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Data & Research February 25, 2009
Buyers of Long-Term Care Insurance Get Younger
An industry-sponsored study found that 86% of individual buyers of long-term care insurance last year were younger than age 65.
Reported by Ellie Behling
Some 400,000 individuals purchased long-term care insurance protection in 2008, according to a report by the American Association for Long-Term Care Insurance. Overall, 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.
The overwhelming majority of individual buyers in 2008 were younger than age 65, according to a release of the survey results. More than half (53%) of individual buyers were between ages 55 and 64, compared with half the previous year. Another 24% were between ages 45 and 54 in 2008.
In 2000, the average age of someone buying individual long-term care insurance was 67, the association said.
“Individuals continue to purchase protection at younger ages,” said Jesse Slome, executive director of the industry association, in the release. “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.”
Opting for Cheaper Coverage
The number of individuals purchasing long-term care insurance protection for a specified number of years also increased, the association reported. More than three-fourths (76%) of buyers in 2008 opted for coverage for a claim lasting five years or less—that is a slight increase from the previous year (71%). The association cites cost as the reason.
The most expensive long-term care insurance policies have unlimited benefit periods.Opting for a specific number of years can reduce the cost by 30% or more, the release said. “Consumers are right-sizing their protection taking into account available savings and retirement income,” Slome said.
Consumers were fairly evenly spread in terms of the level of selected daily benefit, according to the survey. Just under one-third (31.5%) opted for a daily benefit between $100 and $149, which amounts to between $36,500 and $54,385 in yearly benefit. If the policy offers an options for benefits to keep pace with rising costs, 15 years from now that would amount to as much as $75,800 a year, according to the release.
The study analyzed data from 215,000 buyers of individual long-term care insurance protection.
The complete findings are published in the 2009 LTCi Sourcebook available from the American Association for Long-Term Care Insurance. More information is available at
The complete findings are published in the available from the American Association for Long-Term Care Insurance. More information is available at www.aaltci.org.