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Coping with rising premiums for long-term-care insurance

There are options for policy holders who see

There are options for policy holders who see an increase in longterm care premiums. Photo Credit: Getty Images/Rowan Jordan

You did the right thing to protect yourself: You bought long-term-care insurance.

Then just when you’re feeling secure, your premium increases significantly.

This is no make-believe scenario. “Recently, carriers have notified policy holders of increases of 60 to 80 percent," says James Ciprich, a certified financial planner with RegentAtlantic Capital in Morristown, New Jersey. "Additionally, they are seeking more increases with the state departments of insurance in excess of 100 percent over the next several years,” he adds.

If you want the comfort of coverage, but you can’t afford it after the premium hikes, what can you do?

Explore hybrid policies

“Many insurers have hybrid policies when it comes to long-term care. For example, some have clauses that allow people to have an income stream or allow them to access their death benefits if they don’t ever need to use their long-term care,” says Ande  Frazier, a certified financial planner with myWorth in Baldwin Harbor.

Make adjustments

“Start by looking to see if there is room to adjust the daily benefit lower, if it makes sense to you,” says Ciprich.  

Think twice about tweaking the benefit's time period, though. Review the elimination period, or the amount of time the policy holder has to wait/“self-insure” after submitting a claim.  “Perhaps you can extend a 30-day wait to 90 or 120 days in order to manage the proposed increase,” he says.  

Talk to your kids

If you're comfortable with it, share your difficulties with them and see if they can help subsidize the premiums. Says Ciprich, “Ultimately, it would be better than having the policy lapse and them having to figure out a way to pay for long-term-care expenses” for their parent.

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