A 55-year-old couple purchasing long-term care insurance protection can expect to pay $2,350-per-year (combined) for about $338,000 of current benefits ($169,000 each) which will grow to about $800,000 of combined coverage for the couple when they turn age 80.
The data comes from the 2011 Long-Term Care Insurance Price Index published by the American Association for Long-Term Care Insurance <a href> http://www.aaltci.org </a>that analyzed rates for 11 long-term care insurance policies. According to the Association report, a 55-year old single individual pays $1,480 annually for comparable coverage. If the 55-year-old couple did not qualify for preferred health discounts, their cost would increase by $325 annually.
“We significantly expanded this year’s survey to include more relevant scenarios for both couples and individuals at varying ages, health conditions and to take into account the significant spread in costs among insurers for virtually identical coverage,” explains Jesse Slome, executive director of the long-term care insurance industry trade organization. The study found that rates for comparable coverage from leading insurers could vary by between 41-to-48 percent.
According to Association research, three-fourths (78%) of long-term care insurance policies are purchased by couples where either both or just one spouse purchases coverage. The average age for individual purchasers is 57, Slome explains with some 76.3 percent of purchases made between ages 45 and 64 according to the Association’s research. The 2011 Price Index analyzed costs for couples at ages 55, 60 and 65.
The study reported rates for individuals who qualify for good-health discounts as well as those who qualify for standard rates as a result of having one or more health issues. In addition, for the first time, the analysis included a three percent compound inflation growth factor versus the five percent formula that has been used in prior studies. “More purchasers are opting for this formula which significantly reduces the cost of coverage and can be quite adequate in terms of future benefits,” Slome explains. The Price Index also looked at rates for policies including the newer Shared Care option whereby two policyholders can each access a combined pool of benefits.
“The shared care option is now highly attractive to couples,” states Larry Moore, Director of Marketing for American Independent Marketing, a leading national marketer. “The ability to purchase a more affordable shorter duration policy but have access to a much larger combined pool of dollars is easy to explain and of great value to the buyer.”
Including the ‘Shared Care’ option, a 65 year old couple with average (standard) health can expect to pay $4,660-per-year (combined) for about $338,000 of current combined benefits which will grow to about $527,000 of coverage at age 80. “To best educate consumers, the Price Index reports average rates individuals can obtain from leading insurers,” Slome explains. “However, for this same level of protection, a 65-year old couple could pay as much as $7,200 a year.”
The complete Price Index will be published in the Association’s 2011 Long-Term Care Insurance. For more information, visit the American Association for Long-Term Care Insurance’s website at www.aaltci.org.
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