Markus Andrews

Upgrades could help consumers protect their home, typically one of their most valuable assets, from windstorms and other natural disasters.
But such upgrades can cost thousands of dollars.
The 2024 hurricane season is expected to be extremely active due to high-temperature waters. The latest forecast calls for 23 named storms, including 11 hurricanes.

Ryersonclark | E+ | Getty Images

Making your home hurricane resistant can be a significant financial undertaking. But it’s one that has the potential to pay off as such storms become more intense amid climate change.
In 2024, the national average cost to upgrade an entire house with hurricane windows runs between $1,128 and $10,293, or $100 and $500 per window, including installation, according to This Old House. And that’s just one project.

Upgrades could help consumers protect their home, typically one of their most valuable assets, from windstorms and other natural disasters.
About $8.1 billion could be saved annually in physical damages from windstorms if homes had stronger connections between roofs and walls, or tighter nail spacing, according to a 2022 analysis on hurricane-resistant construction by the Massachusetts Institute of Technology.

‘Now’s the time to prepare’

Hurricanes are among the most expensive natural disasters in the U.S., and experts say the storm-related damage is likely to become more significant as storms become more severe.
Some of the projected effects of global warming on hurricane activity include sea level rise increasing coastal flooding, higher rainfall rates and storms that are more intense and strengthen rapidly, according to a research overview from the National Oceanic and Atmospheric Administration’s Geophysical Fluid Dynamics Laboratory.
“Warmer sea surface temperatures intensify tropical storm wind speeds, giving them the potential to deliver more damage if they make landfall,” notes the Center for Climate and Energy Solutions, a think tank.

Projections from reinsurer Swiss Re show that since the 1970s, hurricane residential-loss expectations have been on the rise, in part due to an increase in hurricane activity and changes in property value from population growth. Improvements in building standards have offset some of that increase, however.
More from Personal Finance:Renters are most exposed to climate hazards in these two statesOver 18 million rental units at risk of environmental hazardsWhy buyers of newly built homes can face a property tax surprise
Scientists anticipate an “extremely active” hurricane season in 2024 due to record-warm tropical and eastern subtropical Atlantic sea surface temperatures, according to hurricane researchers at Colorado State University.
The latest forecast calls for 23 named storms, 11 of which are slated to spiral into hurricanes. Of those, five are expected to reach “major” levels, or category 3, 4 or 5 storms with sustained winds of at least 111 miles per hour.
This year, the water temperature across the tropical Atlantic on average are about 1 degree Celsius, or 1.5 to 2 degrees Fahrenheit warmer than normal. While it doesn’t sound like much, it’s a big difference, said Phil Klotzbach, a senior research scientist at the Department of Atmospheric Science of Colorado State University.
“The tropical Atlantic right now is record warm,” he said. “That means more fuel for the storms that are trying to form.”
While atmospheric and water conditions may change, it’s wise for residents of storm-prone areas to think about undertaking home projects sooner rather than later.
“Now’s the time to prepare and have a plan in place,” said Klotzbach. “You don’t want to be making these preparations at the last minute.”

Hurricane resistance is about preventing ‘pressurization’

Hurricanes are different and unpredictable storms, said Jeff Ostrowski, a housing analyst at Bankrate.
“You don’t know if you’re going to be dealing with storm surge, or high winds or heavy rains. You’re trying to prepare for all those things at once,” he said.

It’s like a balloon that blows up, and when it blows up so much … it pops.

Leslie Chapman-Henderson
president and chief executive officer of the nonprofit Federal Alliance for Safe Homes

There are two key elements in your home to help prevent wind-related damage in a hurricane, according to Leslie Chapman-Henderson, president and chief executive officer of the nonprofit Federal Alliance for Safe Homes, or FLASH. You want to:

Make sure the structural strength between the roof and the wall can withstand wind pressure and impact of debris.
Protect all the openings in your home: the doors, windows and the garage.

“What we’re working to prevent is pressurization. It’s like a balloon that blows up, and when it blows up so much … it pops,” she said. “That’s what happens to your house when the wind comes in.” 

