Overall costs for new long-term care insurance coverage increased 8.6% compared to one year ago, according to the just-published 2015 Long-Term Care Insurance Price Index.
“A healthy 55-year old man can expect to pay $1,060 per year for $164,000 of potential benefits, compared to $925 last year,” reports Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI). “The average cost for a 55-year-old single woman is $1,390, an increase from $1,225 per year (2014).”
Each January, the trade group releases the findings based on top-selling policies offered by leading insurers.
“Rate increases are the result of both higher claim costs and the historic period of low interest rates,” Slome says. Last year, long-term care insurers paid out a record $7.5 billion in claim benefits and the Association predicts the industry will pay some $34 billion in annual claim benefits by 2032.
According to the 2015 Price Index, a married couple both age 60 would pay $2,170 per year combined for a total of $328,000 of long term care insurance coverage. In 2014, the Association reported a couple could expect to pay $1,980. Adding an inflation growth option that builds their benefit pool to a combined $730,000 at age 85 will add $1,760 to the couple’s yearly cost.
A wider spread between the lowest and the highest available costs for each segment analyzed was found by the Association. “The largest spread now represents a 119% difference between the lowest available cost and the highest rate one pays for virtually identical coverage,” Slome says. Much of the difference still impacts single women as insurers continue the trend of charging single women more for coverage due to their increased likelihood of needing long-term care.
While it could be as high as 119%, in some situations the difference between the lowest-cost policy and the highest-cost was 34%, Slome says. “Our average 55-year-old woman could pay as little as $890 a year or as much as $1,829 based on which insurer she buys from.”
For more information call AALTCI at 818-597-3227 or visit the Association’s website at www.aaltci.org.
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