Low Interest Rates Push LTCI Prices Up

Low interest rates and other factors may be making new, stand-alone long-term care insurance (LTCI) policies a lot more more expensive this year.

The same forces also seem to be increasing the cost of “linked-benefit” arrangements, or policies that combine long-term care benefits with life insurance.

The American Association for Long-Term Care Insurance (AALTCI) has given outsiders a peek at LTCI and life-LTC hybrid prices in its latest annual LTCI Price Index analysis.

Resources

• AALTCI’s LTCI Facts page
• More LTCI Claims Start With Home Care: AALTCI

AALTCI shows what’s happening to prices for the new policies consumers are buying now, not what insurers are doing to prices for in-force LTCI policies.

For a 55-year-old single male in “select health,” for example, the cost of a stand-alone LTCI policy purchased in Illinois is now about $950 per year with no inflation protection, according to AALTCI. That price is about 9% higher than the annual price for a similar price described in the AALTCI report for 2020.

For a 55-year-old single female in select health, the cost of the stand-alone policy is $1,500 with no inflation protection. That’s about 11% higher than the price of the similar policy included in the 2020 report.