Interest rates have to go up sooner or later, and rising rates should greatly decrease the risk of future increases in private long-term care insurance (LTCI) prices.
Jesse Slome, executive director of the American Association for Long Term Care Insurance (AALTCI), makes that argument in a commentary on the state of the LTCI market.
LTCI policyholders have faced long waves of premium increases in recent years. For some policyholders, the monthly premiums have doubled.
Record low interest rates have contributed to other pricing problems, by reducing insurers’ investment yields, Slome says.
Rising rates will help improve the insurers’ yields, Slome says.