NYT on rising premiums for life & LTC insurance

[I was misinformed]

A rather alarming NY Times article on how low interest rates are "forcing" even major insurance companies to drastically raise premiums on life insurance and long term care policies.

http://www.nytimes.com/2016/08/14/b...contentCollection=Business Day&pgtype=article

The article seems to mainly rely on anecdotes rather than systematic data, but the stories are distressing. I was very surprised to see this quote:

"The word ‘insolvency’ hasn’t been said very loudly, but certainly on the street people are concerned about insurance companies and their promises and the ways they are trying to avoid keeping their promises,” said J. Robert Hunter, a former Texas insurance commissioner....

In my financial planning I have been considering the insolvency of major insurance companies in the "asteroid strike" category, but maybe that is naive....

 

[ziggy29]

The War on Savers has been expanded to be a declaration of war on insurance consumers.

 

[AllDone]

The article just illustrates the fact that insurance premiums of all types are a function of the financial market and not, for the most part, insurance payouts.

 

[ziggy29]

The article just illustrates the fact that insurance premiums of all types are a function of the financial market and not, for the most part, insurance payouts.

People don't normally have to think about it in typical interest rate cycles. But the Fed is so terrified of a market correction or economic slowdown that they keep rates near zero without much regard to the consequences *that* has.

Part of the problem is $18 trillion in debt. If rates for new Treasury issues rose by even 50-100 basis points, the impact on the budget would be very large. We've backed ourselves into a corner in that regard.

 

[travelover]

The War on Savers has been expanded to be a declaration of war on insurance consumers.

The war on savers has plumped up my stock portfolio nicely.