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Life Health > Long-Term Care Planning

LTC Costs Continue to Rise in 2018, but Some Buyers See a Drop

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While long-term care insurance costs increased slightly in 2017, some coverage can be less expensive depending on the insurer, according to new data from the American Association for Long-Term Care Insurance.

The 2018 Long-Term Care Insurance Price Index, an annual compendium of pricing prepared by the AALTCI, found that some costs have actually declined since a year ago.

“In general costs increased slightly compared to our 2017 analysis, but indeed in some situations, though, purchasing a new policy could [cost] slightly less,” said Jesse Slome, director of AALTCI.  

(Related: New Long-Term Care Policy Cost Falls for Some)

According to the 2018 LTC Price Index, the average premium for a 60-year-old couple was $3,490 annually, while the 2017 study reported the same coverage to be $3,790. 

Sloame notes “a number of reasons” for the price drop. For instance, fewer insurers are offering traditional long-term care insurance policies and some of the higher-priced insurers “sell so few policies that we excluded them from this year’s study as they really were not representative of the market conditions.”

A single 55-year-old man could expect to pay $1,870 annually for benefits that would grow to be worth $386,500 when he turned 85. 

“The typical individual needs long-term care at older ages, with most claims starting when policyholders are in their 80s,” according to Sloame.

Women continue to pay more for long-term care insurance than men, and “women face a far greater risk of needing long-term care,” Slome added.   

A single 55-year-old womanwould pay $2,965 annually for the same potential benefit as her male counterpart. Women account for two-thirds of all long-term care insurance benefits paid by insurers, according to AALTCI.

What has stayed consistent according to AALTCI’s 2018 Price Index analysis is that the costs for virtually identical policy coverage vary significantly from one insurer to the next.   

“Each insurer establishes their own prices and available discounts and the cost for virtually identical coverage can vary,” Slome said. “You generally only buy long-term care insurance once, so it’s important to do it correctly the first time.”

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