TERRY SAVAGE savage@suntimes.com March 18, 2012 7:26PM
Bob Levy, age 69, and his wife, Cheryl, age 64, each bought John Hancock long term care insurance policies 10 years ago. And every year since then they have paid a combined premium of $3893.40 per year. The couple live on a fixed income and the low interest they earn on their savings. So they were shocked when Cheryl received a notice of a 90 percent increase in the annual premium for the policy. Then Bob got a similar notice. It means they would now pay $7,385.52 a year.
“Needless to say I was shocked and disappointed. . . . what a waste of money!,” says Bob. “How can that kind of increase be approved by the State of Illinois? Why hasn’t there been any media coverage? And what should we be doing?”
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They did the right thing — hoping to avoid the dreaded outcome of being older, alone, and in need of everyday care that is not covered by Medicare or supplements. They knew that long-term custodial care — at home or in assisted living or in a nursing home — now costs $7,000 a month, and rising yearly.
So they purchased Long-term Care Insurance — something I have highly recommended to defray the future cost of care if it is needed.
But now, many people who purchased long-term care insurance are getting a shock. The insurance companies that wrote these important policies are sending out notices of huge rate increases. In the case of John Hancock LTC policies, the increases are as high as 90 percent annually. ... Click here for the full story.
*Terry Savage is the Chicago Sun-Times’ nationally syndicated financial columnist, and a registered investment adviser. Post personal finance questions on her blog at TerrySavage.com and blogs.suntimes.com/savage.