New Report Examines What Consumers Really Pay For Long-Term Care Insurance

One fourth (27.8%) of individuals purchasing long-term care insurance during the first half of 2010 who were under age 61 pay less than $1,000 a year according to a new report issued by the American Association for Long-Term Care Insurance (AALTCI).

"The single greatest misconception held by consumers is the actual cost of coverage," explains Jesse Slome, AALTCI's executive director. "Most people perceive the cost is actually quite a bit higher than the real amounts paid by large percentages of those purchasing coverage."

The Association reveals that nearly one-in-five (19.4%) purchasers under age 61 pay between $20 and $30 a week for new policies. Over one-fourth of buyers (28.9%) in this age band pay between $1,500 and $2,500 a year with the remainder paying more. Less than one-tenth of these buyers (6.8%) pay $4,000 or over.

"Studies that report average premium costs regrettably mislead the public into the perception that long-term care insurance is expensive," Slome explains. "Averages include large numbers of older buyers and other factors that result in higher costs. The fact is that many people pay far less than the average amounts released by industry sources."

Costs for long-term care insurance can vary significantly based on the age when one applies, the ability to take advantage of discounts offered to healthier applicants as well as the amount of future benefits desired.

Insurance rates are based on the attained age of the applicant. Older buyers pay more and according to the latest data of real buyers, less than a tenth (9.0%) of buyers between ages 61 and 75 paid $1,000 or less when they applied for new coverage.

According to the Association, the average age for new individual purchasers is now 57. Eight out of 10 (80.5%) of new individual buyers in 2009 were younger than age 65 when applying for long-term care insurance according to AALTCI's annual research of 155,000 new applicants. The pricing data is based on an analysis of over 200,000 purchasers of partnership qualified LTCi policies.

What Real People Pay Yearly

Buyers Under Age 61

Less than $999 27.8%
$1,000 - $1,500 19.4%
$1,500 - $2,500 28.9%
$2,500 - $4,000 17.1%
$4,000 and over 6.8%

Buyers Age 61 - 75

Less than $999 9.0%
$1,000 - $1,500 12.5%
$1,500 - $2,500 34.5%
$2,500 - $4,000 28.4%
$4,000 and over 15.6%

Source: American Association for Long-Term Care Insurance, November 2010, Price Study

Increased Tax Deduction Limits For Long-Term Care Insurance

The Internal Revenue Service (IRS) has announced increased deductibility levels for long-term care insurance policies purchased in 2010. "For the first time, the maximum deductible limit for an individual exceeds $4,000," explains Jesse Slome, Executive Director of the American Association for Long-Term Care Insurance , the national trade organization.

"The federal government and an increasing number of states are sending a clear signal that individuals need to plan for long-term care and tax deductibility and tax credits certainly make long-term care insurance more attractive to millions," Slome adds. "It is a positive sign to see limits for long-term care insurance deductibility increase especially when pension contribution limits for 2010 were not increased."

The end of the year provides a double tax-saving incentive for consumers. There is still time to take advantage of tax deductions in 2009 and also benefit from the increased deductible limits next year.

The 2010 deductible limits under Section 213(d)(10) for eligible long-term care premiums includable in the term ‘medical care’ are as follows:
Age 40 or less: $ 330
More than 40 but not more than 50: $ 620
More than 50 but not more than 60: $1,230
More than 60 but not more than 70: $3,290
More than 70: $4,110

A complete explanation of tax deductible rules for individuals and business owners can be found on the Association's website: Click here for 2010 tax deductible limits.

Leaders From 18 Long Term Care Partnership States To Attend LTC Agent Summit

Executives from 18 states offering long term care Partnership plans will attend the National LTCi Producers Summit. The Summit takes place November 14-16, 2009 at the Westin Hotel in Kansas City and brings together hundreds of producers who market long-term care insurance products.

This year's Summit will combine two conferences - the producer sales and marketing conference organized by the American Association for Long-Term Care Insurance and the conference for state officials organized by the Center For Healthcare Strategies (CHCS).

Over 18 states will be represented each sending three or four executives from the State Medicaid office, the Department of Insurance, the Agency on Aging and State Dept. of Commerce. Summit attendees will have the opportunity to attend special Partnership workshops in addition to the extensive Summit program.

States Sending Executives Include
Arkansas
Colorado
Georgia
Idaho
Illinois
Maryland
Michigan
Minnesota
Missouri
New Jersey
Ohio
Oklahoma
Oregon
Pennsylvania
Wisconsin
South Dakota
Texas
Virginia

Summit registration is $275 ($324 for non-Association members) through September 30th.

Registration includes sessions, meals and receptions. Hotel discounts are currently available.
Complete information and registration forms are available online at http://www.aaltci.org/2009summit or by calling the American Association for Long-Term Care Insurance at (818) 597-3227.

2009 Long-Term Care Insurance Sales Achievement Awards Announced

Winners of the 2009 Long-Term Care Sales Achievement Award were announced today by the American Association for Long-Term Care Insurance, the industry's professional trade organization.

"There are some 40,000 insurance and financial professionals who market long-term care solutions nationally," states the Association's Jesse Slome, executive director. "Each year we recognize those deemed the best in the business." The Association awarded some 650 leading producers based on the sale of individual long-term care insurance. Award recipients are ranked nationally as well as recognized on a state-by-state basis.

For 2009, new categories include multi-life long-term care insurance as well as categories for asset-based life insurance and annuity products that include long-term care benefits. "The nation's top producers placed over $500,000 in individual long-term care insurance premium, a significant achievement," Slome explains. "Leading producers providing protection to employer groups and organizations each wrote LTC insurance for over 800 individuals during a single year."

