and 27.5% on the policy forms it released in November, 2003.  All of the other LTCi policy forms Bankers Life & Casualty has issued in North Carolina since November, 2003 have not had any premium increases. 

John Hancock had one premium increase of 39.1% on the two policy forms it released in July, 2003.  All of the other LTCi policy forms John Hancock has issued in North Carolina since July, 2003 have not had any premium increases.

Medamerica had one premium increase of 7.5% on the policy forms it released in January, 2005.  All of the other LTCi policy forms Medamerica has issued in North Carolina since January, 2005 have not had any premium increases.

Mutual of Omaha had one premium increase of 11% on the policy forms it released in November, 2004.  And Mutual of Omaha had one premium increase of 14.3% on the policy forms it released in February, 2005.  All of the other policy forms Mutual of Omaha has issued in North Carolina since February, 2005 have not had any premium increases.

If you still have questions about North Carolina rate increase, or you would like to speak to a licensed agent, please click here.

Don’t Believe All The Negative Headlines

Long-Term Care Facts Column: article originally published by the Redlands Daily Facts August 29, 2013:

How sick is the long-term care insurance industry?long-term care insurance

The headlines are bleak:
“What’s killing the long-term care insurance industry?”
“Costs of Long-Term Care Rise While Payment Options Narrow”

Contrary to what is often published on the internet, long-term care insurance premiums are very stable.  According to the Texas Department of Insurance website, 8 of the top 13 long-term care insurers have not had any premium increases on any of the long-term care policies they’ve sold since 2001.  (I wish my medical insurance premium was the same as it was in 2001.)

In August 2000, regulations were passed that removed the profit incentive for any premium increase an insurer requests on long-term care insurance.  Most of the premium increases we read about are for policies that were sold before these regulations took effect.

“Is long-term care insurance doomed?”

It’s true that a few insurers like Met Life, Prudential, and UNUM have stopped selling long-term care insurance.  However, other long-term care insurers have had double-digit growth each year, which is a remarkable feat in this economy.  In fact, today, nearly twice as many people own long-term care insurance as did in the year 2000.

“Is long-term care insurance safe?”

Since the financial meltdown of 2008, only two insurance organizations have had an increase in their financial ratings by A.M. Best from “A” to “A+”.  Both of those companies are top long-term care insurers.

“Is the long-term care insurance industry in a state of flux?”

What industry is not in a state of flux right now?  Every industry has been turned upside down since the internet was opened to the public in the early 90’s.

Remember how personal computers were once referred to as “IBM-compatible”.  Well, in 2004, the company that had set the standard for personal computers stopped selling personal computers.  After dominating the PC market for two decades, IBM abruptly left the PC market.  No one was silly enough to write the headline:

“IBM stops selling personal computers–future of personal computing is in doubt!”

Yet, in the Spring of 2012, after one of the larger long-term care insurers announced that it would stop selling long-term care policies, “experts” concluded that the future of the long-term care insurance industry was “in doubt”.

IBM made a simple business decision in 2004.  They concluded they were not nimble enough to profit from low-margin, price-sensitive, computer manufacturing.  Insurance companies also make simple business decisions. There are significant overhead expenses to create, market, and underwrite long-term care insurance.

These expenses are incurred regardless of how many (or how few) policies are actually sold.  If sales are too low, the overhead costs per policy make it unprofitable for the company to sell new policies.

Not only are some LTC insurers growing, but some that had gotten out of the business have decided to get back into the business.  One highly-rated insurer that sold long-term care insurance for nearly 20 years, and then stopped selling new LTCi policies, started selling new LTCi policies again after significantly reducing their overhead and streamlining their business processes.

Healthcare reform does not provide any long-term care benefits.

The “CLASS Act” is dead.

Medicaid is not the solution for the middle class or the wealthy.

Long-term care insurance policies are not the perfect solution.  But, a well-designed long-term care policy, especially a government-approved long-term care partnership policy, may be the best way to prepare for the “long-term care tsunami” headed our way.

To learn more, send your questions or comments to questions@LTCFacts.org.


Long-term-care insurance helps protect families

Long-Term Care Facts Column: article originally published by the Redlands Daily Facts August 8, 2013:

Long-term-care insurance is an emotional subject. I mean, really, who wants to talk about the possibility of needing help with bathing, dressing and toileting? “It could never happen to me!”