Ways to make your home more hurricane resistant

1. Have an inspector assess your house
Having an inspector come out to see your house is a good starting point for your projects. They will provide a report of what areas in your home need to be redone or reinforced against harsh weather.
2. Reinforce your roof
The average cost to replace a roof in the U.S. is about $10,000, but the exact cost will depend on multiple factors, like the size of your roof, according to the Department of Energy.
For someone getting ready to re-roof their house, Fortified, a nonprofit organization re-roofing program that helps strengthen homes against severe weather, will offer guidelines on how to make the roof sturdy to withstand challenges in your area, said Jennifer Languell, president and founder of Trifecta Construction Solutions, a sustainable consulting firm in Florida.
“It tells you want you need to do to make your roof more sturdy,” she said.
If you’re not ready to completely re-roof your house, adding caulk or an adhesive to strengthen the soffits of your house (that is, the material connecting the roof edge to the exterior walls) will reduce the probability of wind and water gushing into your attic in a storm, said Chapman-Henderson of FLASH. Repair jobs for the soffit and fascia, a horizontal board usually outside the soffit, can cost between $600 to $6,000, according to Angi.com.
The roof-to-wall connection is another thing to secure in an existing home with an attic. Installing metal clips and straps strengthens the hold-down effect, essentially anchoring your house, she said. While the exact cost will depend on factors like the size of your home and the scale of the project, such retrofitting costs span from $850 to $1,350, according to Kin, a home insurance company.

You can do all this stuff in terms of hardening the house, but you’re still kind of at the mercy of whatever storm comes.

Jeff Ostrowski
housing analyst at Bankrate

3. Secure your windows and doors
“Do you have hurricane-impact windows? If not, can you put them in?” said Melissa Cohn, regional vice president of William Raveis Mortgage.
If installing new hurricane windows aren’t in the budget, shutters are lower-cost options to protect windows and other openings, said Chapman-Henderson.
Different types of shutters vary by material, installation and price. Removable galvanized storm panels made of steel are $5 to $6 per square foot, making them the most affordable option, according to information compiled by FLASH.
It may be worth installing shutters as an extra layer of protection, even with impact-proof windows, said Trifecta Construction Solutions’ Languell.
Meanwhile, garage doors are the “largest and weakest opening,” said Chapman-Henderson. Replacing the entire garage door for a wind-rated or impact-resistant version can span from $2,000 to $9,000, according to FLASH.
Emergency bracings can be a lower-cost solution: temporary 2-by-4 wood braces can reinforce your nonwind-resistant door for approximately $150 for materials and installation. A garage door storm kit can run up to $750, FLASH data found.
“You can do all this stuff in terms of hardening the house, but you’re still kind of at the mercy of whatever storm comes,” said Bankrate’s Ostrowski.
4. Talk to your insurer about possible discounts
Strengthening your home against disasters may help lower your insurance cost.
Insurers typically factor in natural-disaster risks when deciding what properties to underwrite and at what cost. That’s why some are pulling back in high-risk areas, or raising prices significantly.
Insurance costs also tend to be higher for existing homes than newly built ones, because such properties were constructed under less stringent building codes.

Once you have an inspector visit your house and recommend projects to make your home more hurricane resistant, talk to your insurance agent about which of the suggestions are most likely to reduce your premium, Ostrowski said.
Keep in mind that each state is different in terms of what premium reductions are available and to what extent, and it depends on the risks, the company’s exposure and the regulatory environment, said Loretta Worters, a spokeswoman for the Insurance Information Institute.
Homeowners’ insurance premium rates are based on measurable risk and while mitigation efforts might help reduce the risk, the scientific measurement of catastrophe risk and mitigation efforts is still evolving, she said.
“All analysis of premium pricing related to mitigation efforts is a question of degree of risk, and not removal of risk entirely from the policy,” Worters said.

Grants, financing can help mitigate costs

If the cost to prepare your home against hurricanes is daunting, there may be grants, tax credits and other programs to help lessen the burden.
Some states have set up matching grant programs for disaster retrofits, said Chapman-Henderson.
In Florida, residents may be eligible to apply for matching grants that go up to $10,000 dollar-for-dollar match for approved upgrades like shutters, roofing and strengthening your garage door roof-to-wall connections, she said. There are similar programs in Alabama and Louisiana.
To find out more, homeowners can search for loans, grants or tax credits available in their state through dsireusa.org, which lists all of the funding opportunities and incentives to harden your home against disasters, Languell said.

