According to the 2018 Long-Term Care Insurance Price Index, an annual compendium of pricing prepared by the American Association for Long-Term Care Insurance, some costs have actually declined compared to a year earlier.

To see the fuller 2018 Long-Term Care Insurance Price Index – click the link below,
2018 Price Index LTC

“In general costs increased slightly compared to our 2017 analysis, but indeed in some situations though purchasing a new policy could pay slightly less,” reports Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI).    The national trade group released their 2018 Long-Term Care Insurance Price Index.

According to the 2018 LTC Price Index, the average premium for a 60-year-old couple was $3,490 annually.   The Association’s 2017 study reported the average premium was $3,790.  “There are a number of reasons for the change,” Slome shares.  “There are fewer insurers offering traditional long-term care insurance policies currently and some of the higher priced insurers sell so few policies that we excluded them from this years study as they really were not representative of the market conditions.”

A single 55 year old male could expect to pay $1,870 annually for benefits that would grow to be worth $386,500 when the policyholder turned age 85.  Slome noted that the typical individual needs long-term care at older ages, with most claims starting when policyholders are in their 80s.

Women continue to pay more for long-term care insurance than men.  A single 55-year-old female would pay $2,965 annually for the same potential benefit as her male counterpart.  “Women face a far greater risk of needing long-term care,” Slome explains.  According to AALTCI, women account for two thirds of all long-term care insurance benefits paid by insurers.

2018 Costs For Virtually Identical Coverage Continue To Vary

What has not changed according to AALTCI’s 2018 Price Index analysis is the finding that costs for virtually identical policy coverage vary significantly from one insurer to the next.    “Each insurer establishes their own prices and available discounts and the cost for virtually identical coverage can vary,” Slome notes.    “You generally only buy long term care insurance once, so it’s important to do it correctly the first time,” he adds.

The Association’s website offers consumers free access to read informational guides.  To obtain long term care insurance costs from a professional with expertise specifically in long term care insurance products offered by multiple leading companies call the national organization at (818) 597-3227 or visit the Association’s website at www.aaltci.org.

AVAILABLE FOR INTERVIEWS – Contact Jesse Slome at AALTCI  Call 818-597-3227 or Email:  jslome @ aaltci.org

Jesse Slome, long term care insurance expert

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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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A 65-year-old purchasing comparable coverage will pay $1,292 (married) or $1,923 (single) according to the 2007 Long-Term Care Insurance Price Index published by the American Association for Long-Term Care Insurance.  Costs are roughly the same as the prior year.

The annual index measures current costs for top-selling long-term care insurance policies that offer the ability to receive care either at home or in a skilled care facility.  “During the past year, a number of new policies have grown in popularity, some of which provide more affordable coverage especially for younger individuals who qualify for discounts offered to those in good health as well as individuals who are married or residing with a partner,” explains Jesse Slome, Executive Director of the national trade organization that conducted the research.

“Consumers mistakenly believe long-term care insurance protection is costly and nothing is farther from the truth,” Slome explains.  “There are discounts available today to those in good health, for non-smokers, married couples or even domestic partners,” Slome notes.  “You can cut costs paying annually versus monthly, roughly nine percent, and by another eight percent simply by being accepted for coverage before your next birthday.”

The Association’s study compares costs for plans that provide benefits for 3-years, which increasingly is accepted by industry experts as a basic level of protection for many.  “With more people in their 50s purchasing protection, growth options that increase the value of benefits available to keep pace with rising costs of care is important,” Slome advises.  The study priced plans that provide $110,000 or $172,000 in current protection ($100/day and $150/day for 3 years) for someone age 55.   “Benefits increase at five percent compounded annually so the actual benefit by the time an individual reaches 80 would grow to $390,000 or $585,000 respectively,” explains Slome.

Study Demonstrates Savings Benefits Of Planning Early

“I’m often asked the best time to buy long-term care insurance and the honest answer is the day before a change in your health,” Slome says.  “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.”

