Freedom To Negotiate On Long Term Care Insurance Premiums

Freedom to Negotiate on Long Term Care Insurance Premiums

by

Merian Eksteen

Long term care insurance is difficult to sell not because people do not understand what it offers but because they dread long term care insurance premiums, thinking that the price of a potential policy could displace their finances and impoverish them in no time.

People who think this way about long term care insurance (LTCI) policies have simply not taken a single step to inquire about their options. If they have then they would know that the price of an insured individual s contract or policy is what he negotiated for. After all, LTCI policies are not like other products that you will find with price tags in a display case.

All LTCI policies are personalized and tailor-made for individual sets of long term care (LTC) requirements. Each applicant s age, present health condition and family s health history, preferred LTC setting, area of residence, and budget are all taken into account by an insurance company so that it can compute accurately the annual premium of the buyer.

Younger buyers have an edge over the older ones because they are naturally healthier and have a lower risk of requiring care anytime soon. Buying a policy while you re young promises so many benefits and among these are the following:

Lower premium for coverage

Eligibility for good health discount, spousal discount, etc.

Value of total benefits is higher

Tax incentives

Financial freedom

Peace of mind

Rise of Long Term Care Insurance Premiums

Another reason many Americans refuse to purchase an LTCI policy despite their awareness of what it can do for them is the fear of dealing with premium hike.

Last year, some LTCI carriers increased the premium rates of their existing policyholders up to 40%. According to uninsured residents if companies would do this on a regular basis there might come a time when they could no longer afford the premium of their coverage so they would just give up their policies and treat all the money that they have invested into it as a loss.

Although it s true that LTCI carriers reserve the right to increase the premium rates of a class of existing LTCI policies, they have to get approval from the state first before they can impose an increase. The state bureau of insurance will analyze rigorously the reasons and objectives of an LTCI company for requiring a premium hike. If these objectives turn out to be reasonable and the state approves the company s proposal for premium hike, the latter is expected to notify its clients in writing of the schedule of premium increase.

Insurance companies that sell LTCI policies have different reasons for increasing the premium rates of their existing policies but the most common are the following:

Policies were priced too low at the time of purchase

Premiums received are not enough to address claims for benefits

Few policyholders dropped their policies contrary to what the company had expected

With these reasons in mind, people should be more careful when negotiating their long term care insurance premiums. If your policy seems to be too cheap to be true, conduct further investigation. Meanwhile, if it s too high perhaps you can discuss a remedy with your LTCI specialist.

Merian Eksteen is a writer specializing in personal finance. You may visit

longtermcareicare.wordpress.com

for more tips on planning for

long term care

and preparing for

long term care plan

Article Source:

ArticleRich.com