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A 55-year-old individual considering long-term care insurance protection can expect to pay $709-per-year for a base level of protection if they are married or $1,095 if they are single according to the 2008 Long-Term Care Insurance Price Index published by the American Association for Long-Term Care Insurance (www.AALTCI.org). Costs for coverage increased about four percent from the prior year.

The annual index measures current costs for top-selling long-term care insurance policies that offer consumers approximately $115,000 in current benefits (base-level coverage), with protection increasing yearly as the individual ages. “That coverage will grow in value to over $305,000 of protection in 20 years,” explains Jesse Slome, Executive Director of the national trade organization that conducted the research. The study compares costs for plans that provide benefits for 3-years or longer with an annual compound inflation option that increases the available insurance benefits by five percent compounded each year.

“Policy costs increased slightly compared to the prior year according to the study. “The cost of long-term care insurance is directly linked to interest rates, the anticipated likelihood of claims as well as care costs,” Slome explains. “When interest rates decline as they have in recent years, insurers need to increase premium costs. And as our society ages, more people will be needing long-term care that becomes more costly each year.”

“People often ask what is the best age to buy long-term care insurance protection and the honest answer a month or two before a change in your health,” Slome explains. “But since no one can predict when that’s going to happen, we try to show people the benefits of planning early, generally in their mid-50s is a good recommendation.”

Another Association study of leading insurers which issued 250,000 individual long-term care insurance policies in 2007 revealed that significantly more individual applicants in their 50s qualify for preferred health discounts than those who wait until their 60s to apply (51.5 % versus 42.2% ). “It’s never an economic advantage to wait,” Slome says. “Costs do increase from year-to-year and that change in your health could make it impossible to health-qualify no matter how much you are willing to pay. Plus, you are not protected during the years you delay.”

While most people will derive benefit from their long-term care insurance at older ages, some require care in their 50s and 60s as a result of accidents or early-onset illnesses such as Multiple Sclerosis and Parkinson’s. “Some 12.5 percent of new claims filed in 2007 start before the individual turned 70,” Slome adds. “As the adage goes, a failure to plan is a plan for failure.”

2008 National Long-Term Care Insurance Price Index

A national study of average policy prices providing specified benefits.

Age 55 – $709-per-year ($100 Daily Benefit x 3 Year BP, individual qualifies for preferred health and spousal discounts

Age 55 – $1,064-per-year ($150 Daily Benefit x 3 Year BP, individual qualifies for preferred health and spousal discounts

Age 65 – $1,342-per-year ($100 Daily Benefit x 3 Year BP, individual qualifies for standard health and spousal discounts

Age 65 – $2,998-per-year ($150 Daily Benefit x 3 Year BP, individual is single (standard health)

Age 65 – $4,729-per-year ($240 Daily Benefit x 3 Year BP, individual is single (standard health)

Rates compiled by LTCI Partners LLC, Chicago, IL. Based on 3-year plan, 100% home care, 5% compound growth of benerfits.

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