New Long Term Care Insurance Policies: The Specs
Have you ever wondered about what the policies look like for all the people who bought traditional, standalone long term care insurance (LTCI) in 2017— the latest year for which there are statistics available? That’s what I’m sharing with you this month, together with all the specifications on the policies.
When I previously wrote about the article I read in Broker World, I mentioned it encompassed 12 dense pages and included 28 tables of statistics! These statistics are from the 2018 Milliman LTCI Survey, printed in Broker World magazine.
Like any statistics surrounding a highly-customizable product, the numbers, while providing insight into large numbers of buyers and average specs, may also be irrelevant for an individual purchaser. One reason the average numbers can be particularly dangerous in regards to LTCI is the high degree of variation in cost for facility-based care. One area of the U.S. may literally cost 75% less than another for the same level of care. (Mind boggling, I know.) Meanwhile, home-based care is much less susceptible to price differences. For information on the cost of care, check out my recent article, “The Expense of It: What Long Term Care Costs.” As for the straight LTCI statistics, here is some insightful policy information:
Policy Benefit Period
1-2 yrs.: 13.8%
3 yrs.: 49.0%
4 yrs.: 10.0%
5 yrs.: 10.9%
6 yrs. 14.0%
7-10 yrs.: 2.3%
Maximum Monthly Benefit at Issue
Less than $3,000: 14.0%
$3,000 – 4,499: 31.1%
$4,500 – 5,999: 26.6%
$6,000 – 7,499: 18.1%
Average Premium Per Insured
Across US: $2,596
Lowest is in Kansas: $2,278
Highest is in New York: $3,942
Other Statistics You May Find Interesting:
99% of policies were sold by agents or brokers
35.4% of policies were issued in 29 days or less
25.6% of policies took between 30-44 days in underwriting
39.1% of policies took over 45 days from submission to underwriting decision.
Alright, now you’ve looked “under the hood” of new long term care insurance policies— but the question remains, what will your policy look like?