SOURCE: American Association for Long-Term Care Insurance

American Association for Long-Term Care Insurance

February 05, 2016 10:18 ET

Average Costs for Long Term Care Insurance Policies Decline

2016 Long Term Care Insurance Price Index Reports Decreased Costs; Good News for Consumers Reports American Association for Long-Term Care Insurance

LOS ANGELES, CA--(Marketwired - February 05, 2016) - A couple in their 60s purchasing new long term care insurance coverage can expect to pay almost 10 percent less in 2016 compared to a year ago according to the annual industry analysis of prices.

"A couple where both spouses are age 60 can now pay under $100 a month each for a good plan of protection that pays benefits for care at home or in a skilled nursing home," reports Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI). The national trade group released their 2016 Long-Term Care Insurance Price Index.

Costs for a 55-year-old purchasing $121,000 of coverage when they turn 85 costs $960-yearly according to AALTCI. "We advocate a 'Good-Better-Best' approach to long-term care planning because for many people it's more than sufficient coverage and certainly it's more affordable," Slome explains. Good coverage he shares provides benefits for up to 360 days. About half (49%) of current long-term care insurance claims end before one year according to AALTCI data.

"Couples and single men are paying less today," Slome reports. Most policies (62%) are purchased by couples or partners where both individuals obtain protection. Costs for single women purchasing long-term care insurance have increased about seven percent compared to last year according to the analysis.

The national long-term care insurance expert shares there are numerous misperceptions about long-term care insurance. "People perceive costs are higher than they actually are," Slome says. "If you buy coverage with all the bells and whistles, one that pays every potential dollar of care, the cost will be high. Too many agents push a 'one size fits all approach' rather than giving consumers options with varying levels of costs."

Consumers also have the misconception that premiums for long-term care insurance increase yearly, Slome shares. "Some older policies faced rate increases but it is highly unlikely newer policies purchased today will be similarly affected," Slome notes. "Older policies offered benefits not available today such as unlimited benefits or they increased policyholder benefits by five percent yearly," he adds. "When consumers are concerned, we gladly share independent studies by actuarial experts that explain why today's policies do not face the same risk of future rate increases."

2016 Costs For Virtually Identical Coverage Vary By 20-To-94 Percent

According to AALTCI's 2016 Price Index, costs for virtually identical policy coverage vary significantly from one insurer to the next. "Each insurer sets their own rates and available discounts and the price for virtually identical coverage can vary," Slome states. The AALTCI analysis found rates varied by as much as 94 percent. "You generally only buy long term care insurance once, so it's important to do it correctly the first time," he adds.

Slome explains that a long-term care insurance specialist will typically be appointed to compare policies from multiple insurance companies that offer both short-term care as well as traditional LTC policies. "Sales of short-term care insurance are increasing as more consumers find them an affordable and suitable option," Slome notes. Short-term care insurance policies generally are defined as policies that provide benefits for up to 360 days. A growing number of leading insurers are now offering these policies.

Experts suggest three questions to determine an insurance professional's expertise. How many years have you focused on long term care planning? How many long term care insurance policies have you sold? How many long term care insurers are you appointed with? 

Free access to read informational guides is available on the Association's website. To obtain long term care insurance costs connect with a professional by calling the national organization at (818) 597-3227 or visit the Association's website at www.aaltci.org.

To learn more about short term care insurance options, visit the National Advisory Center for Short Term Care Information, at www.shorttermcareinsurance.org

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