Obama, Clinton Spotlight Long Term Care Insurance Industry
- Date: 2007-06-14 - Word Count: 487
Share This!
In April 2007, Senators Barack Obama and Hillary Clinton requested that our Government Accountability Office examine the long term care insurance industry's track-record for claims, premium increases and those increases' relation to LTCi policy lapses. Will they find dirt under the rug?
Well, I'll give you the answer!
If you look at the long term care insurance industry's claims pay-outs, you'd be encouraged. Claim denials are extremely low compared to other types of insurance - and LTCi companies pay a LOT of claims" - $3.3 billion in 2006 alone. The largest claim as of Dec. 2006 was over $875,000!!! (Can you imagine paying that out of your pocket?) So, kudos for long term care insurance.
However, there are some LTCi companies that have given the entire industry a bad name, as well as giving consumers reason to pause. Companies that have sold inexpensive policies with lots of bells and whistles have felt the need to either sell off their long term care insurance business, ask for rate increases on existing policy holders or even deny or delay claims. "Low-balling" on what should have been "expensive" policies was definitely poor planning by those companies Some folks might even look at it as some type of fraud.
Some of the same companies had slack underwriting and would accept people who were higher risk, health-wise. This business strategy was a disaster waiting to happen.
Another issue has been one of rate increases. Some companies have increased rates on their policies, especially policies with unlimited lifetime benefits. Since a company has to put aside a million dollars for every unlimited lifetime policy, and since the price of long term care itself is inflating at over 6% per year, most companies who charged reasonable rates for these policies have had to ask for rate increases.
It seems that the LTCi players that are left on the field are being very careful these days. Long term care insurance now has enough "claimshistory" that actuaries can figure out what companies truly need to charge for each product. Most companies have tightened up their underwriting and some are not selling unlimited lifetime policies any longer. The ones that do charge hefty premiums.
All these factors are helping to strengthen and revivify the LTCi industry and to promote trust within consumers. Let's hope that this trust is warranted and that these improved policies will not suffer from rate increases in the future!
There's no doubt in my mind that any investigation into the LTCi industry will turn up some companies that had less than desirable claims pay-out and rate increase records in the past. Even so, I think that an investigation will find that the LTCi industry as a whole is one of the best in the insurance arena for paying claims. As far as raising premium rates goes, since LTCi companies cannot increase rates unless approved by a state's Dept of Insurance, perhaps states' DOI should not grant as many rate increases?
... Just a thought!
Well, I'll give you the answer!
If you look at the long term care insurance industry's claims pay-outs, you'd be encouraged. Claim denials are extremely low compared to other types of insurance - and LTCi companies pay a LOT of claims" - $3.3 billion in 2006 alone. The largest claim as of Dec. 2006 was over $875,000!!! (Can you imagine paying that out of your pocket?) So, kudos for long term care insurance.
However, there are some LTCi companies that have given the entire industry a bad name, as well as giving consumers reason to pause. Companies that have sold inexpensive policies with lots of bells and whistles have felt the need to either sell off their long term care insurance business, ask for rate increases on existing policy holders or even deny or delay claims. "Low-balling" on what should have been "expensive" policies was definitely poor planning by those companies Some folks might even look at it as some type of fraud.
Some of the same companies had slack underwriting and would accept people who were higher risk, health-wise. This business strategy was a disaster waiting to happen.
Another issue has been one of rate increases. Some companies have increased rates on their policies, especially policies with unlimited lifetime benefits. Since a company has to put aside a million dollars for every unlimited lifetime policy, and since the price of long term care itself is inflating at over 6% per year, most companies who charged reasonable rates for these policies have had to ask for rate increases.
It seems that the LTCi players that are left on the field are being very careful these days. Long term care insurance now has enough "claimshistory" that actuaries can figure out what companies truly need to charge for each product. Most companies have tightened up their underwriting and some are not selling unlimited lifetime policies any longer. The ones that do charge hefty premiums.
All these factors are helping to strengthen and revivify the LTCi industry and to promote trust within consumers. Let's hope that this trust is warranted and that these improved policies will not suffer from rate increases in the future!
There's no doubt in my mind that any investigation into the LTCi industry will turn up some companies that had less than desirable claims pay-out and rate increase records in the past. Even so, I think that an investigation will find that the LTCi industry as a whole is one of the best in the insurance arena for paying claims. As far as raising premium rates goes, since LTCi companies cannot increase rates unless approved by a state's Dept of Insurance, perhaps states' DOI should not grant as many rate increases?
... Just a thought!
Related Tags: risk, congress, benefits, premiums, clinton, obama, long-term-care-insurance, ltci
Long term care insurance activist, CB Cotton, and his wife, Kimberly, write for http://www.PrepSmart.com - The Online Baby Boomers Decision Assistance Center, where you get Free Long Term Care Insurance advice, comparative rate quotes and personal guidance, all while safely at home in your favorite pajamas and bunny slippers. Your Article Search Directory : Find in Articles
Recent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as - The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru - The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of - Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta - Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider - How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take - How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom - Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo - How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb - Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo - Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit - The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla - Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs - Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume - Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look - Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi - What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon - Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter - Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are