When long term care policies are sold, people are reassured that the premiums will be stable. But they often forget this is not a guarantee and if the insurance company discovers they have underpriced a product for a class of people the premium will go up.
I have actually been impressed that John Hancock (Manulife) and Genworth have been able to keep their premiums as stable as they have, but when they discover underlying assumptions are wrong (like how many people will let their policy lapse), rate changes will come.
They scary part will be when the the baby boom hits the age where they start using significant amounts of long term care and if their usage differs wildly from the insurance companies expectations.
This entry was posted by David on June 3, 2008 at 11:38 am, and is filed under Long Term Care. Follow any responses to this post through RSS 2.0.Responses are currently closed, but you can trackback from your own site.