March 27, 2008

LTC Carriers Get Younger and Younger

New study says long-term care insurance is an integral part of financial planning, not just retirement

Long-term care insurance is becoming a staple of financial planning for those in their 40s and 50s according to new research by the American Association for Long-Term Care Insurance (AALTCI). The research found that one third (33%) of buyers of individual long-term care insurance protection in 2007 were under age 55. Younger individuals are not merely buying protection in anticipation of claims in their later years, as the Association's new study revealed claims involving policyholders in their 20s and 30s.

"Long-term care planning is now an integral part of mainstream financial planning, especially for baby boomers," said Jesse Slome, AALTCI executive director, in a statement. According to data published in the Association's 2008 Long-Term Care Insurance Sourcebook, Slome said some 400,000 Americans purchased insurance protection last year either on an individual basis or through their employer, with the total number of Americans with protection now reaching eight million.

"Individuals who purchase protection at younger ages are far more likely to qualify for significant savings offered to those who meet health qualifications," Slome says, "and now the data confirms that some of these younger policyholders will actually receive benefits from their protection as a result of an accident or illness."

Six of the nation's leading insurers shared data for their youngest policyholders receiving claim benefits in 2007, the Association says. Here are some examples from the study of young LTC carriers. One such claimant was a 32-year-old who fell and injured their knee requiring several surgeries and months of rehabilitation.After six months on claim (receiving care in their home) they recovered fully. Another individual (currently 39) has been on claim for over four years due to Parkinson's disease. The youngest individual on claim (individual LTCi policy) was age 25 upon submission of the initial claim payment. The youngest group (employer-sponsored) plan participant on claim is 23.

Complete study findings are included in the AALTCI's 2008 LTCi Sourcebook.

2007 Sales By Issue Age (Individual policy sales)
Under 35 1%
35-44 6%
45-54 26%
55-64 50%
65-74 15%
75 or Older 2%
2007 Sales By Issue Age (group policy sales - employer-sponsored)
Under 35 9%
35-44 18%
45-54 36%
55-64 30%
65-74 6%
75 or Older 1%

Source: 2008 Long-Term Care Insurance Sourcebook, published by the American Association for Long-Term Care Insurance, February 2008

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