When starting a discussion with a loved one, it is fairly normal for there to be denial. Instead, you can try discussing the need for protecting the family. Think of it this way: It’s not protection for you, it’s protection for your family. Because long-term care is really a family issue. Do you have a plan to take care of your family should you ever need help with daily living?

Many people are unaware of long-term care until they know someone who has needed long-term-care services. They hear firsthand accounts of the importance of a caregiver, the high cost of long-term-care services and the impact on the family. Or, people see firsthand how long-term-care insurance protection has helped a family have choices in caring for family members in times of need. Stories like these are often the trigger needed to get people to consider the possibility that, “It could happen to me!”

Most people who have considered protection for their families stop with auto, property, health and life insurance. These types of insurance products protect families against catastrophic losses. But what about a time in someone’s life when he or she might need help with two or more of the activities of daily living — bathing, continence, dressing, eating, toileting and transferring. Should a loved one need daily assistance with two or more of these activities, everyone in the family becomes involved. Therefore, long-term-care protection affects the entire family.

It is a fact that most people buy long-term-care insurance because they love their families. Having this protection empowers your family to make the best possible decisions with far more choice than without this protection. So, how can you get your loved ones to start the discussion?

One conversation starter is this: “I’d like to talk to you about living a long life, and to be more prepared to protect your family.” Most people assume they will never need assistance, yet assume they will live a very long life. Approach the subject from the positive of living a long life, instead of the possibility of needing assistance.

Another conversation starter is, “It’s not a question of who will take care of you. Of course your family will take care of you because they love you. It’s a question of how your family will take care of you and the impact it will have on their lives.”

Most people want to stay in their homes as long as possible, yet they don’t want to be a burden to their spouse or children. By choosing to protect your family, there will be far more choices available to remain in your home with help from the outside, or even a family member who is paid to provide care.

Lastly, you can always hand your family member a copy of this article to get the conversation started. However you choose to start the conversation, it’s important to at least make a plan. Focusing on the importance of family, choice and protection is a good way to start.

To learn more, send your questions!

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Three Big Problems With Long-Term-Care Insurance

Long-Term Care Facts Column: article originally published by the Redlands Daily Facts July 24, 2013:

There are three issues concerning people who are considering long-term care insurance:Problems with long-term care insurance photo

  1. The underwriting and approval process can be long and difficult

  2. Claims may not be paid in the future when care is needed, and

  3. Premiums might skyrocket forcing you to drop the policy.

In the years I’ve been in the long-term care industry, the one thing I’ve learned is that the companies that have the toughest underwriting are usually the easiest and the quickest to process and pay claims.  At first glance, that statement may seem odd.  But when you think about it, it makes perfect sense.

Long-term care insurance underwriting can be difficult.  The process may include the review of medical records, blood and urine tests, a telephone interview and maybe even a cognitive test.  It is not always easy to qualify for long-term care insurance, and there is a reason for it.  Consider the amount of annual premium versus the amount of dollars spent paying a claim.  The largest long-term care claim on record is over $1.5 million of benefits, for only a few thousand dollars worth of premiums.  The insurer must be certain they do not issue a policy to someone who will go on claim in the very near future.

Call up 10 nursing homes or assisted living facilities in your area and ask the administrator:  “Which long-term care insurers pay claims the best.”  As in any industry, there are the “good companies” and the “not-so-good” companies.  Just because Yugo made a bad car, doesn’t mean that Toyota makes bad cars.  The same is true in the LTC insurance industry–there are the “Yugos” and then there are the more reliable insurers.

Of all the companies in the industry, the companies that pay the claims the quickest, by far, have the toughest underwriting.  Again, “tough underwriting standards” are a good thing because it means that the insurance company is serious about paying claims.

Some recent news articles have focused on long-term care insurance premium increases.  These articles imply that someone buying a policy today will be experiencing the same premium increases as someone who bought a policy 10 years ago.  The reality is that someone who buys a policy today has a much lower probability of experiencing a big rate increase.

For example, some states have approved cumulative premium increases, on some LTCi policyholders, as high as 95%.  Those policyholders have the choice of reducing their benefits or keeping their benefits the same and paying this higher premium.  Those policyholders who elect to keep their benefits the same and pay the additional 95% in premium, their new, higher premium, is actually lower than what you would be paying for the same benefits if you purchased a new policy today.  That’s because policies offered today are the MOST EXPENSIVE policies companies have ever offered.

