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AALTCI: LTCI Rates Up 6% to 17%

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Low investment yields have pushed the cost of typical individual long-term care insurance (LTCI) policies 6% to 17% higher this year, according to the American Association for Long-Term Care Insurance (AALTCI).

AALTCI, Westlake Village, Calif., has based those figures on an analysis of prices for 10 frequently sold LTCI policies.

The group looked at prices for 55-year-old single individuals and for couples ages 55, 60 and 65.

The group found, for example, that a 55-year-old single individual who qualifies for preferred health discounts might pay $1,720 per year for $165,000 to $200,000 of current coverage, up 16% from the price the individual would have paid for the same amount of coverage in 2011.

The group also found that the spread between the cost of the most expensive policy available and the cheapest is wider than it was in 2011.

AALTCI will publish more LTCI price data in a book coming out later this year.

“Insurance prices have increased as a result of the historic low interest rates and yields on fixed income investments,” AALTCI Executive Director Jesse Slome says in a statement about the analysis.

An LTCI carrier usually gets about 40% to 60% of the cash used to pay claims from investment earnings, Slome says.


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