This could mean that consumers – particularly women – will be paying considerably higher premiums.
According to the latest information from New Jersey, it appears that consumers should start to prepare themselves for some considerably higher long term care insurance premiums before the second half of this year.
This will be especially true for women, who could also find their policy provisions more restrictive.
Consumers are also being cautioned that this could happen at any time without any warning. The long term care insurance industry is blaming the historically low interest rates, which is increasing the pressure to insurers to raise their prices in order to be able to cover the rising cost of the claims that are being made on the existing policies.
Without investment returns, long term care insurance companies are relying on premiums more than ever.
For instance, this month, Genworth Financial announced that it would be increasing its long term care insurance premiums for women. They aren’t alone. Other insurers have revealed that they intend to do the same in the near future.
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Women, in particular, are seen as a greater risk and a more expensive policyholder for long term care insurance companies, simply because their average life spans are typically longer than that of men. Often, they are also the primary caregiver for their spouses, so men may have the assistance they need, but when women need help with their everyday life needs – such as grooming, eating, dressing, etc. – they must often rely on their policies.
A long term care insurance policy is seen as a very important safety net for women in case they should become incapacitated or ill. Any increases in premiums will impact women more than it will men. This is expected to prove somewhat harmful to the appeal of the coverage. Though it has been increasingly popular since it was first created in the mid 1980s, the rates have steadily risen since that time and the provisions have become increasingly limited. A number of carriers have stopped selling the policies completely.
The concern is that long term care insurance will continue in this direction as it becomes less affordable and less appealing for consumers who are already tightening their belts and may be unwilling to pay the high amounts for the lower coverage.