Comparing Premiums for LTC Insurance
How much does it cost?
Only an insurance company can tell you the exact cost based on your individual age, health benefit choices and premium choices with any premium discounts that may apply.
The Department’s portal provides some examples of the annual cost of individual long term care insurance policies being offered in New York State based on certain variable criteria:
Here is an example of the type of information that is available.
At age 55, an individual non-Partnership policy offering two years of coverage, a 100-day elimination period, at a benefit level of $200 per day for Nursing Home, Assisted Living, and Home Care, five different policies are offered by three companies and the premiums range from $720 to $1,268 per year without inflation protection and from $1,723 to $3,063 per year with inflation protection.
For the same policy purchased at age 65, the premiums range from $1,581 to $2,767 per year without inflation protection and from $2,874 to $5,049 per year with inflation protection.
This comparison clearly illustrates how waiting to purchase long term care insurance impacts the cost.
The sample premiums are based upon a limited number of criteria. Many factors are considered in the pricing of a Long Term Care policy including, but not limited to, the daily benefit amount(s), benefit period, elimination period, level of inflation protection, age of the applicant, health of the applicant, and any premium discount that may apply.
Any additional or innovative benefits purchased with a policy will most likely add to the cost. The policies that you may be interested in may offer options that our website is not able to consider. You are encouraged to use our website and take the information that you receive from this interactive site and use it as the basis of a discussion with an insurance agent.
Can the premium increase?
Both initial premiums and premium increases on open or closed blocks of business must be approved by the Department. When a premium is approved for a new long term care insurance policy, it is expected to remain stable throughout the life of a policy. Typically, insureds make the same payment annually for the amount of time required by the policy (usually lifetime or 10 years), which is known as a level premium. Level premium does not mean that the premium cannot increase. A company may seek the Department’s approval of a premium change on a class basis. A premium increase on a class basis means that a person cannot be singled out for their own premium increase (for example, as you age or if you become ill). An increase could be approved for all persons who have a particular policy if something changed significantly with respect to the original assumptions made for that policy.
For a number of reasons, an insurer may decide to stop selling a certain policy to new applicants (also known as "closing a block of business"). Existing insureds are allowed to remain on the policy.
Since new, healthy people are not being added to the policy, some consumers are concerned that this will result in a premium increase. When the Department approves the initial premium of the policy, the policy must be shown to be self-supporting. This means increases should be unnecessary through the life of the insured pool provided the assumptions in the original pricing are correct. Insurers may still request approval of a premium rate increase on a closed block of business due to unanticipated factors arising after the original pricing.