Why Long Term Care Insurance Premiums Increase
LTC premiums are intended to be level but are not guaranteed. Insurers can raise rates on an entire class of policies — never on you individually — with state regulator approval, and older policy generations saw large increases because early pricing badly underestimated claims, lapse rates, and low interest rates.
Why the increases happened
Policies priced in the 1980s–2000s assumed more people would drop coverage (almost no one did), shorter claims, and higher interest earnings on reserves. All three assumptions failed, and regulators approved successive class-wide increases — sometimes cumulative 50–100%+ on the oldest blocks. Today's policies are priced with those lessons and far more conservative assumptions, and regulators apply stricter rate-stability rules; increases remain possible but the starting math is more honest.
Your options when a rate letter arrives
- Pay the new premium — often still far cheaper than replacing coverage at your current age and health
- Reduce benefits instead — trim the inflation rider going forward, shorten the benefit period, or extend the elimination period to hold your premium roughly flat
- Contingent nonforfeiture — on large increases, regulations commonly let you stop paying and keep a paid-up policy with benefits equal to premiums already paid
- Never lapse in anger — walking away after decades of premiums surrenders everything; the reduced-benefit route almost always beats it
Do not replace an old policy without specialist review. Even increased, a pre-2010 policy's benefits often can't be repurchased at any price today. Compare the increased premium against a genuinely equivalent new quote — not a stripped-down one — before dropping anything (see comparison checklist).
Buying today with increases in mind
Check each carrier's in-force rate-increase history when gathering quotes, budget premiums with headroom rather than at your limit, and consider hybrid policies, most of which contractually guarantee premiums.
Frequently asked questions
Can my long term care insurance company raise my premium?
Will new long term care policies see the same huge increases?
What is contingent nonforfeiture?
Do hybrid policies have rate increases?
Ready for real numbers? Premiums vary widely by age, health, and state. Comparing personalized quotes from multiple carriers is the only way to know what you'd actually pay.
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