These alterations reflect the desire of insurers to tighten their belts.
As the American population gets older, the long term care insurance industry is facing a number of struggles in terms of the expenses that it is facing.
Some insurers have withdrawn from that sector altogether.
Other long term care insurance companies have been holding off on the sales of the policies that offer the most generous benefits, while they cinch their underwriting efforts. Almost all of them are increasing the premiums that are paid on the policies that already exist.
Consumers are now paying more for long term care insurance and they’re getting less.
The long term care insurance industry has changed, as a whole, and in order to qualify for the lowest premiums, the health requirements are tougher than they’ve ever been. These alterations are occurring as insurers struggle to deal with the massive losses that they’re facing on their older policies. Many insurers have now discovered that the rates that had been set on those older policies were calculated based on erroneous assumptions.
Their long term care insurance policyholders have been making their claims at younger ages than expected, and are living far longer than anticipated. At the same time, there is a surprisingly small number of consumers that are allowing their policies to lapse, which means that there is a much greater chance that policyholders will actually make a claim; far greater than had been expected by the insurers who sold the policies.
When combined with interest rates that are remaining at historical lows, insurers are facing tremendous financial challenges and are taking action to protect themselves against greater struggle. These efforts include the following:
• Backing out of the long term care insurance industry altogether
• Sharp increases in premiums
• New policies no longer offer lifetime or unlimited benefits
• More expensive or less protection for inflation
• The disappearance of limited pay policies
• Stricter qualification regulations for coverage
• More expensive coverage.
These changes have notably altered the face of the long term care insurance sector, and only time will tell how they continue to progress into the future.