For people with poor credit or who live in states that don’t have matching-dollar programs, Property Assessed Clean Energy programs allow a homeowner to finance upfront costs of eligible improvements on a property and pay the costs over time through the property tax bill, said Chapman-Henderson.
Energy-efficient mortgages, also referred to as green mortgages, may also be worth exploring. These loans are meant to help homeowners finance eco-friendly home upgrades or outright buy homes that help reduce energy consumption and lower utility bills, although they often have strict loan limits and require additional information during your application, according to LendingTree.
Depending on your hurricane-resistance project, that might be a fit: Sometimes, energy efficiency goes hand-in-hand with durability, Languell said.
“Sealing the underside of your roof sheathing would also help you from an energy standpoint because it’s sealing all the cracks and crevices,” she said, as this repair both keeps your roof on your house and helps avoid water or air leaks.
The same goes with window replacements: “If you are going to replace your windows from a single-pane window to an impact window that has a better energy performance, it’s saving you on energy,” Languell said.
In this new series, CNBC will examine what climate change means for your money, from retirement savings to insurance costs to career outlook.
Has climate change left you with bigger or new bills? Tell us about your experience by emailing annie.nova@nbcuni.com.

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Microsoft has signed a deal with Brookfield Asset Management to invest more than $10 billion to develop renewable energy capacity to help power data centers.
The companies described the deal as the largest of its kind.
The U.S. faces surging electricity demand as the advent of artificial intelligence coincides with the expansion of domestic manufacturing and the electrification of the nation’s vehicle fleet.

Microsoft Chief Executive Officer (CEO) Satya Narayana Nadella speaks at a live Microsoft event in the Manhattan borough of New York City, October 26, 2016.
Lucas Jackson | Reuters

Microsoft has signed a deal with Brookfield Asset Management to invest more than $10 billion to develop renewable energy capacity to power the growing demand for artificial intelligence and data centers, the companies announced on Wednesday.
Brookfield will deliver 10.5 gigawatts of renewable energy for Microsoft between 2026 and 2030 in the U.S. and Europe under the agreement. The companies described the deal as the largest single electricity purchase agreement signed between two corporate partners.

The 10.5 gigawatts of renewable capacity is 3 times larger than the 3.5 gigawatts of electricity consumed by data centers in Northern Virginia, the largest data center market market in the world.
A Brookfield spokesperson said the deal would lead to more than $10 billion of investment in renewable energy.
The scope of the deal could increase to include additional energy capacity in the U.S. and Europe, as well as Asia, Latin America and India, the companies said. The agreement will focus on wind, solar and new carbon-free technologies.
The U.S. faces surging electricity demand as the advent of AI coincides with the expansion of semiconductor and battery manufacturing in the U.S., as well as the electrification of the nation’s vehicle fleet. After a decade of flat growth, total electricity consumption in the U.S. is expected to surge by 20% through the end of the decade, according to an April Wells Fargo Research note.
Microsoft has pledged to have 100% of its electricity matched by zero-carbon energy purchases by 2030.

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The Biden administration announced that it would forgive more than $6.1 billion in student debt for 317,000 former students of The Art Institutes, the once-giant chain of for-profit schools.
The U.S. Department of Education concluded that the schools and its parent company, the Education Management Corporation, or EDMC, made “pervasive and substantial” misrepresentations to prospective students about post-graduation employment rates, salaries and career services.
Eligible borrowers will get the forgiveness automatically, whether or not they went through the formal process for loan relief for defrauded borrowers.

A general view of the atmosphere during The Art Institute of Atlanta commencement ceremony at Riverside EpiCenter on June 17, 2022 in Austell, Georgia. 
Marcus Ingram | Getty Images

The Biden administration on Wednesday announced that it would forgive more than $6.1 billion in student debt for 317,000 former students of The Art Institutes, the once giant chain of for-profit schools.
The relief will go to borrowers who enrolled at any of the dozens of Art Institute campuses across the country between Jan. 1, 2004 and Oct. 16, 2017.

