Key Takeaways
- Read the increase notice and ask the insurer for each available option in writing before changing the policy.
- A lower premium can mean less protection. Compare benefit limits, inflation protection, waiting periods and future costs together.
- Check the policy and your state’s rules. Do not assume you can replace or restore surrendered coverage on the same terms.
A long-term care insurance premium increase creates two connected questions: can the household sustain the new cost, and what protection would be lost by choosing a cheaper option? Start with the notice and contract rather than a rule that everyone should accept, freeze or cancel at a particular age.
Gather the notice and current policy details
Record the existing premium, proposed premium, effective date and response deadline. Confirm whether the notice describes a single increase or a sequence of scheduled changes. Ask what happens if you make no selection, miss the deadline or pay only the old amount.
Find the current benefit schedule, riders and any prior changes. List the daily or monthly benefit, total benefit pool or benefit period, covered care settings, eligibility conditions, elimination period and inflation protection. An old sales illustration may differ from the coverage in force today.
Request a written comparison of the available options
The Washington insurance regulator describes several possible responses to rate increases, including reducing daily benefits, shortening the benefit period, extending the elimination period or reducing optional inflation protection. It also describes a contingent nonforfeiture option that can preserve limited benefits without further premiums.
Those are examples from a state regulator, not a promise that every policyholder in every state has the same choices. Ask your insurer which options apply to the actual contract, what each costs and which changes can or cannot be reversed. Contact your state’s insurance department if an option or notice is unclear.
Compare what each premium buys
Use one row for each written offer and compare:
- Premium: the amount due now and any stated future changes.
- Benefit amount: the maximum payable per day or month and the total available protection.
- Benefit duration: how the policy limits the period or pool available for care.
- Waiting period: what must happen before benefits begin and which costs you would fund in the meantime.
- Inflation protection: what continues to increase, what stops increasing and the effect on future benefits.
- Other conditions: covered services, claim eligibility and any paid-up or nonforfeiture limits.
Reducing inflation protection does not freeze future care prices. A longer waiting period can leave the household paying for more care before insurance contributes. A smaller daily benefit can increase the gap between the bill and the amount the insurer pays. Compare that exposure with resources you could actually use.
Test the cost against the household budget
Separate the extra premium from current bills, emergency savings and other care commitments. Consider whether the new amount remains manageable over time rather than only for the next payment. If family members may help, discuss the amount and duration of that support before counting it as available.
The NAIC recommends checking local care costs and comparing benefits, limits and premiums. Its guidance also distinguishes long-term daily care from Medicare’s limited coverage for some nursing-facility stays. Do not assume ordinary health coverage will fill every gap left by reducing a long-term care policy.
Check the consequences before cancelling or replacing
Ask what coverage would remain if you stopped paying, whether a reduced paid-up option is available and how its limits are calculated. Do not confuse limited paid-up protection with the original full policy.
If considering replacement, ask about eligibility, underwriting, exclusions, waiting periods, benefit differences and total cost. Do not cancel an existing contract based only on an advertised premium or an assumption that the same coverage can be bought again. Get the actual terms and, where needed, independent advice from a qualified professional familiar with your state.
Keep the decision and confirmation together
Before the deadline, confirm the selected option through the insurer’s verified process and request written acknowledgment of the resulting premium and benefits. Keep the notice, comparison, correspondence and updated schedule with the policy records.
The aim is a documented choice between real options. Neither a large increase nor an older age makes one response correct for every household.
