For decades, long-term care insurance has been one of the linchpins of retirement planning. It’s never been cheap. But the cost of LTC insurance is trending much higher with no apparent end in sight.
The latest announcement comes from Genworth Financial Inc., the largest long-term care insurer by number of policyholders covered. Genworth president and CEO Thomas McInerney told the company’s most recent quarterly earnings meeting that Genworth received approval from state regulators to raise premiums an average of 58% on $160 million of in-force premiums in the second quarter of 2018. Genworth had already raised rates on $72 million of in-force premiums in the first quarter, hiked premiums by 28% on $714 million of existing business in 2017, and raised rates by 28% on $719 million of in-force premiums in 2016.
But Genworth is not the only LTC insurer feeling the pinch of increasing claims and increasing costs. Other companies pursuing rate increases include Massachusetts Mutual Life Insurance Company, Prudential Financial, Unum Group, and CNO Financial. Some companies like John Hancock have even gotten out of the LTC business.
Genworth set up a website to explain why premiums are going up. The short answer is that people are living longer, holding on to their LTC policies longer, which means more claims in a world of skyrocketing medical costs.
Round and round it goes and where it stops, nobody knows!