The U.S. Department of Education, which reviewed evidence provided by the attorneys general of Iowa, Massachusetts and Pennsylvania, concluded that the schools and its parent company, the Education Management Corporation, or EDMC, made “pervasive and substantial” misrepresentations to prospective students about post-graduation employment rates, salaries and career services.
“For more than a decade, hundreds of thousands of hopeful students borrowed billions to attend The Art Institutes and got little but lies in return,” U.S. Secretary of Education Miguel Cardona said in a statement.
“We must continue to protect borrowers from predatory institutions — and work toward a higher education system that is affordable to students and taxpayers,” Cardona added.
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The Education Dept. said The Art Institutes falsified average salaries among graduates, among other abuses.

“For example, according to a former employee, one Art Institute campus included professional tennis player Serena Williams’ annual income to ‘skew the statistics and overinflate potential program salaries,'” the department said.
Eligible borrowers will get the forgiveness automatically, whether or not they went through the formal process for loan relief for defrauded borrowers.

EDMC sold its remaining Art Institute campuses in Oct. 2017, and all existing schools closed under separate ownership in Sept. 2023, the Education Dept. said.
EDMC filed for bankruptcy in 2018. At one point, Goldman Sachs owned a large share of EDMC.
In response to a request for comment on the news, a spokesperson for Goldman Sachs said that it exited the investment more than 10 years ago. More

Stubborn inflation may lead the Federal Reserve to keep interest rates where they are for longer.
That’s good news for cash savers, experts say.

Jamie Grill | The Image Bank | Getty Images

Higher interest rates may be here to stay for a while longer, thanks to persistent inflation.
That’s good news for cash savers, who have the best opportunity to earn returns on their money in 15 years.

What’s more, prospective yields on those investments — whether through liquid savings or timed deposits such as certificates of deposit — are also well above inflation, noted Greg McBride, chief financial analyst at Bankrate.
“It’s a good time to lock in,” McBride said.
To secure today’s high rates, individuals may turn to CDs, Treasury bills and Treasury Inflation-Protected Securities, or TIPs.
Series I bonds — a U.S. government savings bond aimed at providing inflation protection — will pay 4.28% for the next six months, the Treasury Department announced Tuesday.
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While that’s down from a peak of 9.6%, today’s I bond rates have an advantage in that they provide an after-inflation return, according to McBride. The new 4.28% interest rate effective through October includes a 1.3% fixed-rate portion, which has formerly been as low as 0%.
Of course, many of the mentioned investments require savers to stay put for a specified time period and may require some funds to be forfeited if they are cashed in early.
Online high-yield savings accounts provide more flexible terms for accessing cash and still have top annual percentage yields of 5% or more.
Yet 67% of Americans are earning interest rates below that threshold, according to a recent Bankrate survey.

Consider when you need the money

When choosing between locking in returns on cash or finding a better rate on a liquid savings account, the timing of your goals should be your priority.
“The fundamental determinant is, ‘When do you need the money?'” McBride said.
Ask yourself whether you need to have access to your cash at a moment’s notice or whether you can afford to lock it up for multiple months or years, he said.

For investors who have ample cash, it may make sense to break up deposits among online savings accounts, short-term CDs and even long-term CDs or Treasury notes, said Ken Tumin, senior industry analyst at Lending Tree and founder of DepositAccounts.com.
“No one really knows where interest rates are going to fall,” Tumin said. “So you can try to kind of hedge your bets.”
However, for savers without much savings, a high-yield online savings account still makes the most sense, he said.
All savers — regardless of deposit size — should make sure their deposits are properly insured by the Federal Deposit Insurance Corp., if deposited with a bank, or the National Credit Union Administration, if deposited with a credit union.

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The Biden Administration plans to reclassify marijuana as a Schedule III substance, placing it alongside Tylenol with codeine, anabolic steroids, and testosterone, four sources familiar with the decision told NBC News.
Marijuana has been a Schedule I substance for more than 50 years, the same category as heroin and methamphetamines.
Stocks linked to cannabis surged on an otherwise down day for the market.

