LTCI trend: Limited-duration policies favored

From the American Association for Long-Term Care Insurance:

Individuals who purchased long-term care insurance protection in 2010 continued to favor limited duration policies, according to research by AALTCI. According to data gathered on 153,000 new policies, more than half (57.1 percent) of purchasers selected policies with a benefit period of four years or less.

“Limited duration policies continue to become the preferred choice of many consumers who benefit from their lower cost and are willing to assume some of the risk for a catastrophic long-term care event,” states Jesse Slome, AALTCI’s executive director. According to the Association’s annual study of new policy sales, 52.2percent of buyers opted for a Benefit Period of 4-years or less in2008.

Overall sales of long-term care insurance policies increased in 2010, according to the Association.”Given the economic uncertainty of the past few years, it is understandable that consumers favor ways to reduce the cost of coverage that, while important, is still a discretionary purchase,” Slome notes.”In addition, newer product design features such as the “shared care” option allow couples to purchase more affordable limited-duration policies and still be protected if one spouse requires care for longer than provided by their own policy.”According to the Association, more than three-fourths of individual long-term care insurance policies are purchased by couples.

The Association research revealed a slight increase in the age of buyers, a reversal of the trend towards younger buyers.”The overall age of individual long-term care insurance buyers has increased compared to prior years,” Slome states. In 2010, some 80.7 percent of buyers were under the age of 65 compared to 84 percent in 2008.”Consumers watching their budgets may be delaying purchase, though most individuals (56%) continue to purchase coverage between the ages of 55 and 64.”