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Study: The Economy Is Impacting LTC Buyers, Choices

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Long term care insurance buyers were slightly older in 2009 than in previous years, according to a new study by The American Association for Long-Term Care Insurance.

The buyers in 2009 also tended to choose less costly policy features, says the Los Angeles trade group.

The research reflects analysis of 155,000 individual placed policies in 2009, say researchers.

“Clearly the economy is having an impact on when individuals start their LTC planning and what benefit levels and policy options they select,” says Jesse Slome, executive director of AALTCI.

The findings include:

- 73.5% of buyers of individual policies were age 55 or older when they applied for coverage compared to 69% in 2008

- 43%selected initial daily benefit amounts of $149 or less compared to 37% for the prior year

- 92% selected elimination periods of 90 days or longer compared to 86% for the prior year

- 29% selected a policy designed to pay benefits for at least three years

- The overwhelming majority added an inflation growth option that increases benefits each year, with 47% choosing the 5% compound growth factor

The researchers also found that the average buyer between ages 45 and 54 paid $1,900 annually for their coverage in 2009, with prices ranging between companies from $1,000 to over $3,200.

In addition, it found that, in 2009, 54% of LTC insurance purchases involved couples, with the policies covering both lives; 24% involved couples or partners where only one individual was covered; and 22% involved purchases by single individuals.