Trade Roots, a Wareham-based Cannabis dispensary grows cannabis plants for making CBD with THC in their greenhouse, and manufactures CBD products for sale in their shop and distribution to buyers. 
John Tlumacki | Boston Globe | Getty Images

Cannabis stocks leapt on Tuesday afternoon, buoyed by a Biden administration decision to ease federal restrictions on marijuana.
The U.S. Drug Enforcement Administration is expected to approve an opinion by the Department of Health and Human Services to reclassify marijuana as a Schedule III substance, NBC News reported, citing four sources with knowledge of the decision.

For more than 50 years, marijuana has been labeled a Schedule I substance, the same category that drugs like methamphetamine and heroin fall into. Drugs in that category are defined as substances with “no currently accepted medical use and a high potential for abuse,” according to the DEA.
A move to Schedule III would place marijuana alongside Tylenol with codeine and anabolic steroids – that is, “drugs with a moderate to low potential for physical and psychological dependence.”
Investors in cannabis stocks cheered the move, with the AdvisorShares Pure US Cannabis ETF (MSOS) surging nearly 20% in afternoon trading. Amplify U.S. Alternative Harvest ETF (MJUS) jumped about 19%.

Stock chart icon

MJUS performance 1-day

Individual marijuana stocks with small market capitalizations also rallied. Curaleaf Holdings surged 19% to touch a new 52-week high, while Trulieve Cannabis climbed nearly 30%.

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Some student loan borrowers have until the end of Tuesday to take advantage of an opportunity to get their debt forgiven sooner than they would have otherwise.
Here’s what to know about the Biden administration’s temporary student loan consolidation policy.

Some student loan borrowers have until the end of Tuesday to take advantage of an opportunity to get their debt forgiven sooner than they would have otherwise.
Borrowers with multiple student loans who request a so-called loan consolidation by the end of the day on April 30 — a move that will combine their federal student loans into one new loan — may benefit from the Biden administration’s temporary policy.

Applying for consolidation is a straightforward process: It should take under 15 minutes to fill out the forms, said Jane Fox, the chapter chair of the Legal Aid Society’s union.
Here’s what borrowers should know ahead of the deadline.

Bundling your loans could bring you closer to relief

Many former students have multiple education loans, either because they borrowed on repeated occasions throughout college or returned to school at some point. If these borrowers are enrolled in an income-driven repayment plan, it can mean that they’re also on multiple different timelines to forgiveness. (Depending on the plan, borrowers can get any remaining debt excused after 10, 20 or 25 years.)
Under the temporary policy, borrowers who consolidate will get payment credit on all their loans based on the timeline for the one they’ve been paying on the longest.
“This will ensure folks get the maximum number of months of credit towards student debt cancellation,” Fox said.

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Consolidating while this policy is in place could be an especially good deal for many, experts say.
For example, say a borrower graduated from college in 2004, took out more loans for a graduate degree in 2018, and is now in repayment under an income-driven plan with a 20-year timeline to forgiveness.
Consolidating before May 1 could lead them to quickly qualify for forgiveness on all those loans, experts say, even though they’d normally need to wait at least another 14 years for full relief.
“Many borrowers will get complete debt cancellation, particularly those who have been paying for over twenty years,” Fox said.
Usually, a student loan consolidation restarts a borrower’s forgiveness timeline to zero, making it a terrible move for those working toward cancellation.

What to know about consolidating your student loans

All federal student loans — including Federal Family Education Loans, Parent Plus loans and Perkins Loans — are eligible for consolidation, said higher education expert Mark Kantrowitz, in a previous interview with CNBC.
You can apply for a Direct Consolidation Loan at StudentAid.gov or with your loan servicer.
“So long as the application is submitted by April 30, they should be fine, even if the servicers take longer to process it,” Kantrowitz said.
Some borrowers who took out small amounts may even be eligible for cancellation after as few as 10 years’ worth of payments, if they enroll in the new income-driven repayment option, known as the SAVE plan.
Consolidating your loans shouldn’t increase your monthly payment, since your bill under an income-driven repayment plan is based on your earnings and not your total debt, Kantrowitz said.
The new interest rate will be a weighted average of the rates across your loans.

Before consolidating, try to get a complete payment history of each loan. In doing so, according to experts, you can make sure you’re getting the full credit you’re entitled to.
You should be able to get a history of your payments at StudentAid.gov by looking into your loan details. You can also ask your servicer for a complete record.
If a borrower believes there is an issue with their payment count, they can talk to their loan servicer or submit a complaint with the Department of Education’s Federal Student Aid unit.

