People with long-term care insurance should brace themselves for double-digit premium increases.

The average cost of a long-term care policy has risen 80 percent since 2007, when the average annual premium was less than $2,000, according to industry statistics. Now costs have risen to more than $3,500 a year and large insurance companies, like John Hancock Life Insurance Co. and Genworth Financial Inc., say they are looking to make back some of their costs by raising their rates.

Many insurance companies who entered the market a decade ago were trying to build their businesses so they offered low rates for this type of insurance. But now, a decade later, they have come to realize that they didn't ask enough to cover costs. They didn't realize how many people—8 million Americans—would take advantage of these policies. They also didn't take into consideration the longevity of most people.

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All of these factors have forced some carriers out of the business and, if major rate increases are not approved, others may follow. These increases hit the elderly when they can least afford to pay the higher rates. In the past couple of years, many people have dropped their policies or adjusted down some of the benefits they receive through their policies so they can keep their rates down.

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Long-term care insurance was designed to help seniors pay for in-home care or long-term nursing home facilities. Neither Medicare nor Medicaid will pay the full costs of this type of care.

Costs for nursing home care, assisted living facilities and in-home care have increased dramatically in the past five years. The national median monthly rate for a one-bedroom, single occupancy assisted living facility is $3,450 a month. Nursing home care ranges from $207 a day to $230 a day, depending on whether a person has a semi-private or private room, according to the Cost of Care Survey 2013 by Genworth Financial Inc.

In-home health aides charge an average of $19 an hour to help the elderly with activities such as bathing, dressing and getting out of bed.

According to Genworth, the median annual rate for a private nursing home room in 2008 was $67,525 a year, compared with $83,950 in 2013.

That means Americans can expect to pay about $16,425 more per year more in 2013 than they had to pay in 2008, a 4.45 percent compound annual growth rate over that period, according to Genworth.

Genworth Financial said in the third quarter it plans to file rate increases between 6 percent and 13 percent on its in-force business.

Manulife Financial Corp., the parent company of John Hancock, said it will file requests with state insurance regulators to raise its premiums on long-term care insurance by 25 percent. The company took a $12 million charge in the third-quarter after reviewing John Hancock's U.S. long-term care business. It updated its mortality and morbidity assumptions, which have fueled its decision to ask for premium increases.

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