How Long-Term Care Insurance Premiums Can Increase Over Time

I watched my mother's long-term care insurance premium jump 14% in a single year—from $3,200 to $3,648—even though she hadn't used the policy and the coverage terms hadn't changed. That's when I learned that 'level premium' doesn't mean the same thing as 'frozen premium.' Long-term care insurance premiums can and do increase, sometimes dramatically, and understanding why—and what you can do about it—can help you make better decisions about this expensive coverage today and sleep easier about your finances later.

Why Premiums Rise: The Primary Factors

When an insurance company sells you a long-term care policy, they make an actuarial bet: they predict how many of their customers will need care, how long they'll stay in a facility, and how much that care will cost. Then they set your premium so the company collects enough to pay out claims, cover operations, and stay solvent.

But reality often diverges from those projections. Healthcare costs rise faster than expected. More people file claims. Medical advances mean people live longer, driving up total payouts. When these gaps appear, insurers have a few choices: absorb the losses (bad for shareholders), stop selling new policies (annoying but limited), or raise premiums on existing customers.

This last option is the one that affects you. State insurance regulators allow insurers to request rate increases when they can demonstrate actuarial justification—usually documented evidence that their original pricing assumptions no longer hold. The company files the request, regulators review it, and if approved, your premium goes up.

Here's the part many people don't know: rate increases are rarely uniform. An insurer might approve a 10% increase for policies sold in the 1990s while approving only a 4% increase for newer policies. They're essentially spreading the pain across different cohorts based on when the policies were issued and how claims experience has unfolded for each group.

How Age Affects Your Premium Growth

Your age when you buy the policy has an enormous effect on how much your premium might rise over time.

Younger buyers (age 50–55) pay lower initial premiums because the insurer expects to collect payments for decades before claims begin. But here's the trade-off: you'll pay increases over a long stretch. If your annual premium is $1,200 at age 52 and it rises 3% per year, by age 72 you're paying closer to $1,800. By 82, you might be at $2,400. The total you'll pay over a 30-year ownership span can be surprisingly large.

Older buyers (age 65+) face higher starting premiums but fewer years of potential increases. A 65-year-old might pay $3,500 initially but keep the policy for only 15–20 years before using it or deciding to stop. The compound effect of annual increases is smaller, but the dollar increases might feel steeper because they're happening in retirement when income is fixed.

I know a couple, Tom and Susan, who bought long-term care insurance at very different times. Tom bought at 58 and Susan at 68. Over the next 15 years, Tom's premium went from $2,000 to $2,850—a 43% total increase—while Susan's went from $4,100 to $5,200—a 27% increase. On an absolute dollar basis, Susan's increase was larger, but as a percentage of her original premium, it was less. This matters psychologically and financially.

The key insight many advisors miss: it's not just about your age at purchase, but also about the rate increase cycle timing. If you buy just before a large industry-wide increase hits, you'll absorb that increase over a shorter span than someone who buys the year before.

Rate Increases vs. Claim Experience

Insurance companies often talk about 'experience' in terms of claim costs. If an insurer's long-term care customers are filing more claims than expected, or staying in care longer than projected, that's bad experience—it's costing the company more than forecasted.

When a carrier announces a rate increase, they'll cite experience factors: 'We're seeing average nursing home stays lasting 3.8 years instead of the 2.5 years our models predicted.' Or: 'Assisted living costs in our service area have risen 8% annually instead of 4%.'

But here's the nuance: experience is collective. One carrier might have underpriced policies in California but done well in Florida. They might have miscalculated the cost of memory care but nailed assisted living. When they file for a statewide or national rate increase, they're averaging across all those outcomes. Your individual claims history usually doesn't determine your individual increase—you're locked into the company's overall experience.

That said, some carriers do offer discounts for good claims behavior (like compound interest: you don't file, your rate doesn't rise as steeply). But these are rare and usually buried in policy documentation.

Conversely, I've seen carrier announcements where they raise rates 15% nationwide because of investment losses (the insurance company's stock portfolio tanked) or because they're exiting unprofitable markets and consolidating on the healthier ones. This is experience-based, but not the kind most people think of.

Your Coverage Options and Price Stability

Here's a decision that directly impacts future premium growth: how much coverage you buy.

A policy with $200/day nursing home benefits and 4-year maximum duration will cost less than one with $350/day and a 6-year maximum. But it's not just about the starting premium. When the insurer issues a rate increase, they often apply it as a percentage of your current premium, regardless of the benefit level. So the person with minimal coverage might see a $200/year increase, while the person with rich benefits sees a $600/year increase.

This creates an odd incentive: buying less coverage today might lock you into lower absolute dollar increases tomorrow. But it also means you're under-insured for actual care costs, which in 2026 often exceed $100,000/year for nursing home care. This is a genuine trade-off with no perfect answer.

Some policies offer inflation riders—you pay a bit more upfront, and your daily benefit amount rises each year by a fixed percentage (usually 3% or 5% compound). This protects you against the care-cost side of the equation but doesn't prevent premium increases. In fact, a policy with an inflation rider might be more prone to rate increases because the insurer's exposure is growing with inflation.

Timing Your Purchase: When Premiums Matter Most

The conventional wisdom says: buy long-term care insurance as early as possible to lock in low rates. But that overlooks something crucial: you'll own the policy longer, so you'll absorb more increases.

Let me illustrate with a concrete calculation. Scenario A: You buy at age 55 for $2,000/year. Scenario B: You wait and buy at age 62 for $3,200/year (the higher rate reflects your age). Over the next 20 years, assuming 3% average annual increases:

• Scenario A: You pay roughly $58,000 total (premiums rising from $2,000 to $3,600).
• Scenario B: You pay roughly $78,000 total (premiums rising from $3,200 to $5,800).

On the surface, Scenario A wins. But Scenario B means you held off buying, kept your money invested, and enjoyed 7 years of freedom from a sizable annual expense. If your investments returned 6% annually, that extra $2,000/year at 55 would have grown to over $20,000 by age 62. In that light, the decision becomes murkier.

The takeaway isn't 'buy young' or 'buy old'—it's 'buy when your life and finances make sense for it,' because the premium-timing advantage is smaller than most salespeople suggest.

Protecting Yourself from Unexpected Premium Jumps

You can't prevent rate increases—they're baked into the insurance system—but you can make choices that shield you from the worst outcomes.

First, understand your carrier's history. Some insurers (particularly those with strong investment portfolios) have rarely raised rates; others are serial offenders. Look at your policy documentation and ask your agent: has this company raised rates on this policy form in the past 10 years? If yes, how often and by how much? Regulators publish this data in rate-increase filings, though they can be hard to find.

Second, consider a hybrid policy or a partnership long-term care plan. These are often coupled with life insurance or annuities, and they tie premium growth to product-specific risk. They're more complex, but they can offer different long-term cost profiles than standalone coverage.

Third, build flexibility into your plan. If you own a policy and a large increase hits, you have options: reduce your benefit amount, switch to a shorter benefit duration, or apply for a paid-up rider (you stop paying premiums and keep reduced benefits). None of these are ideal, but they're better than just canceling coverage or struggling to pay an unsustainable premium.

Finally, revisit your policy every few years. If you've decided you no longer need coverage—your savings have grown, your kids are grown, your care preferences have shifted—then exit gracefully. Long-term care insurance is a tool, not a commitment. Using it well means knowing when to hold and when to fold.

The bottom line: long-term care insurance premiums will likely rise, but understanding the mechanics—age, claims experience, coverage choices, and timing—gives you real leverage to make smart decisions and adapt your strategy as life unfolds.