A new study by Boston College's Center for Retirement Research indicates that purchasing long-term care insurance makes finan...Read more
Study Finds LTC Insurance Market Growing 18 Percent a Year
- August 19th, 2004
The number of individuals purchasing long-term care insurance has grown significantly in recent years, according to a survey by America's Health Insurance Plans, a health insurance industry group. The survey found that in 2002, 900,000 new long-term care insurance policies were sold. This is the largest number of policies sold in a single year since 1987, when AHIP first began analyzing the market. With this surge in sales, there have been 9.16 million policies sold since long-term care insurance first came on the market. The market grew an average of 18 percent each year between 1987 and 2002. From 1987 to 2002, half of the individual policies were sold in only 10 states: California, Florida, Illinois, Iowa, Minnesota, New York, Ohio, Pennsylvania, Texas, and Washington.
As of December 31, 2002, approximately 80 percent of all long-term care insurance policies were sold through the individual market. But 2002 was a good year for employer-sponsored plans as well. More than 280,000 new long-term care insurance policyholders, representing almost one-third of all policies sold in 2002, purchased their coverage though their employer. A significant portion of this growth can be attributed to the launching of the Federal Long-Term Care Insurance Program. This program made long-term care insurance available to federal government employees and annuitants and their qualified dependents and relatives. By the end of 2002, more than 5,600 employers were offering a long-term care insurance plan to their employees, retirees, or both.
The AHIP study also found significantly lower than expected rate of policyholders letting their policies lapse. AHIP estimates that roughly 7 in 10 of all individual policies sold remain in force.
To read or download the survey in PDF format, go to: http://www.ahip.org/content/fileviewer.aspx?docid=522&link=1 (If you do not have the free PDF reader installed on your computer, download it here.)
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