Local Expert Shares How Individuals Are Saving

An increasing number of area baby boomers are purchasing long-term care insurance according to Greg Seal of C-Hall Corporation. The Denver insurance planning professional noted that some 400,000 individuals purchased long-term care insurance protection last year according to a just-released national study.

The overwhelming majority (84%) of individual buyers in 2008 were younger than age 65 according to the study conducted by the American Association for Long-Term Care Insurance (http://www.aaltci.org/) the national trade organization. Some 8.2 million Americans now have long-term care insurance protection according to the organization.

Individuals are purchasing protection at younger ages, explains Seal. More than half (53%) of individual buyers were between ages 55 and 64; compared to 50% the prior year. Another 24% were between ages 45 and 54. The age of buyers keeps dropping as consumers understand the cost-saving benefits of locking in good health discounts and ways to make protection more affordable, Seal 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), Seal 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, Seal 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.

Greg Seal is a local long-term care insurance professional. For additional information, call 303-671-9777 or E-mail Greg at gseal@c-hall.com.