LTC insurance question

[Hendevil]

So I've read a couple things that together confuse me on LTC pricing. I've read that according to model regulations, it is guaranteed renewable, meaning that the rates can go up each year upon renewing but the carrier cannot deny renewal. I've also read that it is issue-age rated, which, according to TIA, would mean that the premiums would stay level from year to year and would be based upon the age at which the policy was issued. Could someone please explain this seeming contradiction to me?

[volsfan]

Originally Posted by Hendevil

, according to TIA, would mean that the premiums would stay level from year to year and would be based upon the age at which the policy was issued.

I believe that would assume there were no rate increases. If the company files a rate increase of say 10%, everyones premium would go up and stay level until the next rate increase.

[actexp]

yes, it is generally level premium based upon original issue age. however, a company can generally file for, in any or all states in which it operates, for a rate increase or decrease on a bloc basis. Thus, they can get a 25% increase on a bloc that is running very poorly, and your premium will go up by that amount in future years.

[Hendevil]

Thanks for the quick response. So, if it were "attained age rated" then it would mean that each individual policy could go up with each additional year of age? Could there be rate increases for the block of business on top of these attained age rate increases?

[MATE Seminars]

Originally Posted by Hendevil

Thanks for the quick response. So, if it were "attained age rated" then it would mean that each individual policy could go up with each additional year of age? Could there be rate increases for the block of business on top of these attained age rate increases?

Yes, with attained-age rating there are two types of rate increases. There are age rate increases (due to moving from one age band into the next one). And there are rate table increases (when the insurer files for and gets approved a new rate table).

With issue-age rating, there are no age rate increases, but there can still be rate table increases.