According to a new long-term care insurance (LTCI) price index that will be published in April by the American Association for Long-Term Care Insurance (AALTCI), rates for comparable coverage from leading insurers can vary by as much as 41%-48%.
The new guide also compares present value of coverage to future value, revealing that a 55-year-old couple who buys $338,000 worth of LTCI coverage ($169,000 per person) may spend $2,350 per year for their combined premiums and, by the time they reach the age of 80, that coverage will grow to about $800,000. That's assuming that they qualify for the preferred rate. If they do not qualify, it would cost them another $325 per year.
According to the price index, which compares 11 LTCI policy rates for purchase at ages 55, 60, and 65, one 55-year-old would pay approximately $1,480 for annual coverage—again, assuming the preferred rate. Jesse Slome, executive director of AALTCI, said in a statement, "We significantly expanded this year's survey to include more relevant scenarios for both couples and individuals at varying ages, health conditions and to take into account the significant spread in costs among insurers for virtually identical coverage."
The index compares policies priced for good health discounts, as well as rates for those with one or more health issues. It also includes a comparison of a 3% compound inflation factor as opposed to the previously standard 5% compound inflation factor—something more people are considering as policy prices go up.
It also includes comparisons of the new shared care option, which allows each of two policyholders to access a combined pool of benefits.
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