As I have been telling my clients for years, the risk with long-term care insurance, particularly the older policies, is that the premiums are rarely fixed and could be raised substantially right about the time that the policy holder needs the insurance. More serious is the possibility that the insurance company could go out of business altogether.
In The New York Times Saturday edition, Ann Carrns has written an excellent overview of the situation today with these policies and the fact that the companies are raising their premiums, particularly on the older policies. Indeed, a spokesman for Genworth is quoted as saying that policies issued before 2002 were issued with premiums that were not set high enough. Indeed, the article quotes the spokesman as saying that “The company needs premium increases of 50 percent, on average, for the older policies to break even.”
That is a very troubling state of affairs. The author poses several questions with answers for those with these types of policies, all of which you can read here: