Purchasers of true group long term care insurance tended to be slightly older in 2009 and an increasing number selected less costly policy features according to the American Association for Long-Term Care Insurance (AALTCI) annual study of group (employer sponsored) long term care insurance. The organization's research was based on an analysis of nearly 66,000 new purchasers.
Costs for health insurance and other employee benefit programs increased dramatically last year, so it's not surprising that employees were older and more cost-conscious when it came to long-term care coverage. According to the annual study, over a third (37.2 percent) of new group buyers were age 55 or older, compared to 28 percent for the prior year (2008). Younger employees likely decided they could postpone the decision.
Nearly half (45.4 percent) of new enrollees selected daily benefit levels of $149 or less, about an 8 percent increase compared to the prior year. While there was an increase among those selecting less costly options, there was a slight increase in those selecting more costly plans offering daily benefits of $200 or more. In addition, there was a slight increase in the number of new enrollees selecting longer benefit periods, which are more costly.
According to the Association study, the most common benefit period selected remains five years. Some 66.1 percent of buyers selected coverage designed to pay benefits for at least five years, up from 61.0 percent the prior year. Unlike individual long term care insurance policies, where nearly half of buyers (64.5 percent) purchased a five percent annual inflation growth option, only 15.4 percent selected this option, with the vast majority (83.6 percent) selecting an option enabling them to increase benefit levels periodically in future years.
The Association study also examined new claims beginning during the year. Some 6.4 percent of new claims were initiated by individuals age 59 or younger. Only 1.8 percent of claims made against individual LTC insurance policies were by individuals aged 59 or fewer years. Nearly half (49 percent) of benefit dollars paid for new group policy claimants were for home care with only 30 percent for nursing home care.
The complete findings of the survey are contained in the 2010 Long-Term Care Insurance Sourcebook published by the American Association for Long-Term Care Insurance. For more information visit the organization's Web site: http://www.aaltci.org/2010sb/
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