Aspirin, Not Morphine: Inflation Risk, Interest Rate Movements and Long-Term Care Capitalization

Bruce Stahl

Interest rate movements (or lack thereof) can present problems for insurers that underwrite and sell long-term care insurance (LTCI), but only under particular circumstances.

To understand these effects, it is essential to grasp how LTCI can be affected by inflation, how inflation relates to interest rates, and, finally, how insurers invest their LTCI assets. In this article, Bruce Stahl, ASA, MAAA,explores this issue.

Posted with permission of the ©Society of Actuaries, Schaumburg, Illinois.

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Author

Bruce Stahl

Senior Vice President and Head, U.S. Individual Life

Aspirin, Not Morphine: Inflation Risk, Interest Rate Movements and Long-Term Care Capitalization

Interest rate movements (or lack thereof) can present problems for insurers that underwrite and sell long-term care insurance (LTCI), but only under particular circumstances.

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Meet the Authors & Experts