Again, at first glance, you might be upset that if you buy a policy today that it is the most expensive LTCi policy that the company has ever offered.  But you shouldn’t be upset.  That’s why I said before, “The reality is that someone who buys a policy today has a very low probability of experiencing a big rate increase.”  Today’s policies are priced to avoid big premium increases.  Long-term care insurance companies have taken what they’ve learned over the past 30+ years and priced the current generation of policies with very conservative assumptions to try to avoid big premium increases in the future.

Again, you won’t hear this from any of the news outlet.  The headline, “New LTCi policies unlikely to experience big premium increases” would not sell any newspapers or drive traffic to websites.  Neither would the headline, “9 out of 10 Nursing Home Administrators Agree That The Top LTC Insurers Pay Claims Quickly.”  But both of those headlines are more accurate than much of the dribble that has been published recently.

To learn more, send your questions or comments to questions@LTCFacts.org.


Carolyn Olson is founder of LTCFacts.org, a website providing short articles about long-term care insurance to help people make decisions about buying long-term care insurance.


Busting Myths About Long-Term Care Insurance

Busting myths about long-term care insurance photoMyth #1  Most long-term care insurance claims are for nursing home care

When the long-term care insurance began in the mid-1960’s, most policies only covered the cost of nursing homes.  It wasn’t until the early 1990’s that insurers began including riders that covered home health care.  Now, it’s considered the norm for long-term care insurance policies to cover the cost of home health care.  According to the American Association for Long-Term Care Sourcebook 2012-13, in 2011 only 31% of claims were for nursing home care, while 56% of claims were for home care.  The home health care industry is booming as more people realize there is a choice: receive care at home.

Myth #2  If you have health problems, you can’t qualify for long-term care insurance

While it’s important to apply for a long-term care policy when you are healthy, just having some health problem will not prevent you from getting a policy.  Once stable, even people with chronic diseases can even receive the preferred health discount.  People with diseases such as high blood pressure, anxiety, high cholesterol, thyroid disorders, skin cancer, osteopenia, mild arthritis, asthma, enlarged prostate, carpal tunnel, GERD, glaucoma, heart murmur, herniated disc, Irritable Bowel Syndrome (IBS), Crohn’s disease, macular degeneration, mitral valve prolapse, kidney stones, benign polyps, scoliosis, TMJ, familial tremors, and ulcers can all be approved for long-term care insurance, depending on the insurer.  It is important to consult a long-term care insurance specialist to help you with your individual situation.

Myth #3  Long-term care insurance is unaffordable

The real question is this: can you afford not to have long-term care insurance?  If you have over $50,000 in assets, or regular income that needs protection, then policies can be designed to be affordable.  Even a small amount of long-term care insurance can make a difference.  According to the Genworth 2013 Cost of Care Survey for California, the average cost of home health care is $140 per day, assisted living facilities average $125 per day, and nursing homes average $230 per day.  For a modest long-term care insurance policy covering $100 per day (90 day elimination period for 3 years), the cost is approximately $100 per month (depending on age and health).  Looking at home health care alone, spending $1,200 per year yields $36,500 in savings.  Clearly, some insurance is better than no insurance.

Myth #4 Long-term care insurance premiums increase every year

Contrary to what is often published on the internet, 4 of the top 10 long-term care insurers have never had any premium increases on any of their policyholders. 2 of the top 10 long-term care insurers have not had any premium increases on any of the policies they’ve sold since the rate stabilization regulations began to take effect in each state (2001-2004).

Additionally, there are two types of long-term care policies that can never have rate increases: Single-pay long-term care policies and limited pay long-term care policies with corresponding rate guarantees.

Single-pay long-term care policies are paid up after just one premium payment.  You make one premium payment and your policy is paid-up forever.  You are covered by the policy for as long as you live.  Since there is only one premium payment, you can never have a rate increase.

Limited-pay long-term care policies are paid up after a fixed number of years (usually between 5 to 10 years).  If a limited-pay policy has a rate guarantee that equals the premium payment period, then the premiums are guaranteed to never go up.

Myth #5  Medicare will pay for my long-term care if I need it

Medicare covers only medical expenses.  Medicaid can pay for long-term care after assets and income have been spent down to the minimum levels required by the state.  This is the very reason to purchase long-term care insurance: to protect your assets and income for your loved ones.

