John Hancock, one of the largest long-term-care insurers, plans to raise rates on policies it sold itself for the first time ever. It is filing for a rate increase on long-term-care policies sold in the 1990s and on some newer New York Partnership policies.
The changes will affect about 275,000 people, or about one-fourth of the company's long-term-care customers. Premiums will rise by 13% on policies originally issued by John Hancock; they'll jump 18% on policies that the company took over from Fortis in 2000. The average increase will be $21 per month ($252 per year). The new rates do not apply to group policies.
Premiums are heading up because John Hancock anticipated more people would drop their long-term-care coverage before collecting benefits. Genworth, another major long-term-care insurer, made a similar announcement a few months ago, raising its rates by 8% to 12% for 440,000 existing policyholders. Before these moves, the two companies were standouts for keeping premiums constant once a policy was sold.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
Bottom line: Even if your rate increases, hold on to your policy. Most long-term-care insurers have raised rates for new buyers the past few years, so not only are new premiums on a higher plane in general, but you'll surely pay more because you are older and more likely to have health issues.
If the rate boost is a strain, shorten your benefit period to three years or drop the compound inflation protection (especially if you're in your seventies or older), rather than give up on the insurance altogether and get nothing for it.
-
Is Trump's Tax Plan Speeding Up the Looming Social Security Funding Crisis?Social Security Social Security's combined retirement funds are running out of cash, and its insolvency date is expected to occur in less than a decade.
-
How to Keep Your Work Friends After You RetireWork friendships can boost teamwork, lift your spirits, and make the job more fun. But when you retire, these friendships can fade. Here's a look at why that happens and what you can do about it.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
Roth IRA Contribution Limits for 2025Roth IRAs Roth IRAs allow you to fund your retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2025 limits and income-based phaseouts.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How Much Life Insurance Do You Need?insurance When assessing how much life insurance you need, take a systematic approach instead of relying on rules of thumb.
-
When Is Amazon Prime Day? Everything We Know, Plus the Best Deals on Apple, Samsung and MoreAmazon Prime Amazon Prime Day is four days this year. Here are the key details you need to know, plus some of our favorite deals to shop during the sale.
-
How to Shop for Life Insurance in 3 Easy Stepsinsurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
-
Five Ways to Shop for a Low Mortgage RateBecoming a Homeowner Mortgage rates are high this year, but you can still find an affordable loan with these tips.
