Insurance Carriers have experienced higher claims and losses, due to increased longevity, chronic illness survival rates and cost of care. As a result, 12 of the top 20 carriers have dropped out of the market in the past 4-5 years. In addition, all carriers have had huge rate increases and/or offered clients a cash buy-out option to cancel older policies. Newer policies have been re-designed and re-priced to account for increased LTC expenses.
In most cases, I recommend Living Benefit Life that will accelerate up to 100% of the face value (depending upon severity of illness), in case of: Critical Illness (Cancer, Heart Attack, Stroke, Major Organ Transplant, etc.); Chronic Illness; Disability; Terminal Illness; or Death. This allows the client to have one policy with guaranteed level premiums that can provide access to funds while they are alive or in case of death.
That is an excellent question! What happened was that when these policies were first rolled out, the costs of long term care and the average lifespan were still reasonable for insurers to issue coverage for. As time passed, however, the skyrocketing costs of long term care, coupled with longer lifespans created a situation where the insurers were more and more often taking losses on the policies. So they either retooled them, pushing the enrollment age up, lowering benefits, and raising the premiums, or they dropped the policies altogether. There are still some companies out there that offer them, but with the change in the law in 2010, more people are using their annuity payouts or 401k payouts to cover those long term care costs tax free. I hope that helps, thanks for asking!
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In most cases, I recommend Living Benefit Life that will accelerate up to 100% of the face value (depending upon severity of illness), in case of: Critical Illness (Cancer, Heart Attack, Stroke, Major Organ Transplant, etc.); Chronic Illness; Disability; Terminal Illness; or Death. This allows the client to have one policy with guaranteed level premiums that can provide access to funds while they are alive or in case of death.