A Long Term Care Insurance provider recently applied for rate increases in the state of Connecticut.
Two divisions of Unum are seeking premium hikes for certain Long Term Care Insurance policies. Provident Life and Accident Company is one of them. They are asking for an increase of 65% of certain policies sold within the state between 2003 and 2009. The rate hike will apply to 260 individual policies.
Like many other companies, Unum and its subsidiaries have been faced with the increasing cost of health care, paired with the higher than expected claims rates.
Many Long Term Care Insurance providers have been forced to raise rates to keep pace with these high claim rates. The number of policyholders who let their policies lapse has been significantly lower than originally anticipated.
Value of Policies
Once people have Long Term Care Insurance, they usually recognize the immense value that it holds and do their absolute best to hold onto it for as long as possible. Even when providers end up raising rates, very few policyholders actually drop their policies due to the increased costs. Most end up reducing their benefits, instead, so they still have some type of coverage for the future.
Unum says that even if state regulators approve these new rate increases, the projected lifetime loss ratio for the policies will still be 118%.
The second division of Unum that is looking to raise rates is UNUM Life Insurance Company of America. This unit is asking state regulators for an average premium increase of 45% for 2,217 group Long Term Care Insurance policies. The increase will apply to products that were sold throughout the state of Connecticut between 1989 and 2004.
Though many Long Term Care Insurance companies have raised their rates recently to deal with the rising financial obstacles like the low interest rate environment and high claims rate, it is still very possible to find an affordable policy if you are looking to buy. It’s always crucial to compare a number of Long Term Care Insurance providers before you decide on any one company.
At LTC Tree, we shop the market for our clients and provide a no-cost comparison of the top Long Term Care Insurance companies, including a history of their rate increases and their financial ratings. Rates can vary widely from company to company, so looking at 5 or 6 different options before you choose a policy is paramount to getting a good price. If you are interested in learning more about Long Term Care Insurance, click here.
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