Long-Term Care Insurance Individual Buyers Are Younger

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Consumers Purchasing More Affordable Long-Term Care Insurance

Individual Buyers Are Younger; Opting For More Affordable Cost-Sharing Approach

Los Angeles, February 25, 2009  –  Some 400,000 individuals purchased long-term care insurance protection in 2008 according to a just-released report.   The overwhelming majority (84%) of individual buyers in 2008 were younger than age 65 and three-fourths (76%) selected a more affordable approach to this protection by opting for coverage for a specific number of years.

The annual study conducted by the American Association for Long-Term Care Insurance, the industry’s professional trade organization, analyzed data on 215,000 buyers of individual long-term care insurance protection.  According to the organization’s research, some 8.2 million Americans now have long-term care insurance protection purchased on an individual basis (typically through an insurance professional) or through a plan offered by their employer.

"Individuals continue to purchase protection at younger ages," explains Jesse Slome, the Association’s Executive Director.  In 2008, some 53% of individual buyers were between ages 55 and 64; compared to 50% the prior year.  Another 24% were between ages 45 and 54 (2008).  "The age of buyers keeps dropping as consumers — especially baby boomers — understand the cost-saving benefits of locking in good health discounts and ways to make protection more affordable," Slome explains.  In 2000, the average age of an individual buying long-term care insurance was 67.

The number of individuals purchasing long-term care insurance protection for a specified number of years also increased according to the Association study.  Just over three-fourths (76%) of buyers in 2008 opted for coverage for a claim lasting five years or less; a slight increase over the prior year (71%).  "The most expensive long-term care insurance policy is one with an unlimited benefit period (one with no cap on the number of years benefits will be received)," Slome explains.  "Consumers are right-sizing their protection taking into account available savings and retirement income.  This cost-sharing approach can reduce the cost of protection by 30 percent or more

Perhaps in recognition of cost-consciousness, consumers were fairly evenly spread in terms of the level of selected daily benefit.  Just under one-third (31.5%) opted for a daily benefit between $100 and $149.  "In current dollars, that amounts to between $36,500 and $54,385 in a yearly benefit," Slome notes.  "But most policies offer an option so benefits keep pace with rising costs and 15 years from now, the value of the (higher) benefit would be $75,800 a year."

The complete findings of the study are published in the 2009 LTCi Sourcebook available from the American Association for Long-Term Care Insurance.  For additional information, call the Association’s offices at (818) 597-3227 or visit the organization’s website: http://www.aaltci.org/.

Summarized Study Data
credit:  2009 LTCi Sourcebook, American Association for Long-Term Care Insurance

Age of Buyers (2008)
Under 45                   7%
45 to 54                   24%
55 to 64                   53%

65 and Over            16%

Daily Benefit (2008)
Less than $100                  6.5%
$100 to $149                   31.5%
$150 to $199                     35%
$200 and Over                   27%

Benefit Period (2008)
2 Years                   7%
3 Years                   30%
5 Years                   24%
Unlimited                13%


Premium Paid (2008)
Age                   Low                   High                   Average

35 – 44               $637                   $2,830                   $1,650
45 – 54             $1008                   $6,440                   $1,900

55 – 64               $844                   $7,400                   $2,150
65 and Over     $1,883                   N/A                   $3,350

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