“Our studies show that more applicants in their 50s qualify for preferred health discounts than those who wait until their 60s to apply (44 % versus 32% ²),” Slome notes.  Using the Association’s example, an individual age 55 considering a policy that currently provides $150-per-day benefit might expect to pay $1,027 (assumes they qualify for spousal and preferred health discounts).  If they wait 10 years, until age 65, to buy the same $150-per-day coverage but no longer qualified for the good health savings, they would pay $1,939 yearly.  “That assumes insurance prices don’t increase over the decade they waited,” Slome adds, “and most likely they will.”

“But, 10 years from now you will actually need to buy a higher benefit amount to keep pace with inflation,” Slome states.  In 10 years, at five percent annual growth, one will need to buy a  $240 daily to be equal with today’s $150-per-day benefit.  The Association’s 2007 Price Index reveals the average cost for $240-per-day benefit will range from $3272 to $4,823.  “It’s never an economic advantage to wait,” Slome says.  “And, more important, a change in your health could make it impossible to health-qualify no matter how much you are willing to pay.”

“People, especially in their 50s, fear they’ll make the mistake of paying for something they’ll never use,” Slome acknowledges.  “Would you rather make the mistake of not having some basic level of protection considering the enormous risk to your retirement savings and family?”

# # #

Compound Inflation Growth Table
Impact of 5% Annual Increases

Age 55   $100   $150
Age 65   $163   $244
Age 75   $265   $398
Age 80   $339   $508

¹ Rate based on $100-per-day (current) benefit; 3-year plan; 100% home and skilled care; 5% compound growth of benefits.  Individual qualifies for preferred health and spousal discounts.

² Source:  American Association for Long-Term Care Insurance Study; Feb. 2006

2007 Premium survey rates provided by LTCI Partners, LLC, Chicago, IL.

2007 National Long-Term Care Insurance Price Index
Source:  American Association for Long-Term Care Insurance
Published June 1, 2007

Average price for a comprehensive long-term care insurance policy (100% home care benefit + skilled care coverage), 90-Day Elimination Period with Compound Inflation Protection Option (benefit increases 5% compounded annually)

Age 55 $100 Maximum Daily Benefit x 3 Year Benefit Period
Cost:   $ 665-per-year Individual Qualifies for Preferred Health and Spousal/Partner Discounts

Age 55 $100 Maximum Daily Benefit x 3 Year Benefit Period
Cost:   $1,075-per-year     Individual Qualifies for Preferred Health

Age 55 $150 Maximum Daily Benefit x 3 Year Benefit Period
Cost:   $1,027-per-year     Individual Qualifies for Preferred Health and Spousal Discounts

Age 55 $150 Maximum Daily Benefit x 3 Year Benefit Period
Cost:   $1,524-per-year     Individual Qualifies for Preferred Health

Age 65 $100 Maximum Daily Benefit x 3 Year Benefit Period
Cost:   $1,292-per-year Individual Qualifies for Spousal/Partner Discounts  (Standard health)

Age 65 $100 Maximum Daily Benefit x 3 Year Benefit Period
Cost:   $1,923-per-year     Individual is single (standard health)

Age 65 $150 Maximum Daily Benefit x 3 Year Benefit Period
Cost:   $1,939-per-year     Individual Qualifies for Spousal Discounts  (Standard health)

Age 65 $150 Maximum Daily Benefit x 3 Year Benefit Period
Cost:   $2,885-per-year     Individual is single (standard health)

Age 65 $240 Maximum Daily Benefit x 3 Year Benefit Period
Cost:   $3,272-per-year Individual Qualifies for Spousal/Partner Discounts  (Standard health)

Age 65 $240 Maximum Daily Benefit x 3 Year Benefit Period
Cost:   $4,823-per-year     Individual is single (standard health)

The American Association for Long-Term Care Insurance is the professional organization serving insurance and financial professionals nationwide.   The Association’s Website maintains a simple online “look-up” listing long-term care insurance professionals in each Zip Code.

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