Are premiums guaranteed to remain level for the rest of my life?
Premiums on a long-term care policy are not guaranteed to remain level for the rest of your life. The insurance companies don't intend to raise the rates, but you have to understand about long-term care insurance. It's relatively new. It's only been around for 20 or 25 years. When long-term care insurance was first invented, the average person with Alzheimer's died in a year, once it was diagnosed. Today, Alzheimer's patients are living for up to 10 years. There are drugs that they're even saying stop the condition altogether. If a person puts in a claim for long-term care and lives and extra 10 years, and the insurance company didn't price the product properly, they have the right to raise their rate. It's not that easy for an insurance company to raise their rates on a long-term care policy. Senior citizens, who typically buy long-term care policies, are very well protected by the government. The government says, "We don't want insurance companies increasing the premiums so much that the client, the policyholder, has to cancel the insurance." It takes a while for an insurance company to ever get an approval from the state insurance commissioner to raise the rates. When people put things in perspective, they realize that it's still a good deal, and in reality, very few insurances are guaranteed level premium forever. If you own a boat, today it's $100 a year, next year it might be $150. Car insurance could go up. Health insurance goes up. Pretty much everybody understands it. Seniors, as they get older and they become relegated to a fixed income, are very sensitive to increases in premiums. The insurance companies really are trying not to raise rates. When I see a client, I tell them up front that the insurance rates are not guaranteed.