The complete listing of award winners is published in the 2009 Long-Term Care Insurance Sourcebook, the annual compendium produced by the Association. For additional information, visit the Association's website www.aaltci.org or call (818) 597-3227.

2009's Top-10 Long-Term Care Insurance Producers (Based on individual placed premium in 2008)
#1 Gene Cutler
#2 Sean Deveau
#3 David Jeffrey
#4 Sally Calef
#5 Michael Lehrhaupt
#6 Christopher Aguiar
#7 Alan Stuart
#8 Meredith Pensack
#9 Stephanie St. James
#10 Carl Brockmeyer

2009's Top-10 MultiLife LTC Producers (Based on multilife long-term care insurance placed premium in 2008)
#1 Michael VanGavree
#2 Robert DeLorey
#3 Karen Mellon
#4 Ernest Strobel
#5 Derek Miele
#6 Michael Halligan
#7 Anthony Stratidis
#8 Rachel Faiga
#9 Barry Ellis
#10 Michael Russell

2009's Top-10 Life+LTC (Combo Product) Producers (Based on placed premium for life+ltc protection in 2008)
#1 George Leamon
#2 Wendy McLaughlin
#3 Loriann Artzberger
#4 Patricia Bennett
#5 Ronald Mendelzon
#6 Corwin Freeman, Jr.
#7 Robert Jennings
#8 Elaine Todd
#9 Paul Manginelli
#10 Ed Young

2009's Top-10 Annuity+LTC (Combo Product) Producers (Based on placed premium for annuity+ltc protection in 2008)
#1 Darlis Kirchhofer
#2 Edward Pacelli
#3 Dale Boliba
#4 Steve Jacob
#5 Brad Tisdale
#6 Daniel Heacock
#7 Glenn Nitti
#8 Chuck Bahr
#9 Luana Mobley Corral
#10 Elaine Todd

Reserach Reveals Consumers Purchasing More Affordable Long-Term care Insurance

Some 400,000 individuals purchased long-term care insurance protection in 2008 according to a just-released report. The overwhelming majority (84%) of individual buyers in 2008 were younger than age 65 and three-fourths (76%) selected a more affordable approach to this protection by opting for coverage for a specific number of years.

The annual study conducted by the American Association for Long-Term Care Insurance, the industry's professional trade organization, analyzed data on 215,000 buyers of individual long-term care insurance protection. According to the organization's research, some 8.2 million Americans now have long-term care insurance protection purchased on an individual basis (typically through an insurance professional) or through a plan offered by their employer.

"Individuals continue to purchase protection at younger ages," explains Jesse Slome, the Association's Executive Director. In 2008, some 53% of individual buyers were between ages 55 and 64; compared to 50% the prior year. Another 24% were between ages 45 and 54 (2008). "The age of buyers keeps dropping as consumers -- especially baby boomers -- understand the cost-saving benefits of locking in good health discounts and ways to make protection more affordable," Slome explains. In 2000, the average age of an individual buying long-term care insurance was 67.

The number of individuals purchasing long-term care insurance protection for a specified number of years also increased according to the Association study. Just over three-fourths (76%) of buyers in 2008 opted for coverage for a claim lasting five years or less; a slight increase over the prior year (71%). "The most expensive long-term care insurance policy is one with an unlimited benefit period (one with no cap on the number of years benefits will be received)," Slome explains. "Consumers are right-sizing their protection taking into account available savings and retirement income. This cost-sharing approach can reduce the cost of protection by 30 percent or more."

Perhaps in recognition of cost-consciousness, consumers were fairly evenly spread in terms of the level of selected daily benefit. Just under one-third (31.5%) opted for a daily benefit between $100 and $149. "In current dollars, that amounts to between $36,500 and $54,385 in a yearly benefit," Slome notes. "But most policies offer an option so benefits keep pace with rising costs and 15 years from now, the value of the (higher) benefit would be $75,800 a year."

The complete findings of the study are published in the 2009 LTCi Sourcebook available from the American Association for Long-Term Care Insurance. For additional information, call the Association's offices at (818) 597-3227 or visit the organization's website: http://www.aaltci.org/.

Summarized Study Data

Age of Buyers (2008)

Under 45 7%
45 to 54 24%
55 to 64 53%
65 and Over 16%

Daily Benefit (2008)
Less than $100 6.5%
$100 to $149 31.5%
$150 to $199 35.0%
$200 and Over 27.0%

Benefit Period (2008)
2 Years 7%
3 Years 30%
5 Years 24%
Unlimited 13%

Premium Paid (2008)
Age Low High Average
35 - 44 $637 $2,830 $1,650
45 - 54 $1008 $6,440 $1,900
55 - 64 $844 $7,400 $2,150
65+ $1,883 N/A $3,350

Additional information can be found in the Association's Consumer Information Center.

Long-Term Care Insurance Producers Summit Planned

The American Association for Long-Term Care Insurance, the national professional organization, announced plans for the eighth National Long-Term Care Insurance Producers Summit.

The national conference which will focus on the marketing and selling of long-term care insurance as well as life insurance and annuity products that now offer long-term care benefits will be held November 15 and 16, 2009 at the Westin Crowne Center Hotel in Kansas City, MO.

The Summit is the premier long-term care insurance industry meeting for insurance and financial professionals who market long-term care solutions to individuals and the employer marketplace.

The Association is extending a special Pre-Early Registration offer--a $130 discount off the general registration fee of $325. In addition, for those who register before February 18th, the Association will provide two $25 credits toward room charges at the Westin in Kansas City. For details on this limited-time offer, contact Jesse Slome, Executive Director of the organization. Click here of call (818) 597-3227.