State Farm Mutual Automobile Insurance Company recently filed for a substantial increase in rates for their Long Term Care Insurance policies in both Connecticut and Pennsylvania.
Rate revision requests were filed in mid-March for State Farm Long Term Care Insurance policies in Pennsylvania and at the end of April for policies in Connecticut.
Substantial Increase in Rates
The current average premium for State Farm Long Term Care Insurance policies has been around $1200/year in Connecticut and $1800/year in Pennsylvania.
State Farm is requesting an average rate increase of 38%, citing their reasoning for the increase as the lower than expected mortality rate and higher than expected claims rate. The premium hikes would equal about $450 in increased payments in Connecticut and close to $700 in Pennsylvania.
State Farm stated that “in an effort to mitigate the impact of any potential increase it will offer its policyholders the option of reducing benefits, removing optional riders or other similar options.”
State Farm Long Term Care Insurance Plans
According to the Connecticut rate increase filing, the 48 different State Farm Long Term Care Insurance policies were sold across the state between March 2000 and December 2002. Those plans are no longer available in Connecticut. The plans in Pennsylvania were sold from 1998 to 2001.
The company released a statement about its recent requests for rate hikes and their view on the Long Term Care Insurance industry: “Although it has challenges, we frequently review and refine our business model with the intention of continuing to offer this coverage,” the company said. “The entire industry has been challenged by significant spikes in care costs and the volume of consumers beginning to use their benefits. State Farm intends to continue to offer long-term care insurance as long as the marketplace and the regulatory environment allow.”
If the State Insurance Departments approve the requests, new rates will take effect September 1, 2013.
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Rates vary from state to state.
Get the latest information on LTCI in Connecticut here.
Get the latest information on LTCI in Pennsylvania here.
Have questions about Long Term Care Insurance? Read more here.
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