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Series I bonds, an inflation-protected and nearly risk-free asset, will pay 4.28% through October 2024, the U.S. Department of the Treasury announced Tuesday.
The latest I bond rate is down from the 5.27% yield offered since November.
Short-term investors have more competitive options for cash. But the fixed rate could still appeal to long-term investors, experts say. 

Jitalia17 | E+ | Getty Images

Series I bonds will pay 4.28% annual interest from May 1 through October 2024, the U.S. Department of the Treasury announced Tuesday.
Linked to inflation, the latest I bond rate is down from the 5.27% annual rate offered since November and slightly lower than the 4.3% from May 2023.

Current I bond owners will also see their rates adjust, depending on when they bought the assets. There’s a six-month timeline for rate changes, which begins on the original purchase date.
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Despite falling rates, the I bond’s fixed-rate portion is still “very attractive” for long-term investors, said Ken Tumin, founder of DepositAccounts.com, which closely tracks these assets.

How I bond rates work

There are two parts to I bond rates — a variable- and fixed-rate portion — which the Treasury adjusts every May and November. The history of both rates is here. 
Based on inflation, the variable rate stays the same for six months after purchase, regardless of when the Treasury announces new rates. 

After the first six months, the variable yield changes to the next announced rate. For example, if you bought I bonds in September of any given year, your rates change each year on March 1 and Sept. 1, according to the Treasury. 
By comparison, the fixed rate, which is harder to predict, stays the same after purchase. Every May and November, the Treasury can adjust or keep the fixed rate the same.  

Still ‘great’ for long-term investors

Millions of investors piled into I bonds after the annual rate hit a record 9.62% in May 2022, and rates have since fallen amid cooling inflation. 
Currently, short-term savers have better options for cash. But I bonds could still appeal to long-term investors, according to Milwaukee-based certified financial planner Jeremy Keil at Keil Financial Partners.    
“The only reason you’re buying I bonds is for the fixed rate,” which is 1.3% for new purchases from May 1 through October, he said.

Long-term savers may also like the tax benefits, said Tumin. There are no state or local levies on interest and you can defer federal taxes until redemption.   
“It’s great for long-term holdings of your emergency fund,” Keil added.   
Of course, you need to consider your goals and timeline before purchasing. One of the downsides of I bonds is you can’t access the money for at least one year and there’s a three-month interest penalty if you tap the funds within five years. 
You can buy I bonds online through TreasuryDirect, with a $10,000 per calendar year limit for individuals. However, there are ways to purchase more, including $5,000 in paper I bonds via your federal tax refund.

Frequently asked questions about I bonds
1. What’s the interest rate from May 1 to Oct. 31, 2024? 4.28% annually.
2. How long will I receive 4.28%? Six months after purchase.
3. What’s the deadline to get 4.28% interest? Bonds must be issued by Oct. 31, 2024. The purchase deadline may be earlier.
4. What are the purchase limits? $10,000 per person every calendar year, plus an extra $5,000 in paper I bonds via your federal tax refund.
5. Will I owe income taxes? You’ll have to pay federal income taxes on interest earned, but no state or local tax.

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YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

While long-term care insurance rate increases can be expected, most people are shocked by how much rates can go up over the long term.
The National Association of Insurance Commissioners has reported rate spikes as high as 500%.
For those with limited financial means, a significant premium increase can be overwhelming and devastating, often forcing people to choose between financial security and compromising their parents’ quality of life and access to quality care.

Halfpoint Images | Moment | Getty Images

Supporting aging parents is an extremely difficult situation that comes with both emotional and financial complications.
The cost of long-term care insurance is a prime example.

This insurance, essential for covering costs not typically included in standard health insurance or Medicare, such as nursing home stays or in-home support, can be a financial lifeline. However, it’s not without challenges, especially when faced with an unexpected premium increase.
I know this situation all too well, having purchased long-term care policies for both of my parents in 2000.
For my dad, who was 68 at the time, I purchased 5% simple inflation protection, which accrues interest only on the original benefit. By the time my dad needed in-home care starting in 2014, his daily benefit had grown from $125 to $212.50.

