The Finance of Longevity

2019 Long-Term Care Insurance Price Index Released

While costs increases slightly over 2018, many insurers had no increase

The American Association for Long-Term Care Insurance released initial data from its annual pricing study that has tracked costs data for over two decades. Visit here.

A couple in their mid-50s purchasing new long-term care insurance coverage can expect to pay just over $3,000 for a potential combined benefit of over $770,000 in coverage should they begin needing care at age 85.

According to the just-released 2019 Long-Term Care Insurance Price Index prices for coverage have increased slightly compared to the prior year. The American Association for Long-Term Care Insurance released initial data from its annual pricing study that has tracked costs data for over two decades.

2019 Price Index Long-Term Care Insurance

“In general costs increased slightly compared to our 2018 analysis, but for many insurers there was no increase compared to the prior year,” reports Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI).

According to the Association’s 2019 Price Index, the average annual premium for a 55-year-old couple was $3,050. For a single male, age 55, the average cost reported is $2,050. For a single female the average cost is $2,700. “Married couples often benefit from a significant spousal discount,” Slome explained. Married couples or older adults living together purchase he majority of long-term care insurance policies the Association director notes.

Costs For Virtually Identical Coverage Vary More Significantly Than Prior Years

The spread between the lowest and highest cost for virtually identical coverage was as high as 243 percent according to AALTCI’s 2019 Price Index analysis for 55 year olds. “This is the largest spread I can recall in recent years,” Slome notes. “It’s rare to see one policy costing more than twice another policy when both are large insurers but each company gets to set their own pricing and each has their own target market,” he adds.

For the first time, the Association’s Price Index included some planning and savings strategies. “There are smart ways to protect yourself and save money that agents may fail to suggest or consumer fail to take advantage of,” Slome noted. For example, Slome recommends married couples look into the shared care option where one spouse can use the benefit pool of the other. “Or, consider a two (2) percent inflation growth option instead of the three (3) percent which can save nearly 20 percent yearly,” he adds. These features are not offered by all insurers the Association points out making comparison shopping vital.

The Association’s website offers consumers free access to read informational guides on long-term care planning. To obtain long term care insurance costs from a professional with expertise specifically in long term care insurance products offered by multiple leading companies call the national organization at (818) 597-3227 or visit the Association’s website at www.aaltci.org.

2019 NATIONAL LONG-TERM CARE INSURANCE PRICE INDEX

May be reported with credit to American Association for Long-Term Care Insurance, www.aaltci.org
Price analysis of leading long-term care insurers. Conducted January 2019. Rates vary by state and subject to change.

One of the main objections to buying long-term care insurance is “PRICE”.
Therefore (for the first time) we are offering two options for WAYS TO SAVE. Because the vast majority (over 65%) of long-term care insurance policies:

are purchased by COUPLES … we are including SMARTER PLANNING & SAVINGS TECHNIQUES SPECIFICALLY FOR COUPLES.

In addition – we have seen a larger price spread than prior years – difference between the lowest and highest priced comparable policies.

NO one company ALWAYS WAS THE LOWEST PRICE for categories surveyed. NO one company was ALWAYS THE HIGHEST PRICE.

For that reason, we have also indicated the PERCENTAGE DIFFERENCE (comparing lowest to highest).
We believe it always has been important for consumers to COMPARE. It might be more important today than ever.
For additional information or other options and pricing call Jesse Slome, AALTCI Director, at 818-597-3227. Email: [email protected]

SINGLE MALE AGE 55 (3 Year Plan of Coverage) 2019 Average Annual Premium: $2,050
Initial Pool of Benefits = $164,000 Growing 3% Compounded annually 2018 Annual Premium: $1,870
Value of Benefits at Age 80 = $333,000
Value of Benefits at Age 85 = $386,500
Percentage Difference between Lowest Priced and Highest Priced on survey: 123%

SINGLE FEMALE AGE 55 (3 Year Plan of Coverage) 2019 Average Annual Premium: $2,700
Initial Pool of Benefits = $164,000 Growing 3% Compounded annually 2018 Annual Premium: $2,965
Value of Benefits at Age 80 = $333,000
Value of Benefits at Age 85 = $386,500
Percentage Difference between Lowest Priced and Highest Priced on survey: 105%

COUPLE – BOTH AGE 55 (Each: 3 Years Growing at 3% Annually) 2019 Annual Premium: $3,050 COMBINED
Initial Pool of Benefits = $164,250 FOR EACH SPOUSE Combined cost for BOTH – Includes Marital Discount
Value of Benefits at Age 80 = $333,000 for each
Value of Benefits at Age 85 = $386,500 for each
Percentage Difference between Lowest Priced and Highest Priced on survey: 243%

WAYS TO SAVE TECHNIQUE #1
COUPLE – BOTH AGE 55 (Each: 3 Years Grow at 2% Annually) 2019 Annual Premium: $2,465 COMBINED
Initial Pool of Benefits = $164,250 FOR EACH SPOUSE Combined cost for BOTH – Includes Marital Discount
Value of Benefits at Age 80 = $238,300 for each
Value of Benefits at Age 85 = $256,735 for each

BETTER PLANNING STRATEGY: Each Selects 2 Years Coverage + Adds Shared Care Option w/ 3% Annual Growth of Benefits:

COUPLE – BOTH AGE 55 2019 Annual Premium: $2,810 COMBINED

  • Initial Pool of Benefits = $108,000 FOR EACH SPOUSE Combined cost for BOTH – w/ Marital Discount + Shared Option
  • Value of Benefits at Age 80 = $226,128 for each + access to the other’s benefit pool
  • Value of Benefits at Age 85 = $262,144 for each + access to the other’s benefit pool

Shared care is sharing of benefits in 2 separate policies. One spouse can use the benefit pool of the other when his/her own benefits are exhausted. In most states, each insured is guaranteed a minimum benefit of at least 50% of his/her originally purchased coverage maximum.

* Shared Care options can vary … NOT available from all insurance companies and on all policies.

BETTER PLANNING + SAVINGS STRATEGY: Each 2 Years Coverage + Adds Shared Care Option w/ 2% Annual Growth

COUPLE – BOTH AGE 55 2019 Annual Premium: $2,500 COMBINED *

  • Initial Pool of Benefits = $108,000 FOR EACH SPOUSE Combined cost for BOTH – w/ Marital Discount + Shared Option
  • Value of Benefits at Age 80 = $156,700 for each + access to the other’s benefit pool
  • Value of Benefits at Age 85 = $168,812 for each + access to the other’s benefit pool

For the basic Annual Premium Averages we compared the leading selling LTCi policies (2018 sales). Where large discrepancies were found (example of 100% price difference) the outliers (example the highest priced policy) were NOT included when computing averages.

$164,000 = 3 year benefit x initial benefit of $150/per-day with 90-day Elimination Period with the 3% Compound Annual Growth Option

Click to see the full 2019 Price Index for Age 55