How to Deal With Long-Term-Care Insurance Rate Hikes

We help you navigate the maze of choices to get the best deal.

Kimberly Lankford's avatar
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Most major long-term-care insurers have raised rates for policy­holders in the past few years -- some­times by as much as 90% -- primarily for policies sold more than five years ago. Genworth is asking state regulators for permission to raise rates for some policies sold from 2001 to 2012.

Keep the policy, if at all possible. If you drop it, you’ll lose the coverage you’ve paid for all the years you’ve had the policy. If you can’t afford the higher premiums, you have a couple of options:

Shorten the benefit period to three or five years. Most people don’t need benefits for more than three years.

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Reduce the inflation protection from 5% to about 3%. But calculate how much that will affect your total pool of benefits by the time you’re likely to need care, and make sure you aren’t giving up benefits you’ve already accumulated.

Kimberly Lankford
Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.