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Center: 40% of short-term care insurance buyers are over 70

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Short-term care insurance (STCI) is a product that life and health agents can still sell to consumers ages 71 and older.

The National Advisory Center for Short-Term Care Information reports that 40 percent of STCI buyers were ages 71 or older when they bought their policies, and 4 percent were 81 or older.

The center, a new arm of the American Association for Long-Term Care Insurance (AALTCI), based those figures on results from an analysis of data on 30,000 STCI policies issued by nine STCI issuers.

Only 9 percent of the issuers’ STCI buyers were under 61, and one of the participating issuers said it’s willing to consider applications from 89-year-olds.

An STCI policy pays for nursing home care, home health care or other types of non-acute ongoing care for less than 12 months.

See also: North Dakota drafts short-term care insurance regs

Long-term care insurance (LTCI) issuers and sellers have traditionally thought as the STCI market as being completely separate from the LTCI market, but, in recent years, ultra-low interest rates have hurt insurers’ ability to offer any product that associated with long-lasting benefits obligations, including LTCI.

Insurers have tried to court would-be buyers in their 40s and 50s, in part to decrease the percentage of applicants who secretly know that they already have conditions that will lead to a need for long-term care, and in part in the hope that the policyholders will generate more premium revenue and investment earnings before they go on claim.

As a result, LTCI issuers have moved away from offering policies with lifetime nursing home benefits, toward offering policies designed to pay for nursing home care for three or fewer years.

The LTCI market shift has helped narrow the gap between STCI and LTCI products and spurred long-term care (LTC) planners to look harder for products available to older applicants.

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“Short-term care insurance is clearly seen as a benefit for seniors,” Jesse Slome, the executive director of AALTCI and director of the new center, said in a comment on the STCI market analysis.

STCI policies can help fill in the gaps left by Medicare Advantage and Medicare supplement insurance coverage, and issuers will sell the policies to older consumers who have some types of health problems, Slome said.