Some companies that offer long-term care insurance are reducing their premiums to entice enrollment.
“Life insurance and life policies with long-term care benefits are very interest rate sensitive” Jesse Slome, director of American Association for Long-Term Care Insurance, told the McKnight’s Business Daily. “So, when interest rates go up (as they are now doing), it’s common to see policy premiums decrease.”
Indianapolis, IN-based OneAmerica Financial Partners was perhaps the first company to cut prices, partly because of rising interest rates and partly because of customers’ focus on savings, ThinkAdvisor reported.
“We’re excited to offer cost savings to our customers at a time when everyone could use a little financial relief,” Jeff Levin, vice president of distribution for the Care Solutions products, told the media outlet.
Columbus, OH-based Nationwide Mutual Insurance Co. followed suit, according to ThinkAdvisor. The insurance company announced earlier this week that it will reduce premiums on its life-LTC hybrid policies this month by an average of 5% in most parts of the country. New York and California are excluded from the price cuts. According to ThinkAdvisor, Nationwide also is increasing the maximum policy issue age from 70 to 75.
“While sales of linked-benefit [life+LTC] policies remain strong, the potential impact for skilled nursing facilities is still going to be rather negligible,” Slome said. “It generally takes 15 to -20 years before policy buyers face needing the type of care that would require skilled nursing care/stay. So, long-term, having more policy owners is good … but in the short-term, few of these policies are currently paying LTC claims.”
