Future of LTC Insurance

By Dawn Helwig, consulting actuary and principal at Milliman

Pricing has gone through peaks and valleys, and many of the challenges are now driven by the investment market and lapse rates that have been much lower than anticipated. All of this leads to rate increases. Because no one likes rate increases, regulatory reaction has been forced to become stricter, she continued. Model regulation will require a minimum margin to be added to the products.

But she noted that the good news is that newer blocks of business are priced more properly, meaning future rate increases should be minimal. “New business is priced well and these policies are very much needed, Helwig said.” It has been publicly stated there will not be a public program anytime soon, so people have to self-finance or buy a policy, whether it’s combo or standalone.

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