MassMutual LTC rate hike

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skepticalobserver
Posts: 915
Joined: Tue Jul 29, 2014 11:29 am

MassMutual LTC rate hike

Post by skepticalobserver » Wed May 16, 2018 9:41 am

Today's WSJ: MassMutual seeks to raise LTC premiums by 77% (yes, you read that right) for 3/4 of their policyholders.

PFInterest
Posts: 1234
Joined: Sun Jan 08, 2017 12:25 pm

Re: MassMutual LTC rate hike

Post by PFInterest » Wed May 16, 2018 1:59 pm

It's expensive stuff. Doesn't mean those ppl need to pay it.

Alan S.
Posts: 7500
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: MassMutual LTC rate hike

Post by Alan S. » Wed May 16, 2018 2:20 pm

The LTC market has been dysfunctional for years and is only getting worse as adverse selection is added to the mix. The term "death spiral" comes to mind.

Under current circumstances this product should be avoided and the exposure self insured. Also, be aware of the bundling of LTC with other products which makes it more difficult to assess the premium and conditions applicable to just the LTC portion. Cable TV packages are headed in the same direction, about 5 years behind where LTC insurance is now.

Silk McCue
Posts: 849
Joined: Thu Feb 25, 2016 7:11 pm

Re: MassMutual LTC rate hike

Post by Silk McCue » Wed May 16, 2018 2:35 pm

These increases are very unfortunate but are being applied to older policies not covered by legislation passed since then. Today’s policies are a different beast with higher premiums, leaner benefits and are difficult to raise rates on. IF rate raises are approved on these more recent policies the companies can do no more than cover their cost. No additional profit will be approved. Therefore they are priced appropriately up front.

Self insuring for a prolonged event is nearly impossible unless you are very wealthy.

This is an excerpt from the article.
MassMutual said the increases would apply to its “earlier policy series,” some of which have lifetime benefits that are no longer sold. Policyholders will have options for holding down an increase. Typically, insurers allow consumers to give up features such as inflation adjustments or otherwise reduce benefits.

Policies sold today typically cost significantly more and have less-generous benefits than earlier versions. A buyer in his or her late 50s to early 60s can expect to pay roughly $3,000 annually for a policy whose benefits grow to just over $300,000 or so when the owner is in his or her 80s, when claims are often filed, according to financial advisers.
Cheers

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