The clouds are clearing around long-term care insurance. Sales of new policies in 2014, the most recent data available, were up for the majority of carriers. New, improved, products are in the pipeline. For many, new policy premiums are falling. If you rely on facts and statistics about long-term care to help your clients see the need for long-term care insurance, you might be interested in the latest research, all of which make LTCi an even better story.
Decreasing – Cost of long-term care insurance
American Association for Long-Term Care Insurance (AALTCI) periodically publishes an LTCI premium index. The 2016 National Long-Term Care Insurance Price Index shows a premium decrease for men and couples buying long-term care insurance. According to the 2016 index, rates for males are between 1.9 percent and 4.2 percent less than in 2015. Couples, even same sex couples, who buy shared-care policies benefit from a premium decrease of 7.4 percent to 9.4 percent. Individual female policies increased between 7 percent and 7.2 percent, due in part to longer care periods and higher utilization.
Increasing – Cost of Paid Care
The cost of long-term care is rising. Comparing the 2010 and 2015 Genworth Cost of Care Study reveals an increase in cost for all categories of care. The increase for four out of the five categories exceeded the cumulative inflation rate of 9.4 percent for the same period.
|
|
2015 |
2010 |
% Increase |
|
Home maker services |
$20 |
$18 |
11% |
|
Home health care service |
$20 |
$19 |
5% |
|
Adult Daycare |
$69 |
$60 |
15% |
|
Assisted Living |
$3600 |
$3185 |
13% |
|
Skilled nursing private room |
$250 |
$206 |
21% |
Increasing – Cost to Care Givers
The often untold story about long-term care is what it costs family caregivers. Those costs are rising too. The typical caregiver looses about 7 hours of work per week, 19 percent more than a caregiver in 2010. The average out-of-pocket costs for a caregiver is $10,000, a 20 percent increase since 2010. 62 percent of caregivers used retirement savings to pay for long-term care expenses. 41 percent of caregivers did so in 2010.
Long-term care utilization changes
The Boston College Center for Retirement Research revised long-held estimates about the lifetime risk of needing nursing home care. 44 percent of men and 58 percent of women are expected to need nursing home care. The study decreased the typical nursing home stay to 10 months for men and 16 months for women.
In 2012, home-based care represented half of all long-term care claims and the trend is expected to continue. Many people first think of nursing home care when talking about long-term care. Most people prefer to receive care at home, and today’s policies provide that option.
Increased sales opportunities
The newest long-term care information helps make a stronger case for long-term care insurance.
- The decrease in premium for men and couples makes the premium affordability objection easier to overcome.
- The continued trend of rising costs for paid care sets the stage to add inflation protection.
- Many retirees are concerned about the burden to family members providing long-term care. The growing cost to caregivers can be mitigated with long-term care insurance. Future caregivers may be interested in talking to aging parents about the need for long-term care insurance and providing financial assistance with LTCi premiums. Those clients planning for their own retirement may find their retirement derailed by the cost of care for an aging loved one without long-term care insurance.
- The revised estimates of the need for nursing home care combined with the reduced typical nursing home stay may mean recommending reduced coverage amounts or the new short-term care products.
No matter which strategy you choose to use, your DIS representative will support you with quotes, sales assistance, and client materials. You can rely on DIS to keep you current on new product information, market updates and sales tools all to help you increase the long-term care insurance part of your practice. Request a long-term insurance quote here, and download our “Five Reasons to Secure Long Term Care Now” flier to share with clients.