To learn more, send your questions or comments to questions@LTCFacts.org.


What are the first steps in finding the right long-term-care insurance?

Conduct a simpleNext steps for long-term care insurance photo Internet search on long-term-care insurance and the results are baffling. Add the words buy or quote, and it gets even more complex. For an insurance product that already has mystery surrounding it, the sheer amount of information yielded by an Internet search makes it tempting to scrap the whole process.

But hang tight. If you’ve already determined that you have assets and income to protect from a catastrophic event, then finding accurate information is crucial to your family’s protection.

First, I recommend that you find an insurance agent who specializes in long-term-care insurance. There aren’t many of them.

Pick one who is an independent agent, someone who represents several of the top LTC insurance companies and doesn’t sell insurance from just one company. Actually, you need a LTC insurance agent who helps you design a policy that’s right for you. There are simply too many variables involved with designing the right long-term-care insurance policy that is right for your family and financial needs and your future needs and goals.

For example, recently a consumer had contacted one of our agent partners about buying LTC insurance. He and his wife had applied for a policy with a leading insurance company and he wanted to see if he could save some money. During the phone call he told the agent that they were planning on retiring in the Caribbean and planned on using their LTC policy there.

The agent explained that although the policy they had applied for was a very good policy from a top company, that policy would pay benefits for only 365 days if they were outside the United States. The agent recommended they buy a policy, for about the same premium, that could give them more than 10 years of coverage outside the United States.

Simply requesting a quote from one of the numerous Internet ads listed will not necessarily yield you contact with a specialist. The best way to find a specialist is through a referral from a friend. If you know people who have already purchased long-term-care insurance, and they liked their experience with their agent, this is probably your best source. Or, you can search the Internet for “long-term-care insurance specialist,” along with your city or region, and you might find a good agent.

After you have found a good LTC insurance specialist, your first question might be about cost and affordability. In order for the LTC insurance specialist to provide accurate quotes, you need to share some health information. It is vitally important that you share an accurate picture of your health with your LTC insurance specialist. By providing a list of current prescription medications and any related health conditions, your LTC insurance specialist will be able to choose which insurance company is most likely to approve your application with a good premium. Keep in mind that insurance underwriters will be obtaining a copy of your medical records, so withholding information from the insurance agent is not helpful.

Lately, insurance companies are moving towards enhanced Underwriting. Essentially, long-term-care insurance companies have begun to underwrite applications much like they do life insurance applications. That means a medical professional will visit your house to obtain your height, weight and blood pressure and collect blood and urine specimens.

Some recent articles state the opinion that this type of underwriting is a bad move for the long-term-care insurance industry. However, this move should bring an assurance to consumers that the underwriters are carefully managing their assets and limiting their risks. After all, insurance companies are for-profit, private companies. Having insurance is a necessity and can bring peace of mind. It’s a good thing if you never need it. Just like with auto insurance, we all have it and we all hope we never need it.

To learn more, send questions or comments to questions@LTCFacts.org.


The Truth About Long-Term Care Insurance

Long-Term Care Facts Column: article originally published by the Redlands Daily Facts May 9, 2013:

In my last column, I addressed recent articles published on a several well-known news websites have been riddled with half-truths and misleading information.  In an effort to educate the public, here are a few more corrections to the half-truths that have cropped up recently:

LTC policyholders have confronted surprise rate hikes on the order of 45% to 85%.

Some long-term care policies have guaranteed level premiums for life.  But most long-term care policies are “guaranteed renewable” which means that the insurer has a limited right to request a premium increase from each state’s insurance commissioner.  In most states the premium increase can only be approved if the insurer has incurred significantly higher claims than the insurance commissioner had originally approved for that policy.  In most states, premium increases must go towards paying claims only—not profits.  And the premium increases must be shared by all the owners of that type of policy.

Most long-term care policyholders who have had premium increases have had only 1 or 2 premium increases over a 10 to 20 year span. And most premium increases have been closer to 20%, not “45% to 85%”. I’m sure most of us wish our medical insurance had only two increases over the past 10 to 20 years.  In 2004, most states adopted “Rate Stabilization Regulations” for long-term care insurance. Most long-term care policyholders who have purchased their policies after those regulations went into effect have not had any premium increases.

Imagine buying a Lexus for $5,000 down plus $500 a month under a contract that allows the dealer to raise the monthly payment if he wants to. Six months in, it goes to $800, and you have a free choice between paying up or handing in the car and losing your down payment. That would be a ridiculous contract to sign. LTC buyers sign contracts like that.

