“Why High Interest Rates Are Good News for Long-Term Care Insurance,” by Pete Grieve, Money
“When you purchase long-term care insurance, it should offer peace of mind knowing you’re covered as you age — but all too often Americans have opened policies only to have their premiums later rise to unaffordable levels. Now, there’s finally some hope that the market has entered a period of stability, thanks in part to today’s high interest rates. Bonds are the primary investments for many long-term care insurance investment portfolios. For years, low interest rates for bonds resulted in low returns, ultimately hurting insurers’ bottom lines. However, because of higher interest rates, they’re now able to get better returns on your premium dollars. That’s good news for customers.”
LTC Comment, Stephen A. Moses, President, Center for Long-Term Care Reform:
So, premiums should go down now for the same reason they went up before, interest rates. Well, maybe, over time, but the LTCI business has a lot of ground to make up. So it may take a while.
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