AALTCI: Many Young LTC Buyers Pay Low Rates

By Trevor Thomas

November 30, 2010 at 07:00 PM

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About 28% of new long term care (LTC) insurance buyers under age 61 will start out paying less than $1,000 a year for coverage.

The American Association for Long Term Care Insurance (AALTCI), Westlake Village, Calif., has published that figure in a study based on an analysis of about 200,000 U.S. individual

Individual LTC Policy Sales: Price Ranges

Buyers Under 61
Price of Policy	Share of Policies Bought
Less than $999	28%
$1,000 – $1,500	19%
$1,500 – $2,500	29%
$2,500 – $4,000	17%
$4,000 and over	7%

Buyers 61-75
Price of Policy	Share of Policies Bought
Less than $999 9%	9%
$1,000 – $1,500	13%
$1,500 – $2,500	35%
$2,500 – $4,000	28%
$4,000 and over	16%
Source: American Association for Long Term Care Insurance, Westlake Village, Calif.

LTC insurance policy sales completed in the first half of 2010.

AALTCI found that 19% of buyers in the under-61 age groups paid $20 to $30 per week for their policies, and that 29% in that age band paid $1,500 to $2,500 per year. At the high end, 7% of buyers paid $4,000 or more per year.

AALTCI Executive Director Jesse Slome says the study shows the cost of LTC coverage is much less than many people think.

Most studies of LTC insurance rates "include large numbers of older buyers and other factors that result in higher costs," Slome says. "The fact is that many people pay far less than the average amounts reported."

The average age of new individual LTC insurance purchasers is 57, and about 81% of new individual buyers are younger than 65, AALTCI says.

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