Research conducted by the American Association for Long-Term Care Insurance (AALTCI), the national trade organization, examined 2008 sales data for over 5,000 new policies.  “Asset-based long-term care insurance protection is becoming an increasingly popular way for individuals to protect against the risk,” explains Jesse Slome, AALTCI’s Executive Director.

Asset-based long-term care policies offer the dual benefit of access to long-term care benefits as well as life insurance protection.  “Many individuals find this coverage attractive because if they don’t use their long-term care protection, their beneficiaries still benefit from the life insurance coverage,” Slome explains.

The average single premium paid for an asset-based LTC policy in 2008 was $70,975, according to the Association study.  This represented a four percent increase compared to 2007 when the average premium was $68,300.   Just under half of policies (49.7%) had a base face amount of between $100,000 and $200,000.  Some 30 percent had a face amount of life insurance protection of between $50,000 and $100,000.   “Policies offer a long-term care insurance protection in multiples of the life insurance benefit,” Slome explains.
Purchasers of asset-based LTC policies were almost equally divided between pre-65 (49%) and 65-or-older (51%).  Just over 10 percent (11.2%) of purchasers were between ages 45 and 54.   Exactly two-thirds of purchasers were women (66%).  “Buyers are older than individuals purchasing traditional long-term care insurance protection,” Slome notes.  According to the Association’s study, some 84 percent of buyers of traditional LTCi protection in 2008 were younger than age-65.
Asset-based long-term care protection and traditional LTC insurance policies share the requirement that applicants health qualify for coverage.  The percentage of accepted applicants declined with age according to the study’s findings.  Some 70.2 percent of submitted policy applications by individuals between 45 and 54 were accepted.  The percentage declined to 60.5 percent for applicants between ages 65 and 74.
“We anticipate the market for asset-based long-term care protection will increase in the years ahead,” predicts Slome.  “Leading insurers such as Genworth Financial and Lincoln Financial Distributors are focused on the growth of this market and policy sales.”

The American Association for Long-Term Care Insurance is the national organization serving insurance and financial professionals who provide long-term care financing solutions.  For additional information visit the organization’s online Producer’s Resource Center at www.aaltci.org.
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Findings:  2009 Asset-Based Long-Term Care Study
conducted by the American Association for Long-Term Care Insurance (June 2009)

2008 Sales By Issue Age
Under 35              0.1 %
35 – 44                          1.2 %
45 – 54                        11.2 %
55 – 64                        36.5 %
65 – 74                        38.2 %
75 or older            12.8 %

2008 Sales By Policyholder Sex

Male                        34 %
Female                        66 %

2008 Sales (Single Premium) By (Base) Face Amount
Less than $25,000              0.0 %
Bet $25,001 – $50,000              5.1 %
Bet. $50,001 – $100,000            30.0 %
Bet. $100,001 – $200,000            49.7 %
Over $200,000            15.2 %

Percentage of Submitted Policies Issued (By Age Band.  Total will not equal 100%)
Age 35 – 44            79.8 %
45 – 54            70.2 %
55 – 64            68.1 %
65 – 74            60.5 %
75 or older            52.7%

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