More from CNBC’s Advisor Council

Given our family history of longevity, and because my mom purchased her policy when she was a young 54 years old, we selected 5% compound inflation protection. The daily benefit with compound inflation grows quickly because the interest earns interest.
Now, with that compound inflation protection, her daily benefit has increased from $125 to $403.

But her costs have increased, too, in part because that compound inflation protection costs more. Since 2000, my mom’s long-term care insurance premium has jumped 54%, from $1,224 to $1,885 per year. Along the way, we have experienced three rate increases.

How much can long-term care insurance increase?

While rate increases can be expected, most people are shocked by how much rates can go up over the long term, specifically for policyholders who have had their policies for a decade or more. It’s not uncommon for rates to increase by 50%. However, the National Association of Insurance Commissioners has reported rate spikes as high as 500%.
For those with limited financial means, a significant premium increase can be overwhelming and devastating, often forcing people to choose between financial security and compromising their parents’ quality of life and access to quality care.
We all want what’s best for our aging parents. Here are some ways I recommend clients navigate premium increases to protect their long-term care coverage.

3 ways to handle long-term care insurance premium hikes

Halfpoint Images | Moment | Getty Images

A significant premium increase can threaten your or your parents’ financial stability, but so does not having the right insurance coverage. It’s a catch-22 that often leaves people feeling trapped. I don’t believe that people should be forced to choose between simply accepting the increase or dropping the policy.
The good news is that you have options that don’t result in an all-or-nothing choice.
As a certified financial planner professional, I often encourage my clients to start by exploring three options — accepting the rate increase, freezing benefits or adjusting policy terms.
1. Accepting the rate increase
In some situations, the best course of action is to do nothing. If your parents’ financial situation allows them to comfortably absorb the higher rate, accepting the premium increase can ensure continuous coverage without sacrificing any benefits.
From my personal experience, this was the best choice for my mother’s situation. Despite a 54% premium increase, we chose to accept the rate rather than settle for fewer policy benefits. I know all too well the cost of in-home care, as my dad had Parkinson’s disease for nine years and needed 24-hour care the last four months of his life.

2. Freezing the benefits
If you have financial concerns about a higher premium, you may be able to eliminate or reduce the rate increase by electing to freeze your benefits. When this happens, you agree to pause the inflation protection benefit for a predetermined time frame in exchange for a lower rate. Freezing benefits helps to keep premium costs down without losing coverage altogether. It can be a good choice for parents in their early to late 80s, especially if the premium increase exceeds 20%.
Recently, I advised one of my clients to freeze their benefits when faced with a 22% premium increase since they are in their late 70s and the cost difference wasn’t a good fit for their situation. This change allowed them to maintain the current daily benefit amount but forgo future increases, helping manage costs while still providing some coverage.

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3. Finding a middle ground
Sometimes, the full premium increase isn’t manageable, but you’re not ready to freeze benefits completely. If you’re able to accept some but not all of the premium increase, it’s best to call your insurance company to negotiate your rates.
For example, if the cost is going up 15% but you can only afford 10%, discuss it with your insurer. You could uncover alternatives that an adjusted premium might offer, like a shorter benefit period, longer elimination period or reduced daily benefit amount. However, reducing daily benefits should be a last resort because it decreases the insurance payout and can increase out-of-pocket costs for your parents’ care.

Making the best long-term care insurance decisions

Age is just a number, but so is the cost of long-term care insurance. Begin by having transparent conversations with your parents and siblings, so you can work together to ensure that everyone’s needs and concerns are met. This discussion should cover everyone’s perspectives and financial considerations, especially the needs and preferences of your aging parents.
This can be a difficult conversation to navigate.

If you’re feeling stuck weighing the long-term implications of your available options, it’s important to seek guidance from a financial professional for clarity and insight. A financial expert can go over the specifics of your situation, offer tailored advice, and even suggest alternatives you might not have considered.
In the end, the decision should balance financial foresight with the care and comfort of your loved ones.
 — By Marguerita (Rita) Cheng, a certified financial planner and the CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland. She is also a member of the CNBC Financial Advisor Council. More