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Follow on Google News | Long Term Care Insurance Rate Hikes Explained By Industry LeaderLong term care insurance costs have been rising and several insurers have filed for rate increases causing concern among consumer groups and policyholders. A leading industry executive explains why rates have increased.
“No one likes to pay more so concern is understandable,” To address the issue, the industry executive has been speaking with reporters, consumer representatives and making available association staff to discuss the matter with consumers. Slome appeared today on Martha Stewart’s radio network to explain what’s taking place. “Historic low interest rates are the primary culprit and the Federal Reserve has indicated it plans to keep rates this low for the foreseeable future,” Slome notes. For every one-half percent drop in interest rates, a long term care insurance http://www.aaltci.org/ Regarding the need for rate increases on existing long term care insurance policies, Slome explains it is never a take it or leave it proposition for the consumer. Insurers always offer an option by which the policyholder can continue to pay the same amount. The Association executive points to a recent request for rate hike from a leading insurer. Policies affected are those offering a five percent automatic compound or simple inflation coverage, where benefits automatically increase by five percent each year for the life of the policy. “The company offers an option to reduce their future inflation percentage which allows people to avoid the rate increase altogether,” This is a prospective reduction in inflation; so all inflation additions previously applied to the policy will remain in place. “There is no reduction of their current benefit level,” Slome points out. “Only future inflation increases would be at a rate lower and the new inflation percentage offered as an option to customers will be in the range of 2.7% to 3.9%.” Slome advises consumers with long term care insurance policies to speak with their agent regarding their concerns. “The protection is still incredibly important for people to have and valuable to those who need it,” Slome points out. “Last year, insurers paid over $6 billion in benefits to some 200,000 individuals who own long term care insurance. The largest open claim has surpassed $1.5 million and the policyholder paid less than $2,500 for their protection.” # # # The American Association for Long-Term Care Insurance http://www.aaltci.org is a trade organization. The Association's Consumer Information Center is the #1 source for information and can be accessed at http://www.aaltci.org/ End
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