For senior homeowners in Connecticut, getting cheap home insurance is difficult enough, but for those who have taken long-term policies in preparation for a comfortable life in nursing homes, the problem has just gotten bigger.
This is because the Insurance Department of the state has recently approved a 39% rise in long term insurance premiums offered by MetLife. Elderly residents who have policies for this type of insurance are facing a yearly payment that is almost double of what they used to pay. According to most of them, this could prove to be impossible to fulfill.
The premiums, which are meant to cover in-home assistance and nursing home care, have reportedly been rising in the past few years, but the recent jump is the highest so far for state holders. There have also been reports that insurer John Hancock is also planning to increase its rates by around 40%.
According to insurance industry analysts, just like the problem with providing cheap home insurance, long term providers are finding it hard to get returns that will allow them to pay for holders' nursing home care. On average, semi-private rooms in nursing homes in the state can cost as much as $79,000 every year.
Insurance firms' lack of earnings is partly attributed by analysts to the low rates of interest and the companies' miscalculation of the number of policyholders expected to drop their coverage prior to collecting. On the part of the policyholders, majority of them have stated that dropping their policies will mean losing everything they have put into them, which in most cases, are equivalent to lifetime savings.
The problem has widespread implications for the lives of senior citizens. In a research conducted by Boston College's Center for Retirement Research, it has been found that around one third of Americans who will turn 65 this year will require at least 90 days of nursing home services.
In addition, the Kaiser Foundation has revealed in a report published in 2009 that over 10 million U.S. residents will require long-term medical services and care and the figure is expected to rise further. Analysts have stated that for senior Americans, it seems that finding cheap home insurance is not the only problem facing them in these difficult times.