Long-term care insurance premiums aren't static—they climb over time, and understanding the triggers behind those increases can save you thousands in unexpected costs. Carriers regularly adjust rates based on claims experience, medical cost inflation, and individual health changes, which means your monthly bill today won't match your bill in five or ten years. Here's what you need to know before those rate hikes catch you off guard.
Why Premiums Rise: The Main Culprits
Insurance companies raise long-term care premiums for two primary reasons: carrier-wide increases and individual underwriting adjustments.
Carrier-wide increases happen when an insurer realizes its claims experience is worse than projected. If more policyholders than expected file claims, or if claims last longer than actuarial tables predicted, the company raises rates across entire blocks of policies. Over the past decade, major carriers like Genworth, Mutual of Omaha, and John Hancock have implemented cumulative increases ranging from 15% to 40% on existing policies.
Individual increases occur when an insurer re-evaluates your health status. A diabetes diagnosis, new medication, or decline in mobility can trigger a rate review. Unlike health insurance, long-term care carriers can often request medical records years into your policy and adjust your premium accordingly—though the specific rules vary by state.
What Recent Rate Trends Look Like
Between 2015 and 2023, long-term care insurance rates increased more frequently than ever before. In 2022 alone, Genworth and Mutual of Omaha announced double-digit percentage increases on blocks of policies. A 55-year-old who locked in a $100-per-month premium in 2010 might now pay $140–$160 monthly for the same coverage.
These aren't rare occurrences—they're structural. Carriers initially underpriced policies because they overestimated how many people would never file claims and underestimated care costs and claim longevity. Medical inflation, longer life expectancies, and rising assisted living and nursing home fees have forced corrections.
How to Protect Yourself From Surprise Hikes
Review your policy annually. Don't assume your premium stays static. Request an illustration from your carrier showing your current rate and any pending increases. Many insurers notify policyholders of hikes with only 60–90 days' notice, giving you limited time to evaluate alternatives.
Consider inflation riders when buying. If you purchase a policy in your 50s, the daily benefit amount matters less than the annual inflation adjustment. A 3% compound inflation rider costs more upfront but protects you against the eroding value of fixed benefits. Without it, a $200 daily benefit purchased at age 55 covers only a fraction of actual care costs 20 years later.
Lock in rates earlier. The younger and healthier you are when you buy, the lower your base premium and the fewer health-triggered increases you'll face. Waiting from 60 to 65 typically adds 30–40% to your initial premium cost.
Know your state's rules. Some states cap the frequency or magnitude of rate increases; others don't. California, New York, and a few others have stricter regulations. If you live in a state with weak protections, this is even more reason to evaluate coverage carefully.
What to Expect in Premium Ranges
For a 55-year-old in good health purchasing a shared-care policy with a 3-year benefit period and a 90-day elimination period, expect to pay:
- Without inflation rider: $110–$180 per month
- With 3% compound inflation rider: $160–$250 per month
These figures are baseline. Age, health history, coverage amount, and elimination period length all shift the number significantly. The same policy for someone 65 or older can easily double.
Should You Adjust or Drop Coverage?
When a rate increase hits, you have three paths: accept the increase, reduce your benefit amount or coverage period, or surrender the policy.
Many people reduce their benefit period from five years to three years or their daily benefit from $250 to $200 to offset a premium hike. This isn't ideal, but it's often more sensible than dropping coverage entirely after 15 years of premiums paid.
If you're comparing options and considering new coverage, Mercoly helps you find and compare trusted long-term care insurance providers in one place, so you can see multiple carriers' current rates and increase histories before deciding.
Frequently Asked Questions
Q: Can an insurance company raise my long-term care premium without approval? Most states allow carriers to raise premiums on existing policies without individual consent, though they must notify you in advance. Some states require carriers to justify increases, but approval from policyholders is rarely required.
Q: How much should I budget for annual premium increases? Plan for 2–4% annual increases in stable years, but expect 5–15% jumps during carrier-wide corrections. Review your policy every year and adjust your budget accordingly.
Q: Is it too late to buy long-term care insurance if I'm already 65? No, but premiums are significantly higher. At 65, expect to pay 2–3 times what a 55-year-old pays for identical coverage, and you'll have fewer years to spread costs before needing care.
Start comparing your options today to find a policy and carrier that fit your long-term budget.