Monday, June 11, 2018

LTCi News: Up & Up

As our population ages, Long Term Care insurance has become more and more popular as a cost-effective way to preserve one's hard-earned nest egg. After all, the cost of a nursing facility stay (or even at-home care) runs into the thousands of dollars a month, and can quickly eat up one's savings.

The challenge,of course, is that as we age we tend not to get healthier, and the odds of having such a claim increase each year. Which begs the question: how is this affecting carriers' bottom lines?

Well, we have one answer here, thanks to co-blogger Bob:

"Unum Falls as Long-Term Care Loss Ratio May Prompt Reserve Charge"

Um, Henry, what does this even mean?

Quite simply, their actual loss ratio was almost 10% higher than last year's (loss ratios are metrics of how much is paid out versus premiums paid). That's not exactly a prescription for long term financial stability. A big part of the problem is that those on claim for cognitive impairment (eg Alzheimer's and the like) are living longer, which is nice (kind of) for them, but a direct impact on the insurer's bottom line.

Which may mean another round of rate increases.

Or not:

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