NO - the price is NOT set in stone. It is indeed a quoted price that will not change UNLESS the insurer finds the block of business is unprofitable because it wasn't priced adequately (remember that LTC is like disability insurance - the insurer is guessing on future costs, how many people will buy [to spread the risk], how many people will file a claim, and how long those claims will last on average).
When we bought our LTCi policies there were almost 50 carriers writing this type of insurance. 19 yrs later there are now less than 12 carriers in the U.S. writing LTCi. Virtually all of them have applied, at one or another, for rate relief (meaning an increase in premiums) from state regulators.
In 19 yrs we have had 3 different carriers (our policies are sponsored by the state pension fund, so we have some "clout" individual consumers don't have) and 4 premium increases. Our premiums are now close to 4x what they cost originally.
A premium increase is handled the same way by all carriers. Each policyholder will receive a letter offering a choice of options. We usually get 4 options because of the type of LTCi policy we have:
- Accept a limited benefit amount (flat amount): lowers the original premium
- Or, Accept a lifetime cap on benefits received: slightly raises the original premium
- Or, Drop our Inflation Rider option: moderately raises the original premium
- Or, keep our policy as-is and pay a higher premium
We are lucky that we budgeted for increases and can absorb the extra costs. To us it's still worth having them. A serious illness/disability for one of us could easily beggar the healthy spouse. If both of us develop issues our assets would be used up within a couple of years at most. Skilled nursing facilities out here run $10k/month and up. Home healthcare costs are almost as bad (plus our home is just not disability-friendly, unfortunately).
You can buy LTCi at any age, but NOT after age 79. Nobody will sell a policy to anyone of that age, period. It's the cut-off for several different types of insurance policies, actually.
And honestly? I used to pull LTCi quotes for clients, and back in 2006 even well-off clients (you had to have $500K in liquidity to invest to be a client at this CFP firm) could not afford an LTCi policy if they were age 60 or older, unless they were in super-healthy physical condition. The underwriting was very "tight" then and I've heard it's even tighter now.
I pulled a quote for a client in average health aged 62 and it came in at $21,000 per year. We all gulped at that and needless to say, the client had to pass on buying one.
Remember you are buying a policy that is dependent upon the insurer being in business and solvent when you finally go to make a claim. So always investigate the financial strength of the LTCi carrier; it's far more important than the actual premium cost.
HTH some folks!
