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.

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.

What if the company stops selling the 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.