Regulators in the state have given permission for the increase to stand, frustrating some consumers.
The Texas Department of Insurance is taking fierce criticism from two families regarding the 75 percent increase that was allowed to stand for premiums being paid for long term care insurance coverage in the state.
The question that they has raised is whether the department is on the side of the customer or the insurance industry.
They have also asked about the true power of the agency and whether it actually has the power to stop rising long term care insurance costs from occurring. This has come about following a 75 percent rate increase that was allowed by the Texas department, when compared to other states, where increases have been closer to 20 to 25 percent for Allianz Life Insurance Co. of North America.
The long term care insurance increase request was approved with an understanding that later increases would not be requested.
That said, in the states that gave their approval for smaller increases for LTC insurance, there is still the possibility that Allianz could make further filings to raise rates even further. If that should occur, it would give policyholders the opportunity to maintain their current premiums without experiencing the increase, or they could pay a premium that is reduced. Either one of those options would result in lowered benefits. It would be entirely up to the policyholders whether they would choose to go with the higher rates or pay less but receive less, as well.
This sector of the insurance industry has been struggling for some time. Many companies are simply backing out of it, altogether. The initial predictions that were made a few decades ago regarding the amount that premiums should cost were entirely wrong. Now members of the industry are finding that the premiums have been too low, and that those payments are not adequate to compensate for the size of the claims.
Those insurers that are still offering long term care insurance are talking to state regulators, as they have been under pressure to find a way to gain improved support for these policies which are now underfunded.
We can’t deny that long-term care insurance premiums will continue to rise so thasat insurance companies can keep up with the increasing cost of care as well. However, a 70% increase is very alarming and policy holders may not be able to cope up with the large rate increase, as a result,they may end up cancelling their policies.
There are several factors that affects long-term care insurance rate as explained and as we are all aware of, one of the major factors that affect it is age, so getting or buying it early will help you spend less since the increase in premium is still based on the age when you bought your policy and not your current age. Age is also the basis of being healthy for some cases. So don’t wait too long, if you have the funds, then you should get one while you are still young and healthy.