Terry, last year you wrote about the LTHC scam: http://www.suntimes.com/…/how-is-a-90-long-term-care…
Anything new on this front? My wife & I have been paying MetLife premiums for 10 years and now they raised the premiums by 102%.
Terry Says: Well, it’s horrible that prices of LTC insurance policies have taken a huge jump — but it’s not a scam. It’s just a very graphic demonstration of a HUGE error that most LTC insurers made when they created their premiums. They miscalculated the USAGE of those policies, the fact that people wouldn’t drop them, would live longer and would actually use the benefits — unlike the life insurance tables on which they based their pricing. I wrote a series on that two years ago when it first started happening.
While most policies were sold with the “assumption” that premiums would stay level (so buy when you’re young) t was always written in the fine print that they could raise prices for the “entire group” of policyholders. They just couldn’t pick you out to raise prices because of your health situation, for example. The good news is that after this one-time jump in premiums on most policies, future increases should be small. Now they are “caught up” with their mistake.
DONT CANCEL THAT POLICY! There may be some options to take a shorter period of care, or a lower inflation adjustment — in order to mitigate the jump in premiums. Look over those options carefully. Contact your original agent, or call Maga LTC at 800-533-6242 for a policy review. But you probably couldn’t qualify for a new policy now, and if you do it would be just as expensive. And even a small amount of coverage is better than none, because it will buy your way into a better care facility should you need it — leaving your own money for your spouse to live on.
Really, this is a shock — but you must deal with it rationally.