Long-term care (LTC) insurance pays for services to help individuals who are unable to perform certain activities of daily living without assistance or who require supervision due to a cognitive impairment such as Alzheimer’s disease. According to the U.S. Department of Health and Human Services, about 70 percent of individuals over age 65 will require at least some type of LTC services. There were 46.2 million people age 65 and older in 2014, accounting for 14.5 percent of the U.S. population, or about one in every seven Americans, according to the U.S. Census Bureau. By 2030 the Census Bureau projects there will be about 74.1 million older people and about 88.0 million in 2050.
About 4.8 million people were covered by LTC insurance in 2014, according to LIMRA. In 2015 the average premium for a 55-year-old male ranged from $1,066 to $2,075, according to the 2015-2016 Long-Term Care Sourcebook published by the American Association for Long-Term Care Insurance. For a 55-year-old woman, the premium ranged from $1,400 to $2,411. Based on 2014 buyers, 38.6 percent of new LTC insurance policies were purchased by individuals under the age of 55, and 91.9 percent of buyers were under the age of 65, according to the study. The age of new buyers has been dropping slowly. A decade or so ago the age of the average buyer was between 66 and 67 years old, whereas now the average application age for coverage is 56 years old.
INDIVIDUAL LONG-TERM CARE (LTC) INSURANCE, 2014 (1)
(1) Based on LIMRA’s Individual LTC Sales survey, representing more than 95 percent of the individual LTC market. Source: LIMRA. |
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THE AGING U.S. POPULATION
The dependency ratio, or the number of people 65 and older to every 100 people of traditional working ages, is projected to climb rapidly from 22 in 2010 to 35 in 2030, according to the U.S. Census. The expected steep rise in the ratio over the next two decades reflects the projected proportion of people 65 and older climbing from 13 percent to 19 percent of the total population over the period, with the percentage in the 20 to 64 age range falling from 60 percent to 55 percent.
PERCENT OF HOUSEHOLDS WITH ONE OR MORE PEOPLE AGE 65 YEARS OLD AND OVER, 2011
(1) States with the same percentages receive the same rank. Source: U.S. Department of Commerce, Census Bureau; American Community Survey. |
Source: Insurance Information Institute, “Long-Term Care Insurance” http://www.iii.org website. Accessed November 30, 2015. http://www.iii.org/fact-statistic/long-term-care-insurance
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