The LTC Insurance market has changed over the past 30 years. Products have changed and gone away with buyer’s thoughts, attitudes, income, and assets also experiencing a shift.
In a recent LifePlans study, they conducted market research in 2015-2016 covering 25 years of trends for buyers, non-buyers, and the general population. The following is a brief recap of key points regarding the average Long Term Care Insurance buyer.
- In 2015, the average LTCI buyer was age 60. This remained unchanged over the last decade.
- Compared to the general population age 50 and over, both buyers and non-buyers are most likely to be married, have a college degree, a job, and higher income and assets.
- The major difference between buyers and non-buyers is that non-buyers have somewhat lower assets.
- Long Term Care Insurance sales have shifted toward higher-income individuals. The median income for buyers is $87,500.
- The assets of buyers are also increasing with slightly more than 4 in 5 stating assets in excess of $100,000.
General Opinions and Attitudes About LTCI
- Buyers consider themselves “planners.” They believe it’s important to plan for the future and the possibility of needing long term care services.
- Buyers typically worry less about paying for long term care and view LTC Insurance as adequate coverage. Their positive view of the product has declined slightly in recent years, but 68% view LTCI policies positively.
- Today, non-buyers have a greater understanding of the need for long term care and think the government will likely not pay for it. However, many buyers and non-buyers are still confused around this issue.
- LTC buyers are most likely to think they’ll need nursing home or home care in the future. Non-buyers are somewhat less likely and the general population age 50 and over are least likely.
LTCI Buying Trends
- In 2015, benefit durations dropped to a 4-year low. Today, 20% of policies sold have a 2-year benefit duration, up from 10% a decade ago.
- Individuals buying inflation protection decreased slightly from 3 in 4 to 2 in 3. Approximately half of all buyers have compound inflation.
- The average annual premiums increased 19% between 2010 and 2015 – from $2,283 to $2,727.
- The policy value compared to premiums has declined since 2010. This reflects significant changes in carrier lapse and interest rate assumptions for new policies.
Reasons People Buy Coverage
- Approximately 1 in 3 buyers indicated protecting their assets and estate was their #1 reason to buy coverage.
- 1 in 5 buyers bought coverage to make sure services are affordable.
- 3 in 4 buyers indicated participating in state Partnership Programs as an important reason to buy.
- Nearly 2 out of 3 thought the cost of insurance would increase in the future as the reason to buy now versus waiting.
- 71% of married couples bought coverage with their spouse.
Do you fit the average Long Term Care Insurance buyer? Even if you don’t, speak with an LTC Specialist about long term care planning and shop LTCI rates from the top carriers online to learn if LTCI is right for you.