LTC Buyers Older, More Cost-Conscious

Purchasers of group long-term-care insurance tended to be slightly older in 2009, and an increasing number selected less costly policy features, according to a new study.

A news release from the American Association for Long-Term Care Insurance (AALTCI) about its latest annual study of the long-term care market said 37.2% of new group buyers were age 55 or older compared to 28% for the prior year (2008). Also, some 6.4% of new claims were initiated by individuals age 59 or younger. Only 1.8% of claims made against individual LTC insurance policies were by individuals age 59 or younger.

Further, the Association reported, nearly half (45.4%) of new enrollees selected daily benefit levels of $149 or less, about an 8% increase compared to the prior year.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

The Association said the most common benefit period selected remains five years. Some 66.1% of buyers selected coverage designed to pay benefits for at least five years (up from 61% the prior year). Unlike individual long-term care insurance policies where nearly half of buyers (64.5%) purchased a 5% annual inflation growth option, only 15.4% of group buyers selected this option, with 83.6% selecting an option enabling them to increase benefit levels periodically in future years.         

“Costs for health insurance and other employee benefit programs increased dramatically last year so it’s not surprising that employees were older and more cost-conscious when it came to long-term care coverage,” said Jesse Slome, executive director of AALTCI, in the news release

The research was based on an analysis of nearly 66,000 new purchasers.

More information about purchasing the report is available here