Kiplinger.com columnist Kim Lankford recently wrote that MetLife, one of the largest providers of long-term-care insurance, will stop selling long-term-care policies. She also said two other long-term-care insurance providers have proposed premium hikes for current policyholders. That's because the companies are getting more claims than they expected and need more funds to pay them.
Naturally, the fact the insurers are raising long-term rates or getting out of the business entirely has policyholders worried. However, there are ways for people to guarantee that their long-term-care premiums won't rise. Kim Lankford explains how in the January issue of Kiplinger's Personal Finance magazine:
Traditional long-term-care insurance policies always carry the risk that rates will be raised in the future. However, most insurers offer versions of their policies that charge higher premiums upfront but are paid in full after ten years of by age 65. After that, the insurer cannot raise your rates. These policies, sometimes called ten-pay policies, require a big initial investment and tend to be appropriate for people who have a large chunk of retirement savings on hand. A new law that took effect in 2010 permits tax-free transfers -- know as 1035 exchanges -- from an annuity to pay long-term-care premiums.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
You can also get a guarantee that rates won't rise with a type of policy that has an upfront payment and combines long-term-care protections with life insurance or annuities. For example, if a healthy 65-year-old invests $100,000 in Lincoln Financial's MoneyGuard policy, she can get more than $83,000 per year of long-term care for up to six years (totaling nearly $500,000). If she never needs care, her heirs will receive a $166,407 death benefit. And if she needs to tap some, but not all, of the combo policy for care expenses, her heirs will inherit whatever remains of her original investment.
-
Why United Airlines Stock Is Flying Higher After EarningsUnited Airlines beat expectations for the first quarter and its stock is by soaring. Here's what you need to know.
-
Super Micro Computer: Why This Hot Stock Could Hit $1,500Super Micro Computer's long-term AI revenue potential is underappreciated, Loop Capital says. Here's what you need to know.
-
5 Ways to Save Money on Vacation Rental PropertiesTravel Use these strategies to pay less for an apartment, condo or house when you travel.
-
10 Annoying Hotel Fees and How to Avoid ThemTravel Here's how to avoid extra charges and make sure you don't get stuck paying for amenities that you don't use.
-
Short-Term Insurance Plans' Good, Bad and Uglyretirement You'll need a clear-eyed analysis to gauge the value of short-term care insurance plans and if they're right for you.
-
Retirees, This Is What It Takes to Be Your Own InsurerLong-Term Care Insurance The costs of long-term care are already exorbitant and will only get worse. Follow this guidance to get in front of the issue.
-
How to Appeal an Unexpected Medical Billhealth insurance You may receive a bill because your insurance company denied a claim—but that doesn’t mean you have to pay it.
-
Amazon Prime Fees Are Rising. Here’s How to Cancel Your Amazon Prime MembershipAmazon Prime Amazon Prime will soon cost $139 a year, $180 for those who pay monthly. If you’re a subscriber, maybe it’s time to rethink your relationship. Here’s a step-by-step guide to canceling Prime.
-
How to Haggle for Almost AnythingSmart Buying Learning how to haggle is an invaluable skill. These strategies will help you negotiate a better price for just about any product or service.
-
Disability Insurance Can Provide COVID CoverageCoronavirus and Your Money If you are concerned about long-term complications from COVID-19, consider disability insurance coverage.
