Employee-sponsored long-term care insurance buyers tend to be younger, select longer coverage and make claims on their policies sooner at younger ages than those who buy individual coverage.
These findings are included in the American Association for Long-Term Care Insurance annual study of long-term care insurance trends, based on research on the habits of 95,000 group buyers and more than 200,000 individual buyers.
About 8.2 million Americans have long-term care insurance protection and about 400,000 new policies or group certificates are issued annually, according to the nonprofit group.
“Individuals continue to purchase protection at younger ages but that is especially true for those buying coverage in the workplace,” said Jesse Slome, the association’s executive director.
Last year, 24% of buyers who purchased coverage through an employer-sponsored plan were between ages 35 and 44. Another 36% were between ages 45 and 54, and 23% were between ages 55 and 64.
“Buyers in the group marketplace tend to be younger than those purchasing coverage on an individual basis,” Slome said. About 5% of individual buyers were between ages 35 and 44; 24% were between ages 45 and 54; and 53% were between ages 55 and 64.
In its first analysis of initial premiums paid by group plans, the study found “a significant spread” between the low and high amounts paid per-employee. For people between ages 45 and 55, the low premium was $430 a year, while the high premium was $985 annually, Slome said. The average for this age band was $690.
The study also looked at claims being paid to those covered by an employer-sponsored long-term care insurance coverage. About 13% of new claims opened during 2008 were for individuals less than age 60. Researchers also found that 11.5% of new group LTC claimants file their claim during the fourth or fifth year of their coverage. The largest open claim under a group plan exceeds $490,000 and the individual has been on coverage for more than nine years.
Younger long-term care insurance buyers get it at work via IFAwebnews.com .
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