The Oregon Department of Consumer and Business Services has given John Hancock permission to increase premiums on 7,300 long-term care insurance (LTCI) policies an average of 39% each.

John Hancock, Boston, a unit of Manulife Financial Corp., Toronto (TSX:MFC), asked for the increase for a block of LTCI business that includes some policies originally sold by Time Insurance Company and Union Security Insurance Company, officials say.

Oregon officials estimate John Hancock accounted for about 14% of the state’s $133 million in LTCI premiums in 2010.

In Oregon, the average individual LTCI policy costs about $2,000 per year. The John Hancock rate change will increase the average cost of the affected policies to about $2,800 per year, officials say.

John Hancock says it needs to increase LTCI premiums because LTCI policyholders are living longer than expected and keeping the policies longer than expected. The Oregon department agrees with that assessment, officials say.

Policyholders can avoid premium changes by adjusting policy benefit levels. About 81% can avoid a rate increase by accepting a reduction in inflation protection, officials say.