With time, comes an inevitable change. In the coming years, the long-term health care insurance industry has a few new features that are to be anticipated. Insurance company executives, brokers, and actuaries predict new options for elders with long-term insurance. There is surely going to be lots of testing out of new products and experimenting. We should watch out for new trends in the future of the long-term care insurance industry.
A New Premium Structure
Like other kinds of insurances, long-term care insurance is built on premiums whose rates stay steady for years. However, every few years there have been big hikes in prices due to higher claims and lower investment returns than expected.
To try and resolve this, the biggest LTC insurance company is trying a new model where new policies raise small quantities of rates each year. If it works out, other companies are sure to join the trend.
Cheaper Policies with Less Coverage
Shorter termed policies with fewer benefits are becoming more popular in sales. Many companies are also dialing back inflation protection. They push clients to get 3 percent compound benefit increases from 5 percent compound benefit increases. These actions are taken to lure new clients to a smaller price tag.
Insurers are looking for ways to sell insurances electronically for more efficiency and convenience. This would mean for the products to be simpler and easily compared. It could potentially cut customer costs but would need regular changes which would be an inconvenience to brokers.
More Combinations of Products
Some companies provide a mixture of LTC and life insurance policies. The product remains controversial within the industry. Some companies promote it heavily while others steer away from it because the sales have decreased over time. There has been a lot of talk about combining health insurance and LTC insurance. It will probably be sold by health insurers.
One of the bigger issues is trying to mix pay-as-you-go health insurance with pre-paid LTC insurance. There is an anticipation of the partnership of private and public insurance. This idea presents its benefits, but the funds for it are still in question.
The future holds many changes in the long-term health care insurance industry. This could be overwhelming for someone looking for financial security in the coming years, especially as an elder.
At the Law Office of Inna Fershteyn, we offer expert assistance in Elder Law. For more information call us at (718) 333-2394.
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