[LTC-Sales_Discussions] Question for the group

[ltc-sales_discussions@ltpcalums.com]

EArl:

Your story may seem scary but it may be the norm before long throughout the industry.
I began telling my clients in three states to expect a premium rate increase in the near future. I'm doing that because I want to reduce the number of irritable calls that are about to pound me when they get the notice. And it has nothing to do with the integrity of these companies. Because at one time they had the highest ratings from all of the ratings agencies.
I think because the industry was new without the  experience to go on, the actuaries underpriced the policies until the claims began to proliferate.
If you read the recent survey by consumer reports (Nov) on the LTC industry these premium rate increases are occurring all the time.
I see the same pattern happening again because everyone wants the best policy at the lowest cost. And some companies are adding fuel to the fire by offering new policies with more bells and whistles that anyone will ever need or use at prices that beat the competition substantially.
What do you think will happen in several years when the claims start comming in. Either the company will ask the commissioner for a premium rate hike or the company will discontinue the policy and offer a new one to give polciholders the comfort and illusion that the company has not hiked their rates.
I am not sure that changing companies for newer policies is an answer to your problem because as I pointed out the same thing may happen again. If your client has the funds I would look at asset based LTC or paid up policies as a solution.     

Lou Eliesen  CEP  CLTC     
loue12@juno.com