LTCI rates rising: AALTCI
By Lauren McNitt
ProWEB Wire (Industry News)
The cost of long term care insurance is rising, according to the 2012 National Long-Term Care Insurance Price Index released Wednesday.
Prices for LTCI policies are between 6 percent and 17 percent higher than comparable coverage a year ago, according to the index.
“Insurance prices have increased as a result of the historic low interest rates and yields on fixed income investments,” said Jesse Slome, executive director of the American Associated for Long Term Care.
About 40 percent to 60 percent of the funds an LTCI carrier accumulates to pay future LTC claims come from investment returns.
The study found that the average cost of long term care insurance for a 55-year-old single person who qualifies for preferred health discounts is $1,720 annually for between $165,000 and $200,000 of coverage. Last year, the same coverage would have cost an average of $1,480 per year.
In addition to higher prices this year, the study found significant discrepancies in cost for the highest priced and lowest priced policies. For a 55-year-old single individual, the highest priced policy costs nearly 80 percent more than the lowest priced policy. For some other categories of applicants, the difference was as great as 132 percent.