When it comes to retirement planning, you’ve got everything covered.  Smart investments, check.  401k or pension, check.  Insurance policies squared away, check.  You’re even one of the savvy Americans who’ve already purchased a Long Term Care Insurance plan to make sure you’ll be able to cover your long-term care needs in retirement.  But, suddenly, you are informed that your Long Term Care Insurance rates are going to be increased.  You become worried about whether you can keep up with the payments or, more practically, whether paying Long Term Care Insurance ratesk is even a smart investment of your hard-earned money.  What should you do?

Don’t drop your policy

Financial planning experts agree, it is almost never a good idea to drop your policy simply because your Long Term Care Insurance rates have gone up.  You’re still getting a better deal having purchased your policy previously and should consider the high risk of being caught without this critical form of insurance.  Long-term care is expensive with national averages for nursing home stays running upwards of $80k to $90k per year.  And, those are just averages.

Being caught without Long Term Care Insurance can mean financial ruin including spending down your savings and assets to qualify for Medicaid and losing all you’ve worked so hard to achieve in your working live.  So, you don’t want to let your policy go, if at all costs.  The stakes are just too high and your future, retirement years, which you should be planning to spend pursuing hobbies and spending time with your family, are on the line.

You might not have to pay the higher rates

If you find out from your insurer that your rates are going up, don’t panic.  There are options you can pursue to avoid paying the higher rates.  You can often do the following:

• Lessen the benefit period
• Lessen the amount of the daily benefit
• Extend the waiting period
• Lower the inflation protection.

Do your math first, though.  Calculate how much you’ve accumulated on your policy so far.  Think about how much you might be able to cover out-of-pocket.  Don’t cheat yourself too much as a decision like lowering the inflation protection percentage from 5% to 3% can mean the difference in the value doubling in 15 years versus 25 years which can make a huge difference in the future and might not be worth avoiding those higher Long Term Care Insurance rates.

Keep in mind that if you have had the 5% Compound Inflation Protection option your benefits probably have increased.  In some cases maybe they have doubled or even tripled.  The point is, even if your premiums go up a bit the amount of protection and purchasing power in your policy will be at least ten to one to benefits to premiums you will pay.

Whatever you decide to do, consult an expert.  At LTC Tree, we have a proven track record in long-term care and are the largest virtual Long Term Care Insurance brokerage in the country.  We can advise you on dealing with Long Term Care Insurance rate increases.  And, if you don’t yet have a Long Term Care Insurance plan, simply fill out our form below.