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Study Reveals How Much Long Term Care Insurance People Purchase

Affordability Drives Buying Patterns According to American Association for Long Term Care Insurance Research

Long term care insurance expert Jesse Slome, director of the American Association for Long-Term Care Insurance. Click here for high-resolution version

LOS ANGELES, CA--(Marketwired - Jun 3, 2015) - Individuals are purchasing long term care insurance at younger ages and selecting lower levels of coverage and options that make protection more affordable according to new research.

"Buyers are younger, they begin with lower amounts of initial coverage and they select options that reduce their cost significantly," reports Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI). The Association's just-published 2015 LTC Sourcebook includes an analysis of 85,000 individuals who purchased long-term care insurance protection in 2014.

"Nearly 40 percent of buyers were age 54 or younger, compared to 29 percent who purchased in 2012," Slome notes. "Buying younger makes sense because premiums are less expensive and several leading insurers now offer some very attractive options that allow you to increase coverage in future years even if your health has changed."

One of the most significant changes revealed by the study affects the future growth of policy benefits. "Over half (51%) of buyers in our prior study selected an option where their available pool of benefit dollars increased by five percent yearly," Slome shares. According to the Association research only 14.5 percent selected this option when purchasing coverage in 2014. Nearly half selected a three percent growth option.

"Many people have the mistaken impression that long-term care insurance costs thousands of dollars a year," Slome admits. "If you take advantage of various discounts, work with someone who can compare pricing for the various features and options, you can bring the cost down by hundreds or even thousands of dollars."

The long-term care insurance expert reports that a healthy couple, both age 60, should expect to pay as little as $2,170 annually in combined cost. "They would each have about $165,000 of benefits available to them should they need care at home or even in a skilled care facility," Slome adds. "That amount will pay for quite a bit of care at home which is what most people want as they age." A 65-year-old couple would pay about $3,600 for the same amount of coverage.

"If you can afford more coverage, that's certainly a viable choice," Slome advises. "But, many people today plan to have their insurance pay part of their costs with the rest paid from their Social Security benefits or their retirement savings."

Three Questions To Ask When Considering Long-Term Care Insurance

Roughly a dozen insurance companies offer long-term care insurance policies according to AALTCI. "You can't buy coverage directly from an insurance company and comparing the options and the way contract language dictates future benefit payments can be daunting," Slome admits. "You only receive the contract after you apply, often submit payment, and are accepted." Contracts can be 40-to-50 pages long, he adds.

"If you want an objective comparison, work with a long-term care insurance professional able to offer multiple policies from several insurance carriers," Slome advises.

The Association director suggests three questions to determine an insurance professional's expertise in the field. "Ask, how many years he or she has been selling LTC insurance and how many policies they sell each year," Slome recommends. At least three and preferably five years, and at least half or more of their income derived from long-term care insurance makes one a specialist he offers.

"Finally, ask how many insurance companies they are 'appointed' with," Slome explains. "An insurance agent who focuses on long term care insurance will typically be appointed with between four and six leading LTC insurers including those offering life insurance and annuity policies that now offer LTC benefits."

Free access to read informational consumer guides can be accessed on the Association's website. To obtain long term care insurance costs connect with a professional by calling the national organization at (818) 597-3227 or visit the Association's website at www.aaltci.org.

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