This Lexus example could only be an accurate analogy it included all of the following requirements for the monthly payment increase:

  1. The state’s “Automobile Commissioner” regulated how much profit the Lexus dealer could make on each car,

  2. The state’s “Automobile Commissioner” had to approve any increase in the monthly payment,

  3. The increased monthly payment approved by the Commissioner had to be shared by all Lexus owners who had purchased cars from that dealer,

  4. The state’s “Automobile Commissioner” would only approve increased monthly payments after the Lexus dealer incurred higher losses and had much lower profits than the “Automobile Commissioner” had originally approved for the Lexus dealer,

  5. The “Automobile Commissioner” required the Lexus Dealer to give you the option to keep your payment at $500 but switch to a different Lexus one grade lower, and, lastly,

  6. The monthly payment increase was required in order to keep all the Lexus owners in their cars, driving safely, and the Lexus dealer in business and able to maintain all the cars and guarantee all the warranties.

Obviously, this is a silly analogy, but these points prove the tight regulations surrounding long-term care insurance.

To collect on an LTC policy, your family may have to put up a fight.

The U.S. Senate Committee on Aging commissioned the federal Dept. of Health and Human Services to conduct an audit of the top long-term care insurers’ claims practices. The federal audit reviewed both approved and denied claims from seven of the leading long-term care insurers.  These seven insurance companies are currently paying over 70% of long-term care insurance claims.  They audited EVERY denied claim for some of the insurers in the study.

Here are a few important points made in the report:

“…There is a greater probability of approving rather than denying a questionable claim.”

“…Regarding denial decisions, we found that in all cases, there was no evidence to suggest that the individual met the tax-qualified criteria for benefit eligibility in their policy.”

“…This would suggest that companies are consistently applying their clinical contract language to their claims decisions.”

In other words, the claims are being paid! The reason some claims are not paid is because the policyholder does not meet the federal guidelines for “benefit eligibility” in the policy. You can download the actual study at LTCFacts.org and seach for Federal Audit in the search box.

To learn more, send your questions or comments to questions@LTCFacts.org.

Plan Ahead For Long-Term Care

What is long-term care insurance and why do you need it?long-term care insurance couple image

A simple Google Internet search yields a definition for insurance as, “a practice by which a company provides a guarantee of compensation for a specific loss.” Therefore, long-term care insurance is a practice by which a company provides a guarantee of compensation should you ever need long-term care or assistance with bathing, dressing, eating, toileting or transferring. Long-term care includes a variety of services that may be both medically and/or non-medically necessary for people with a chronic illness or disability.

Planning for long-term care requires you to consider possible future long-term care needs and costs. It is important to plan for long-term care before you need it, and before a crisis occurs. By planning your choices now, you will have more control over your individual situation, possibly remaining independent longer. Making long-term care decisions can be very difficult, even when you plan ahead.

Although most people cannot imagine themselves ever needing help with these activities of daily living, most people can imagine their loved ones needing care. If your parents are older than 70, it probably seems possible that they might need help at some point, or you have actually seen them need care. Can you imagine your partner needing care? What are the consequences should a family member unexpectedly need daily assistance?

Now consider the other insurance products you already have in your life. Auto insurance covers losses to your personal income in the event of an auto accident or theft. Health insurance covers losses to your income in the event of illness or injury, saving you potentially hundreds of thousands of dollars over your lifetime. Life insurance helps provide for your loved ones in the event of your death, providing for a continued source of income.

As the provider for your family, you have taken steps to protect your family from catastrophic losses beyond your control.

Now, what happens if you have a major stroke or heart attack and can no longer bathe, dress or eat without assistance? What happens if your partner is involved in a catastrophic event and requires daily care? Who will provide the care and how will the care be paid for?

You may never need long-term care. Even if you make careful plans and arrangements, you may never need it. According to the U.S. Department of Health and Human Services, “This year, about nine million men and women over the age of 65 will need long-term care. By 2020, 12 million older Americans will need long-term care. Most will be cared for at home; family and friends are the sole caregivers for 70 percent of the elderly.”

Are you prepared?

Next time, I’ll address the erroneous belief that long-term care is freely covered under Medicare and Obamacare.

To learn more, send your questions or comments to questions@LTCFacts.org.

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