Newer Long Term Care Insurance Inflation Options Gain Favor

Over 330,000 individuals purchased long term care insurance last year and an increasing percentage opted for newer options that increase the future value of their coverage.

According a study of new buyers conducted annually by the American Association for Long-Term Care Insurance a growing percentage are choosing newer growth options including one that increases benefits by three percent annually.  “You want your coverage to grow to keep pace with anticipated increased costs over time,” explains Jesse Slome, executive director of the national trade organization.

Historically, the most popular option increased future benefits by five percent, Slome notes.   “Today, three percent is becoming the new five percent because consumers are finding it a far more affordable and therefore attractive option.”  The long term care insurance expert explains that costs for coverage and benefit increase options are closely tied to interest rates.  “With interest rates at near zero with no one predicting any change in the next few years, how can you increase benefits at five percent and keep the premiums affordable?” Slome asks.  “As a result, newer options which benefit consumers are being offered.”

The Association study found that 23.5 percent of new buyers opted for the three percent compound growth option in 2011 up from 16.7 percent during the prior year.   The percentage of those selecting the old-style five percent growth option declined from 42.8 percent to nearly 34 percent.


The need to plan for the eventual risk of needing long term care is vital for individuals over age 50 according to Slome.  “We tell people the risk they will need care is either zero percent or 100 percent and the question is, do you have a plan in place?”  Not all those who want to purchase insurance can do so according to the Association.  “You must be able to health qualify for this coverage and you must be able to afford the premiums,” Slome concludes.  “The newer options now available make it much more affordable for many more people who recognize the risk they face and want to prepare.”

For more information or to connect with a knowledgeable long term care insurance professional designated by the Association, call their Los Angeles national headquarters  at (818) 597-3227.  You can also access informative guides authored by Slome on reducing long term care insurance costs via the Association’s website.

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