- If an individual set aside and invested the value of the average LTC insurance premium for 22 years, she would accumulate only enough to pay for six months of care. By putting the same amount into premiums, she could own a policy covering more than three years of care.1
- Compared to those without LTC insurance, insureds reduce their out-of-pocket LTC costs by between $3,000 and $5,000 a month (depending on the service setting).1
- Individuals with LTC insurance receive on average 35% more hours of care than those without, and their care is also somewhat more likely to address their needs than care received by the uninsured.1
- 4 million Americans are living with Alzheimer’s disease.2
- The financial impact from a long term care event is massive: 88% of care-givers said their household income was reduced an average of 34%.3
- In 1965 when Medicare became a law, Part A (hospital expenses) was projected to cost $9.1 billion. By 1990, the actual cost was $67 billion.4
- 70% of seniors will need long term service and support because of physical or cognitive impairment. The average length of time a senior adult will need assistance with activities of daily living is 3 years.5
- From 2011 to 2029, baby boomers (those born between 1946 and 1964) will turn 65. During this time period, 10,000 people will turn 65 every day.5
- People who need long term care will more than double by the year 2050 (from 12 million in 2010 to 27 million in 2050).5
- 48% of people age 40 or older say they will need long term care as they age, but only 35% say they’ve set aside funds to pay for their long term care needs.5
- American women live longer than men (81 years on average versus 76 for men), according to data released in 2013 by the Institute for Health Metrics and Evaluation.2This longevity translates to potentially more unhealthy years on average for women — 11 years compared to 9.7 for men.
- 70% of people over age 65 will require some care at some point in their lives.6
- $750,000 is the projected average cost for 3 years of long-term care 30 years from now.7
- “Long-term care is a blind spot in many clients’ portfolios. In fact, 85% of people don’t have a plan for covering the costs of long-term care.”8
- Using a conservative definition, 62.1% of all bankruptcies in 2007 were caused by the cost of medical care. Most medical debtors were well educated, home-owners, in white-collar occupations and 3/4 were covered by health insurance.9
- In 2030, 54% of the 78 million baby boomers will be women, according to the National Association of Baby Boomers.
- A healthy female, age 65, has a 67% chance she will live to age 90 and a 38% chance she will live to age 95.10
- Approximately 72% of baby boomers whose parents had long-term care insurance said it was a “good value” for reasons such as increasing quality of life, preserving their parents’ nest egg, and lessening the family’s financial contribution to care. Of those baby boomers whose parents did not have coverage, 71% said that long term care coverage would have benefited their families.11
- 47% of early baby boomers (now 56 to 62 and nearing retirement age) are likely to exhaust their retirement savings, according to the Employee Benefit Research Institute.
- A recent AALTCI survey of 151,500 people enrolled in group LTC plans found:
- 36% chose daily benefit levels of $100 – $149
- 34.4% chose daily benefit levels of $150-$199
- 22.5% chose benefit levels of $200 or more per day
- In 2011:12
- 5% of LTCI policies were purchased by people age 55 to 64
- 8% had a three-year benefit period
- 0% had daily benefit amounts between $100 and $149
- 0% had an elimination period of 90 days
- 8% had 5% compound inflation protection
- $92,378 is the average annual cost for a private room at a nursing home according to the 2016 cost of care study by Genworth Financial.
- The average annual cost for LTCI is equal to half the amount of one month in a nursing home or one month of professional in-home care.
- The top four reasons individuals purchase of long term care insurance:13
- To protect assets
- For financial security/peace of mind
- To cover the cost of LTC services in the future
- They don’t want to be a financial burden on family
- Employer provided long term care insurance plan information:14
- 12,000: Approximate number of employers offering long-term care insurance
- 2 million: Approximate number of employees covered by employer-sponsored long-term care insurance plans
- Research estimates about 15% of Americans over age 70 suffer from dementia, a condition that includes Alzheimer’s disease. The number of seniors with Alzheimer’s disease is projected to triple by 2050, afflicting as many as 14 million in the United States.15
1America’s Health Insurance Plans. “The Benefits of Long-Term Care Insurance and What They Mean for Long-Term Care Financing”. November 2014.
3 Beyond Dollars: The True Impact of Long Term Caring. Genworth Financial. 9/30/2010.
4 Talking Points, One-a-Day, Compiled by Mark Zinder
5 Visualizing Health Policy, Kaiser Family Foundation. August 28, 2013. Volume 310, Number 8.
6 U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, www.longtermcare.gov, September 2008
7 Based on John Hancock’s Cost of Care Survey, conducted by LifePlans, Inc., 2011 and an assumed rate of inflation of 4.1% based on the average annual increase in the Consumer Price Index for All-Urban Consumers (CPI-U), obtained from the Bureau of Labor Statistics of the U.S. Department of Labor, for the 50-year period ending 12/31/10
8 John Hancock’s online survey conducted September 2011 by Matthew Greenwald & Associates, Inc.
9 The America Journal of Medicine, Clinical Research Study 2009
10 Genworth Financial, A2000 Basic ANB Mortality table with Scale AA mortality improvement.
11 Mathew Greenwald & Associates, Market Research Survey, 2010
12 American Association for Long-Term Care Insurance, 2012 LTCi Sourcebook.
13 Mutual of Omaha’s 2013 Consumer Study: Understanding Long-Term Care Buyers
14 American Association for Long-Term Care Insurance, 2012 LTCi Sourcebook.
15“Improving Dementia Long-Term Care: A Policy Blueprint,” http://www.rand.org, Provided by RAND Corporation