Risk Management

Long Term Care Insurance [LTCI] as "risk management" balancing cost of premium with protecting your assets from long term care costs, and to avoid Medicaid.  

LTCI is triggered with the loss of activities of daily life, or ADLs: 
  • eating
  • bathing
  • dressing
  • and transferring
Aging and medical conditions cause ADL failure such as: 
  • multiple sclerosis
  • stroke
  • rheumatoid arthritis
  • cognitive impairment, such as Alzheimer’s disease.

LTCI premium rates are not guaranteed for your life time. In 2010 one of the major insurers  left the market; others majors raised their premiums on existing policy holders. There is no cap on premiums.

to Premium
Hikes in LTCI

Wall Street Journal article describes steps policyholders can take in response to premium hikes, including the following:

    • Drop the policy, though this can mean in effect losing the benefit of the premiums already paid.  Being older, it may be impossible to replace the policy, even at the new rates.
    • Modify the policy by lowering either the benefit amount or the length of coverage.
    • In some states, it’s possible to stop paying premiums and to have a permanent policy based on the premiums paid to date, allowing the policyholder to search for additional coverage elsewhere.
    • Seek assistance in paying the higher premiums from children or other family members who, after all, will benefit greatly by their parents being covered.