The Wall Street Journal has an update article this week on the financial health of the long-term care insurance industry, detailing recent rate increases and reminding us that even with contraction of this specialized market for sellers of new policies, there are still more than 7 million policies affected by the inadequate pricing structure issues.
Steep rate increases that many policyholders never saw coming are confronting them with an awful choice: Come up with the money to pay more—or walk away from their coverage.
“Never in our wildest imagination did we consider that the company would double the premium,” says Sally Wylie, 67, a retired learning specialist who lives on Vinalhaven Island, Maine.
In the past two years, CNA FinancialCorp. has increased the annual long-term-care insurance bill for Ms. Wylie and her husband by more than 90% to $4,831. They bought the policies in 2008, which promise future benefits of as much as $268,275 per person. The Wylies are bracing for more increases.
The above is why a person should consider pre-planning for long term care with an irrevocable trust.