How much and when can long-term care insurance premiums be increased?

How much (and when) can long-term care insurance premiums be increased?

It depends upon the type of the policy you buy.

There are two types of long-term care policies that can never have a rate increase:

  1. Single-pay long-term care policies and
  2. Limited pay long-term care policies with corresponding rate guarantees.

Single-pay long-term care policies are paid up after just one premium payment.  You make one premium payment and your policy is paid-up forever.  You are covered by the policy for as long as you live.  Since there is only one premium payment, you can never have a rate increase.

Limited-pay long-term care policies are paid up after a fixed number of years (usually between 5 to 10 years).  If a limited-pay policy has a rate guarantee that equals the premium payment period, then the premiums are guaranteed to never go up.

For example, a 60-year old may decide to purchase a policy that is paid up at age 65 and has a 5-year rate guarantee.  Since the premiums are guaranteed not to increase during the premium payment period, the premiums can never go up.

Another example is a 10-pay policy that has a 10-year rate guarantee:
A 10-pay policy is a policy that is paid up after 10 years of premium payments.  Some long-term care policies have a 10-year rate guarantee (some don’t.)  But, if your policy has a 10-year rate guarantee, and it is a 10-pay policy, then your premium is guaranteed to never increase.  After you’ve paid premiums for 10 years, your policy is paid up, you never have to pay another premium, and your policy is in-force for the rest of your life.

“Standard pay” long-term care policies are policies with premiums payable until you pass away (or until you begin to receive benefits from the policy  and the premiums are waived).  The premiums for “standard pay” policies can be increased.

Regardless of which insurer you buy a policy from, when buying a “standard pay” long-term care policy, you have to sign a form stating that you realize that the premium can be increased.  EVERY long-term care insurance application for a “standard pay” policy has a section that asks, “Have you considered whether you could afford to keep this policy if the premiums went up, for example, by 20%?”

In most states, rate increases on long-term care insurance policies cannot be implemented without approval by the state’s regulators.  Some states have very strict requirements that must be met in order for a rate increase to be implemented.  Some states have stricter requirements than others.

If your long-term care insurance policy does have a rate increase, in most cases, you have the option to keep your premium the same by decreasing your benefits.

About Scott A. Olson

Scott A. Olson, is the author of “The Guidebook for Making Long-Term Care Insurance Easier.” He is a licensed insurance agent and has specialized in long-term care insurance since 1995. He is licensed to sell long-term care insurance in over 40 states. Scott was born and raised in New Jersey and attended Rutgers University. Scott was a caregiver for a close relative for two years. That personal experience has made him acutely aware of how to help his clients design and choose a long-term care policy that will benefit them when they need it the most. Scott and his wife Carolyn live in Redlands, California. Scott and Carolyn have four sons.

6 comments on “How much and when can long-term care insurance premiums be increased?

  1. Scott,

    Loved your comments on the Smart Money article in early November. People like DKP50 think they have it all figured out, but fail to realize that life is unpredictable. Of course his strategy would work if everyone didn’t need care until they were in their mid 80’s. It is pretty funny how people will insure automobiles and homes before insuring health and income. I have a couple of personal stories that back your side of the story. Our neighbor who was a farmer didn’t believe in any type of insurance besides property and crop insurance. He ended up needing LTC in his early 60s and spent over 10 years there, burning up all of his assets, including his farmland. His son’s dreams of inheriting the farm were gone. My dad was looking at LTC Insurance in his late 40s and recieved a lot of critisism from my uncle who also farms with him, my dad did end up buying it. When he was 52 he suffered from a heart attack and when he was 54 was diagnosed with MS. If he wouldn’t have bought it then he would be uninsurable and in reality looking at a lot of time in a nursing home. Which would leave me and my family with a huge financial burden or be forced to lose the land we’ve owned for over 100 years. I’m just glad my dad had a better relationship with his agent then he did with my uncle!

  2. Tyler,

    Thank you for sharing your experiences with my readers.


  3. During the application process 12 years ago, for whatever reason, we checked a box that guaranteed full policy payment should one of the couple die and the other continues payment for 5 years–Well- my wife died of colangio carcinoma (cancer of the bile duct) in 2005 so last Feb. I got a letter from my Company that for the rest of my life the policy is paid in full.. Nice deal– so as you fill out your application, look for the box ’cause you never know…

    • Don,

      Thanks for sharing your experience. What you’ve referred to is called a “survivorship benefit” (a.k.a. “survivorship rider”).

      It’s a benefit that gives the surviving spouse a “paid up policy” after “X” number of years.

      The obvious advantage to this feature is that since the surviving spouse’s policy is “paid up”, the surviving spouse is insulated from any future premium increases the insurer may request on that policy series.

      Each policy is a little different in how it defines the “survivorship benefit”. Some will waive the surviving spouse’s premium after 7 years. Others will waive the surviving spouse’s premium after 10 years. Some of the older policies waived it after 5 years.

      Thanks again for sharing your experience.


  4. my policy cost went up 45% last month. that is after an increase a couple of years ago. in the company letter that told me about the 45% increase, they mentioned that the cost would go up again in a couple of years. the increase in cost in my case is dictated by the decision of the insurance commission in the state where i purchased the policy, even tho i do not live in that state. i contacted the insurance commission in the state where i live and they told me that they approved a 29% increase, which is still pretty high but not as high as the 45% increase. health insurance should not be run by a for-profit company.

    • Lucian,

      Thank you for taking the time to share your experience. There are very few LTCi policies that have had a premium increase as high as you’ve stated. I would be curious to know which insurance company you purchased your policy from.

      It is very important to purchase a long-term care policy from a highly rated insurance company.

      Policies are regulated by the insurance commissioner in the state in which the policy was purchased. If a client of mine has a residence in two different states, I usually recommend that they buy the policy in the state which has the best consumer protection regulations for long-term care insurance.


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